Money is hard to Control.

Growing a business requires a careful balance of innovation, hard work, and strategic financial management. Controlling your money is crucial to sustaining growth and ensuring long-term success. Let’s explore how to manage your finances effectively while scaling your business, using the real-life case study of Sara Blakely, the founder of Spanx, a brand that has become synonymous with entrepreneurial success.

Step 1: Start Lean and Bootstrap

Case Study: Sara Blakely’s Lean Beginnings

Sara Blakely started Spanx with just $5,000 of her own savings. She didn’t seek external funding or loans initially, opting instead to bootstrap her business. This approach forced her to be resourceful and make every dollar count.

Actionable Steps:

1. Self-Funding: Start with your own savings to maintain control and avoid early debt.
2. Minimal Expenses: Keep initial expenses low by working from home and avoiding unnecessary expenditures.
3. Resourcefulness: Find cost-effective ways to create and market your product.

Step 2: Maintain Rigorous Financial Discipline

Case Study: Sara Blakely’s Financial Discipline

Despite Spanx’s rapid growth, Blakely maintained strict financial discipline. She reinvested profits back into the business rather than drawing a significant salary or making extravagant expenditures.

Actionable Steps:

1. Budgeting: Create a detailed budget and stick to it. Monitor your cash flow regularly.
2. Reinvestment: Prioritize reinvesting profits into the business to fuel growth.
3. Frugality: Maintain a frugal mindset even as revenues increase.

Step 3: Smart Hiring and Outsourcing

Case Study: Spanx’s Strategic Hiring

Blakely hired only when absolutely necessary and outsourced many functions to keep overhead costs low. This allowed Spanx to scale efficiently without the burden of a large payroll.

Actionable Steps:

1. Strategic Hiring: Hire only when essential roles need to be filled.
2. Outsourcing: Outsource non-core functions to specialists or freelancers.
3. Cost-Benefit Analysis: Evaluate the cost and benefit of each hire to ensure it contributes to growth.

Step 4: Leverage Low-Cost Marketing

Case Study: Spanx’s Guerrilla Marketing

Blakely utilized creative, low-cost marketing tactics to promote Spanx. She sent free samples to influential people and relied on word-of-mouth and media coverage to build brand awareness.

Actionable Steps:

1. Social Media: Utilize social media platforms for cost-effective marketing.
2. Influencer Collaborations: Partner with influencers who can promote your brand to a broader audience.
3. Public Relations: Leverage PR to get media coverage without high advertising costs.

Step 5: Monitor and Adapt Financial Strategies

Case Study: Spanx’s Financial Flexibility

Blakely continually monitored Spanx’s financial performance and adapted strategies as needed. She wasn’t afraid to pivot when necessary, ensuring the company remained financially healthy and poised for growth.

Actionable Steps:

1. Financial Monitoring: Regularly review financial statements and key performance indicators (KPIs).
2. Flexible Planning: Be ready to adjust your financial strategies based on market conditions and business needs.
3. Expert Advice: Consult with financial advisors or mentors to refine your financial management practices.

Step 6: Secure Funding When Ready

Case Study: Spanx’s Strategic Funding

Blakely eventually secured funding from Oprah Winfrey, whose endorsement provided a significant boost. However, she waited until Spanx was already successful and needed the capital to scale further, ensuring she retained control over the company.

Actionable Steps:

1. Timing: Seek external funding only when it’s necessary for growth and when you have a solid track record.
2. Investor Alignment: Choose investors who align with your vision and values.
3. Control: Aim to retain as much control over your company as possible.

Conclusion: Financial Control as a Pillar of Business Growth

Controlling your money while growing your business is about making smart, strategic decisions and maintaining financial discipline. Sara Blakely’s journey with Spanx offers valuable lessons in starting lean, being resourceful, and making every dollar count. By following these steps, you can manage your finances effectively and set your business on a path to sustainable growth.

Remember, the key to financial success in business is not just about making money, but about managing it wisely. With careful planning, strategic investments, and a disciplined approach, you can control your money and grow your business effectively.