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Regardless of the level of success a company achieves initially, most firms eventually reach a point where their growth plateaus. Sales growth stagnates, customer reviews turn out to be less enthusiastic, and as a business leader you’re feeling such as you’re not making progress.
Left unchecked, complacency and stagnation can turn out to be extremely damaging to a business, stopping it from achieving initial goals or achieving key performance indicators. By understanding why your business growth stalls and how you’ll be able to overcome it, you’ll be able to get your business back on track.
Why do firms fail?
Most firms experience stagnation or even recession sooner or later. There are many the reason why this may increasingly occur. In the case of small businesses, stagnation often occurs due to a lack of resources, each financial and human.
Market changes may also cause a business to stagnate. New competitors, changing customer needs, disruptive technologies and other aspects largely beyond your control can hinder your growth. Companies in such situations must learn to adapt their offerings to survive and avoid losing the market.
Quite often, nevertheless, business stagnation is related to the people managing the organization. Without the right mindset, a leader whose business is currently stagnant will likely be unable to get things moving in the right direction again.
1. Assess your systems and business model
Business models is probably not designed to scale the company effectively. This easily leads to stunted growth simply because existing systems and processes cannot handle more customers or sales.
Unfortunately, the problem can get worse if poor scaling strategies are implemented, resulting in poor customer support, poor hiring strategies, worker burnout, and more. Premature scaling has been linked to as many as 70% of startup deaths.
An assessment of your current systems and business model must be made in light of the unique value proposition you are trying to deliver, your operational processes, and the resources available to your team. Analyzing these aspects in the context of the market may also help discover weaknesses that need to be modified to higher serve customers.
2. Engage the right people
Especially for small businesses, hiring the right people can make a big difference in overcoming stagnant growth. This is very true for sole proprietors who have tried to do all the work themselves, including activities outside their area of expertise.
For example in A case study by PMU Launch, a beauty education development agency founded by Renato Fabri and Kyle Koschel, Brows By Carina’s revenues stagnated, remaining at $1,200 per thirty days for seven months. After implementing strategic promoting and improving the sales call process, she increased her monthly revenue to $13,000.
However, this led to a recent plateau as the company suddenly became too weak. Hiring an appointment setter helped reduce Carina’s workload, allowing her to increase her monthly income to $18,000.
Finally, hiring an operations manager to oversee day-to-day business operations allowed the company to focus on strategic growth initiatives and achieve peak revenue of $29,000 per thirty days. It’s incredible that just two staff changes freed up so much time that it completely modified the direction of the company.
3. Reconsider your marketing
Marketing is one of the most useful tools for increasing sales and leads that help your business grow. If you have the right people and effective systems in place but are still stagnant, it’s price taking a look at your channels and marketing messages to see if they’re still reaching the right people in the right way.
In addition to fine-tuning your message to effectively reach your audience, it is best to also look into different platforms and promotional opportunities that might work in your area of interest. For example, Airbnb has turn out to be famous for increasing its booking and registration rates by 300% after introducing a referral program that rewarded existing customers with travel credits.
Marketing is about optimization. Whether your problem is in targeting, messaging, platform, or other areas, testing different options and tracking the results can assist you supercharge your development efforts.
4. Check your considering
Courageous CEO argues that business stagnation is often a side effect of a business leader reaching a personal plateau. This is a call for self-reflection – if you have lost your growth mindset, it could be difficult to maintain the desired pace of business growth.
To solve this problem, they recommend that entrepreneurs start by rethinking their vision for the company. Think about what you initially wanted to achieve in your business and why – the sense of purpose that gave you enthusiasm and drive.
Assessing your personal status and reflecting on your original vision for your business can assist you sense whether you have lost your “why” and what changes you would like to make on a personal level to regain your enthusiasm – even if meaning changing your vision for your business.
Just because your business appears to be stagnant does not imply it has to stay there. By drilling down to understand why your business is stagnating and then addressing the specific issues that are limiting your growth, you’ll be able to get back on track to achieving your most vital business goals.