PitchLyst exclusive: Hyper-growth and scaling your business

The top executive at Fattmerchant, one of the fastest-growing companies in Florida, wants other business owners to know how they can follow in her footsteps.

Suneera Madhani, co-founder and CEO, shared the story behind the Orlando-based payments company’s growth, and her formula for scaling the business, at TiEcon Florida 2019.

Fattmerchant has raised $20 million in venture capital since it launched in 2014. The volume of payments processed has grown from $5 million the first year in business to $2 billion in 2018. It has close to 100 employees and occupies three floors of an iconic office building in downtown Orlando. Madhani was named one of the most influential women in her industry by PaymentsSource last year.

Here are the steps Madhani took to get to where she’s at today.

Timing. Most payments companies grow by adding salespersons who call on customers. When Madhani started Fattmerchant, she had limited resources, so she tapped an online presence, making the company appear bigger than it actually was. That garnered national media attention, including a story in Fast Company, as well as venture funding.

Although she had not set out to have a venture-backed business, “When we had the opportunity, we knew this was the time. The market had a demand. We could acquire new customers, so this was the right time to scale. Knowing the timing of your market, and where you are in your business, is something you need to identify.”

Set a goal. Her goal for 2015 was to grow 10 times over 2014. “We knew we had a product that could scale to every business in the nation. Everyone needs payment processing. Our model was very scalable. It was the right market timing. We were the disruptors in our industry. You have to determine where you are in your business. Identifying and having those goals in place is important.”

Evaluate the current state of your business. For that, the founder has to take a step away from day-to-day work. “You can’t be in the business to work on the business. You have to pull yourself out and look at it from a top-level approach to see where the current state of the business is. You have to understand what tools you have in place, what processes are working today, what’s amazing and sets you apart from the competition. And also you have to understand the challenges. You have to look at it from the lens of not being an operator of the business.”

From that understanding a founder can define and create a plan, she said.

Hire slow and fire fast. Finding great talent is one of the toughest challenges, she said.

“You have no name and barely any funding. How do you get amazing leadership talent to come and believe in your vision and work for sweat equity? It’s really important that you as the leader of the organization find the people who have the right core competency and the same values as you. People you are working with should have the same values as you do, because it’s important for your happiness and the happiness of the organization.”

Use tools. Understanding tools and processes is even more important than hiring, she said. “In the technology world today, there is a tool for everything  — sales and customer automation, onboarding, understanding the health of your customer. There are so many tools you can apply to your business versus doing manual processes. Understand which tools your industry is using, the top tools the giants are using in your industry sector, and don’t reinvent the wheel. It’s expensive to buy certain tools, but the ROI on the best tool is greater than trying to rig the system.”

Know the numbers. Madhani used two acronyms. CFIMITYM and CAC-LTE.

CFIMITYM means “cash flow is more important than your mother,” she said, adding, “If you don’t have cash to operate, you are not going to be in business.”

CAC-LTE refers to customer acquisition costs and the lifetime value of a customer. It’s one of the most important key performing indicators for her business, she said.

In addition, every decision a business owner makes should have a measurable return on investment. “A lot of times I’ve seen it only calculated on the sales end, but not the operations or product end,” Madhani said. “It’s really important to tie these metrics to all parts of your organization to make sure there’s an ROI on everything you do.”

Leading indicators. That’s not revenue collected, deals closed or number of customers acquired. Those are lagging indicators. Leading indicators are what drives those results, Madhani said.

For instance, lost customers is a lagging indicator. Leading indicators are factors such as how many times a customer calls for service or  how are they using your technology. “If customers are sticky and are using your tools every day, they’re not going to leave.”

Plan for the unexpected. Always have a contingency plan. “Every day is a challenge. Things always come up. You can’t predict everything, but learn from the mistakes of other entrepreneurs … Put yourself in an environment where you have great peers and mentors. Learn from mistakes early on and put processes in place to keep it from happening again.”

Spend your time wisely. It takes good time management to be responsive to investors, employees and family, Madhani said. She puts everything on her calendar, including breakfast with her daughters and date night with her husband. She schedules meetings in 20-minute time blocks, instead of the traditional one-hour time blocks.

Overall, execution is key. Businesses that scale up aren’t hindered by saturated markets, or even helped by outstanding ideas, Madhani said.

“We have a saying on the wall at Fattmerchant.  There’s no such thing as $1 billion idea. It’s only a $1 billion execution.”