Balancing growth and short-term revenue
Long-term growth builds sustainable competitive advantages while short-term revenue keeps the business alive. A balanced plan allocates resources to both.
Framework to use:
- Core operations: maintain profitability and customer satisfaction today.
- Growth experiments: allocate a fixed percentage of budget to new channels or products.
- Strategic investments: plan multi-year initiatives (brand, IP, tech) with milestones.
Practical allocation
- Cover essential operations and ensure positive unit economics first.
- Set aside 10–25% of net profit or budget for growth experiments depending on risk tolerance.
- Track both short-term KPIs (cash, churn) and long-term KPIs (market share, brand awareness).
Decision rules
Use clear criteria to continue or kill experiments (e.g., CAC payback < 12 months). Reinvest successful experiments into scaling while protecting core margins.
Strategic discipline
Document priorities and evaluate trade-offs regularly. Use scenario planning to understand cash needs and growth pacing so you can fund long-term bets without jeopardizing operations.