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In addition to making sure you have momentum, you should understand your customer acquisition process. The customer acquisition plan/process can very well make the difference between scaling or not, success or failure.
A very basic exercise that you should clearly understand as a business founder/owner/leader, and one that you may need to adequately communicate to any potential investor or other vested-interest person:
How much does it cost to acquire one additional customer? However you get a new customer (ideally as inexpensively as possible, like via word-of-mouth), whether it is direct sales by a paid sales person, or via a channel partner, or pay-per-click – whatever, understand this cost. Sometimes this is simple, but many times it isn’t. If you spend $50 per click in your PPC campaign, and 20% of those people make an inquiry, and then 10% of those remaining people convert to a paying customer, it can wind up being a lot more than you realize. In this case it would be $2500 (50 clicks – 10 of those inquire, 1 of those converts). This may or may not scale in your model.
How long will that customer stay? Ideally you have a recurring revenue model so you know that each customer is going to regularly bring in X dollars per month. Even in that MRR model, customers don’t stay forever. It would be great if your product was so sticky (super-high retention for one or more reasons) and awesome that they stayed “forever”, but in reality customers leave for one reason or another. This loss of customer is called churn. You are always going to lose a certain percentage of customers each month. You need to track and understand this metric – and make sure it is worked into your model assumptions.
How much will that customer pay over their term with you? If a customer is going to pay $X dollars per month, and will stay an average of Y months (after accounting for churn), then it’s pretty easy to estimate the lifetime revenue of an average customer (and then, after understanding all costs, figure out the lifetime value [LTV] of each customer).
If you understand these three things you should be able to do some basic math and understand the scale and success potential of the model. If it takes $2,500 to acquire a new customer, and that customer is going to remain a customer for 18 months, and the customer is going to spend $500/month with you… then you know you have a 5 month period to recover your costs. Anything less than that and you lose money (it is actually longer than that because of overhead, cost of goods, etc. but this is a simple example). The average customer in this example is going to bring in $9,000 of revenue, so $6,500 more than spent after the cost of acquisition is deducted. If you can consistently repeat this process, and you’ve actually shown consistent momentum, using this very basic estimation it sounds at least initially like this is a scalable model. For every $2,500 you spend, you’ll bring in $9,000 in revenue, and about $6,500 in gross profit (again – simplified – need to subtract tons of overhead costs, some fixed, some tied to cost of goods or providing the service).
Do you understand this for your business? If not, start thinking about it and manage it. If the “math doesn’t work out” you may need to find a less expensive way to acquire customers, or a way to convert a larger percentage of prospects in the pipeline, or charge more for your services, or figure a way to keep the customers happy and as paying clients longer. There are a lot of things to potentially tweak, but you need to understand all the factors before you can start optimizing the process.