Apparently the percentage of startups failing within the first 3 years is really high. I don’t want to talk about how many — I think I’d rather not know. (Sort of like the bumblebee legend: it shouldn’t be able to fly, but no one told the bumblebee, so it does just fine.)
Growing is great fun, and everyone strives for it. But nobody really talks about how expensive it is.
A couple of weeks back I sat down and looked through the cost of winning a new account for my medical device company. Once we have done
- case support
- Follow up
….we have spent around 13.000GBP. Now, if you multiply that with 20 (the number of new accounts we started up last year for Galaxy), it becomes a big chunk of cash! No matter what the profit on each sell is, that is still an investment of a lot of time and money up front.
Sales growth + Profit decline
Overall we grew sales with 48% last year….an absolutely oustanding number in medical device. But profit declined dramatically, as we invested in growing the number of accounts.
Do your calculation of how much it costs you to win a new account. Now you have a great insight to how much cash you will need to grow your business.