6 Strategies for Managing the Expansion of Your Hyperlocal Business

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Young green plantWhen the customers start signing on and the cash starts flowing, a hyperlocal company can go from hand-to-mouth to expansion mode. But managing that first big growth spurt isn’t always easy. As the hyperlocal industry continues to flourish, more and more vendors are experiencing growing pains. Oftentimes, expansion means leaving the comfort of a home office or a shared workspace and entering the real world — with larger offices, more employees, and more headaches from a business management perspective.

Here are six strategies for managing an expansion as an early-stage hyperlocal, from executives who’ve made their way through the trenches and lived to tell about it.

1. Lean on your inner circle. “For me, it was about getting advice from those who had already gone down this road. They helped me identify where the bumps in the road could be and how to avoid them. For instance, one of the best pieces of advice I ever got was how important it is to attract the right kind of talent and identify the best role for each person to help us continue to expand. And luckily, here in New York City, we’re in a great place to attract some incredibly talented folks.” (Wiley Cerilli, SinglePlatform from Constant Contact)

2. Have co-founders serve as ambassadors. “You can’t be everywhere at once, so founding team members need to act as ambassadors to new staff and partners, so that the ‘vision’ can stay intact as you grow. [Expansion should happen] when you have a clear vision that the whole company has bought in to and when you have the right team in place to manage your growth. This means hiring ahead to plan for the next level.” (Jason Richelson, ShopKeep POS)

3. Prioritize resources using “reverse lifeboat” exercises. “We periodically went through what we called a ‘reverse lifeboat’ exercise. We had all previously worked at startups that did ‘lifeboat’ exercises to determine which resources to keep in the event of a downturn in business or loss of funding. Our reverse lifeboat was intended to prioritize what resources we would add once our revenues gave us the latitude to increase our spend.” (Bill Lange, Full Slate)

4. Expand at the right time. “Expansion is the ultimate tightrope walk: expand too early and you may not have the resources to support your expansion; expand too late and you may fall behind in any number of areas. Either scenario can be the death knell for a nascent startup. When we began to expand at SinglePlatform, it was because we were confident in our forecasts for customer growth and the development of our partner network, both key contributors to our success. We knew that to keep up with what was coming in the door, we had to begin to grow our headcount. And as our headcount grew, we were able to do exponentially more.” (Wiley Cerilli, SinglePlatform from Constant Contact)

5. Let revenue dictate spending. “Full Slate — now part of Demandforce — was boot-strapped from the start. We therefore were forced to employ some of the exact same techniques that many SMBs face when trying to grow their own businesses. Our revenues dictated when we increased spend — whether hiring staff, buying more keywords, adding more server capacity, or raising salaries.” (Bill Lange, Full Slate)

6. Use baseline metrics as a guide. “Make sure you have good baseline metrics in place so you know what you’re tracking to, how you will measure success and how you will measure ROI. It’s also useful to have a ‘Plan B’ in the back of your mind and a plan to manage your culture. It’s easy to lose sight of this and let it slip as you go through rapid growth, but in the long run your company culture and values are what will sustain you and keep the business true to your original vision. It’s a frequently undervalued but crucial investment.” (Jason Richelson, ShopKeep POS)

Interviews have been edited for length and clarity.

Stephanie Miles is an associate editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.