As a business owner; hitting the dreaded business plateau can make additional revenue pushes feel futile. You may wonder; "Why isn't the company progressing? What am I doing wrong?" Companies naturally expand and contract based on numerous factors; and not all of them are controllable. Like Sisyphus; these factors make hitting your quarterly goals feel like pushing a boulder up a hill.
Instead of banging your head against the wall (or climbing up your hill); let this article be your guide to breaking through the plateau. We have collected five ways to recognize the warning signs that your company is hitting a plateau and strategies to keep your business on the path to growth. They can also alert you to look for lulls before they happen.
1. Declining industry growth
A lack of overall industry growth is one of the first signs of future struggle. Slower or declining industry growth is unavoidable; but that doesn't mean your business should contract with it. If your company struggles to maintain revenue growth; it’s time to update your business.
Our solution: Shift your strategy. Brainstorm ways to generate additional revenue based on current market trends. Above all; move quickly with complete company transparency.
Transparent updates among employees and partners create confidence and resilience. Science dictates that species need to adapt to survive. The same goes for business.
2. Decreased customer acquisition
If your customer acquisition rate slows down; you need to know why. It could be a dip in the market or an issue in your company. Products or services may not attract interest as they did previously; or the market could be more saturated with competition. For instance; a change in your product line; or shift from your original company vision could change how your customers relate to your business.
Our solution: If the issue is company-centred rather than the industry; it's time to analyze your departments. What strategies were used in the past; and what has changed? There are several reasons for a reduction in client acquisition; which vary for each business. To increase customer acquisition; business leaders should take a holistic view of their operations to determine what changes will have the greatest impact. When looking at your data; see if there is a correlation between a change in your business made to your end product offering and your decline in customers. If there is; pinpoint the problem; address it; and adjust it.
3. Ideas seem less innovative
In business; nothing is so dangerous as the status quo. Too many companies etch what they sell in stone and refuse to change it. What kept a company running a few years ago has shifted; and reluctance or outright refusal to implement industry trends will leave your business behind. Your website wouldn't have pictures from the '80s. It needs to be updated - frequently. The same goes for the product or service you sell.
Our solution: Staying on top of market trends is vital to be more innovative. Since customer retention is more profitable than acquisition; consistently update your product or service to keep customers buying from you. In addition to retention; branch out into new markets that align with your updated vision. For new ideas; you can join industry networks; attend seminars/webinars; and brainstorm with your team.
4. Maintaining contracts through inflation
Like ideas and innovations; procedures often last longer than deemed effective. Whether it's inflation or a new policy; service agreements can change; leaving you with a heftier bill. Without evaluating processes that could benefit your bottom line; sticking to what you know increases your operational costs without corresponding increases in output or quality.
Our solution: Whether you work in-house or hire a consultant; review all of your agreements. Pay special attention to autorenewals; which can be raised or conditions added without your knowledge. Above all; streamline your optimization process. This process can be done yourself; but the easiest solution is to hire a cost consultancy like ERA Group (we're biased) to analyze; monitor; and reduce your operational spending. If you have had the same agreement for over a few years; it's time to assess whether it's still a good fit.
5. Increased debt levels
If you're a business owner; rising debt without reason (e.g.; purchasing another location) is never a good sign. This debt increases without a simultaneous increase in review or profitability and can limit your company's ability to invest in growth opportunities or innovation.
Our solution: Many business owners are unaware of how much they truly spend; and this opaqueness can cost you. Take the time to analyze each purchase in every department. Unfortunately; money can leak anywhere; and no stone should be left unturned. Completing your analysis may be time-intensive; but it pays off in the long run. To reduce time and resources; it may be beneficial to hire an outside source for a fresh perspective.
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Recognizing these warning signs can help you proactively address potential issues and avoid a growth plateau. At ERA Group; our consultants take all of these factors and create a plan that is as unique as the business being evaluated. Industry contractions happen; but being alert to inefficiencies and revenue dips is what keeps the best in the business moving forward.
