top of page

Every Company Plateaus: Here's How to Get Up and Over Yours

Do you feel as if your business is struggling to grow? After investing your heart and soul into your small business, a growth plateau can be a nerve-wracking experience. Fortunately, it is quite common to witness a leveling off of growth. This commonality among all businesses also means that it is well-funded in terms of solution creation.

"How do I grow my small business and overcome its current plateau?" -Potentially You
Picture of a mountainous plateau
There's ALWAYS growth beyond the plateau!

It is no exaggeration to say that literally every company levels out at some point or another, often repeatedly over the lifetime of the business. It is also highly probable, with the right solutions, to overcome any plateau and get revenues expanding again.

 

Understanding Business Growth Plateaus

A business plateau is possible at any stage of the business cycle. However, it is more common within the early lifetime of a business. As a ‘new’ business you have much more potential for people to first discover your business and give it a test run. For example, if your product consists of a novel service or product you will likely have a period of experimentation from your customers driving at least a portion of your total sales. As those experimental customers decide whether to purchase your product in the future or not, you’ll witness what we call the First Growth Plateau.


Of course, this is but one example. However, it is important to remember that reaching a plateau does not necessarily mean that you’re the cause. In the example above, the leveling off of your new sales is simply a natural step in the business life cycle. Besides, businesses plateau for any number of reasons. They occur most often during transitions in your business cycle and often because of things outside of your control. Because of this, you're more than likely to experience several throughout your business ownership.



Identifying the Many Versions of a Plateau


Before we dive in to some general solutions, it is first important to understand how to be

vigilant in identifying an impending slump. Similar to other nefarious items of life, the earlier you are able to identify them, the easier they are to rectify. Recognizing plateaus while they're still in an early phase requires an examination of a few details.

Woman looking in a hidden cabin.
Well hidden, but worth finding.

The trickiest part about any of this is that they can present themselves within any dataset. Another way to put it is that they can hide themselves between a whole host of areas of your business; each of which can be devastating or, as we will soon explain, maybe even helpful to your business.




Here are some critical areas to be mindful in your analysis, but keep in mind these are but a few examples.


Revenues or Profit

Believe it or not, these two are mutually independent in terms of growth plateaus. It is quite possible for revenues to taper off while profits soar and visa versa depending on many factors. One example: your customer base may be somewhat limited, but you invest in cost reduction efforts. In this scenario you should expect your revenues to level out while your cost reductions enable profits to rise. Without understanding your market and identifying the need for cost reduction early, you might expect BOTH to decline.


Cash Flows

While clearly cash flows are related to revenues/profits, there is a potential for cash flows to not match in terms of growth. For example, as you grow you may decide to implement some sort of financing option for your customers. This likely will open the window for more sales since you’ll be unlocking the ability to purchase even if cash isn’t fully on hand at the time of sale. However, this means that your initial sale cash flow will reduce relative to the total potential invoice values. (Note: this is often a good thing as to space out your regular flow over time; guarding against sales troughs.) In addition, you are likely to run into delinquency issues which can affect cash flows and profitability.