By Adam Herbert, CEO and co-founder, Go Live Data
“Revenue alone tells you little about profitability. A large contract can look impressive, but the cost of servicing it may leave very little margin, whereas a smaller customer needing less intervention may actually be more valuable”
Growth of a business can often make it look successful long before it becomes financially secure. More staff, bigger premises and a busier sales team are normally visible signs of progress. But discovering if the company is actually making money, keeping customers and consistently delivering means looking closer.
For founders moving from start-up to scale-up, that distinction is key. Decisions become more expensive, commitments last longer and mistakes affect more people. The approach that helped you win your first customers can become difficult to sustain when every decision still lands on your desk as it did at the start.
I co-founded Go Live Data with Tim Langley in 2020. We saw an opportunity to improve how businesses use corporate data and approach potential customers. Too much outbound marketing relied on volume, with little consideration for accuracy, timing or the person receiving it. Building a business around addressing those problems gave us a clear purpose. Growing it requires the same discipline.
Understand what deserves investment
Before discussing expansion, founders need to understand which parts of their business are working commercially. That means knowing which customers are profitable, why they stay and what it costs to sustain them as clients.
Revenue alone tells you little about profitability. A large contract can look impressive, but the cost of servicing it may leave very little margin. A smaller customer buying regularly, paying promptly and requiring less intervention may actually be more valuable than the headline figures suggest.
At Go Live Data, understanding the audience is fundamental to what we do. The same principle applies internally. If you cannot explain where your best business comes from, increasing your marketing budget or recruiting more salespeople becomes an expensive experiment. There should be evidence that demand can be repeated and delivered profitably. Otherwise, expansion simply increases the cost of finding out that the model needs work.
Choose finance around the business
If you go down the funding route, it should follow a clear commercial requirement. Founders should be specific about what the money will achieve, when it will produce a return and what happens if progress takes longer than expected.
Reinvesting profits can allow a business to develop while retaining control, although it may limit the pace.
Borrowing creates repayment obligations that need to remain manageable through quieter trading periods. Equity investment brings capital and potentially useful expertise, alongside shared ownership and expectations about performance and an eventual exit.
Each route can make sense. The difficulty comes when the funding arrangement pushes a company towards a pace or direction that its operations may be unable to support.
I would want a founder to explain exactly what receiving additional capital changes.
Does it fund a tested new product, remove a delivery constraint or open a new market where demand has been established? While “We want to grow” is ambitious, it leaves too much still unanswered.
Cash flow also needs proper attention. Forecasts should allow for delays, rather than assuming perfect execution. Recruitment and development costs arrive before the income they are intended to generate. An encouraging pipeline will not cover the payroll if customers have yet to sign contracts.
Use data to make better decisions
Businesses can collect plenty of information and still struggle to make useful decisions. Reporting needs to show where opportunities are developing, where customers are being lost and whether investment is improving results.
Our work at Go Live Data centres on accurate corporate data and understanding intent. A business showing relevant interest deserves a different approach from one that has given no indication it needs your service. That allows sales and marketing teams to concentrate their effort more intelligently.
The commercial lesson therefore extends beyond marketing. Before entering another sector, look at the demand, buying process and likely cost of acquisition. Before adding new people to the team, understand whether the constraint is capacity, capability or an inefficient process.
Technology can help, including AI, but the quality of the information underneath it matters more than many realise. Automating decisions using outdated or inaccurate data means making the same mistakes quicker and on a larger scale.
Be clear about acquisitions
Organic growth gives a company time to develop its offer and understand customers. Acquisition can provide access to expertise, established relationships or capabilities that would take years to build.
At Go Live Data, acquiring MIB brought specialist automotive and fleet data expertise into the business. There was a clear connection with our existing capabilities and the customers we could serve.
That connection matters. Buying a company creates work well beyond completing the transaction. Systems, customer relationships, responsibilities and working practices all need attention. The purchase price is only part of the commitment.
Founders considering an acquisition should be able to explain how the combined business will operate and who will manage the integration. If that responsibility falls to people already stretched delivering the existing business, the opportunity needs looking at in more detail.
Change how you lead
As a business grows, the founder has to create room for other people to make decisions. That sounds straightforward until somebody takes an approach you wouldn’t have chosen yourself.
I’ve had to make that transition from being involved in everything – to giving others greater responsibility. It requires clear expectations, capable people and a willingness to let-go and to listen. Constantly intervening makes delegation pointless and leaves the business dependent on your availability which will always hinder growth.
Culture becomes more consequential as the team expands. People learn what matters by watching decisions about recruitment, customers and performance. If commercial pressure repeatedly overrides the standards you claim to hold, those standards soon lose credibility.
For Go Live Data, respecting recipients and improving the relevance of outreach are central to our proposition. Those commitments need to survive decisions about revenue and expansion. Otherwise, we undermine the reason customers chose us.
The right path to growth depends on the business you want to own, the market you serve and the obligations you are prepared to accept. A larger company brings little satisfaction if margins weaken and delivery becomes unreliable.
My advice is to know the numbers, test the assumptions and give people the authority to do their jobs.
Be ambitious about the opportunity and realistic about what it takes to deliver. The next stage should leave you with a business that can support its commitments, retain its customers and fund and sustain the future of the business.
