Overcoming Stagnant Growth: Strategies to Break Free From a Business Plateau
Plateaus are a normal event in the life cycle of any business, but that doesn’t make them any less frustrating. What was once an effective driver of revenue and growth can suddenly stop working leading to a disconnect between effort and results. According to The Brookings Institution, only 1% of all U.S. businesses generate more than $10 million in annual revenues.
There is no shortage of “simple tips” for rebooting your growth: trying new sales tactics or engaging in team-building exercises. While these ideas may seem enticing, they often prove to be a waste of time. Plateaus are part of the business lifecycle and a focus on quick fixes may overlook the broader perspective.
Often, a plateau is a symptom of growth that wasn’t built on a sustainable foundation.
The ups and downs of your business are events that should be anticipated and incorporated into a strategy for navigating your way to bigger goals. Strategies differ from “fixes” because they’re built on solid financial data, visibility into cash flow, and profitability – and they’re calibrated to align with long-term goals. Below are common causes of plateaus and what you can do to grow beyond them.
Common Causes of Stagnating Growth
Many factors can contribute to a period of stagnating growth, but you can’t move your business off a plateau with a short-term shakeup. Often, a plateau is a symptom of growth that wasn’t built on a sustainable foundation.
What works to get a business off the ground isn’t the same thing as a strategy for taking a business to the next level.
Entrepreneurs often have no choice in the early stages but to wear multiple hats: founders serve as head of strategy, operations, sales, marketing, customer service, accounting, and even the shipping department – all at once, with a laser focus on the smallest day-to-day details.
What works to get a business off the ground isn’t the same thing as a strategy for taking a business to the next level. A plateau is often a sign that you’ve outgrown the sweat equity approach to growing your business.
When the business reaches a growth plateau often the cause can be an unsustainable, hands-on approach where the owner is playing too many roles. This can often lead to outcomes that include:
- Becoming irrelevant in the marketplace due to lack of innovation
- A reluctance to raise prices
- Not investing in a robust sales team
- Failing to differentiate between profitable and unprofitable clients
- A reluctance to invest in new technology or new people
Vision and Strategy are Key to Keeping You Off of Growth Plateaus
It’s important to recognize when it’s time to start delegating those roles and shifting your attention to the bigger picture. Establishing a strategic vision and a roadmap for short and long-term goals allows your business to evolve and leaves you positioned to set the course, innovate, and adjust while relying on others to manage the day-to-day role of implementing your vision.
As a business owner, no one understands your vision and business like you do but if you don’t have the time and space to innovate and craft the strategies for achieving it, you can find yourself stuck on a growth plateau.
When you shift your focus from the day-to-day to a more strategic role, it’s important to have a clear understanding of the core value your business provides and focus on continually improving it.
Over decades of providing accounting and business advisory services to growth-minded business owners, the Kirsch CPA team has seen numerous examples of once-thriving enterprises hitting a plateau because of strategies that failed to evolve. No matter the goods or services you provide, businesses rarely succeed on a static model.
Without a vision, the healthiest of businesses will eventually face a plateau. A great product and a steady source of revenue will not insulate you from a shift in market conditions.
Developing a vision starts with asking the right questions. A clearly defined plan of where you want to go is the starting point:
- What’s your exit strategy and how much do you want your business to be worth at that time?
- Where do you want to be in 3, 5, and 10 years?
- Who is the ideal client for your products or services?
- How do you define success?
- Does your current client list include clients who are not profitable in the long term?
- Do you have the right people in place for guiding customer relationships
- Are there new services or products you should be offering?
- Are there new geographic markets you could expand into?
- What factors are holding you back from meeting your short and long-term goals?
Help for Navigating a Business Plateau
You don’t have to answer these questions on your own. Professional business accounting and advisory services can provide you with the financial data and visibility you need to hone in on the sources of what’s working and what isn’t.
Kirsch CPA Group has decades of experience partnering with growth-minded entrepreneurs to build the strategies and resilience they need to reach your business goals.
With a proven and forward-looking process for driving sustainable business growth, the Kirsch CPA team can provide you with the solid financial foundation and insights you can use to take your business to the next level.
Contact us to learn more about how we can help shore up your financial picture and avoid a lengthy stay on the plateau.
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