Starting something new is almost always exciting, and this certainly includes starting a new business. Whether it’s that first big yes, breaking a new record or connecting with that one thought leader you’ve always looked up to, startup life begins with a lot of excitement and movement. As the months pass and the new hires settle into routines at the office, you might start taking stock of your surroundings. When you take a look at your growth, you might notice that it’s looking less and less like a hockey stick and instead you’re feeling more and more like:
What’s happening? Your startup is plateauing. A study released by Market Strategy Group and the Polsky Center for Entrepreneurship recognizes that the Growth Plateau is an inevitable obstacle in the lifecycle of many businesses/startups. Take for example Blockbuster and Family Video. Both companies were in the bricks-and-mortar video rental industry but one - Blockbuster - failed after the advent of streaming services like Netflix, while the other - Family Video - found ways to thrive and continue growing. The way that businesses approach the Growth Plateau ultimately determines their success. Wondering if you’re headed towards or at the Growth Plateau? Read on to see why you’re plateauing and what you can do about it.
Your business plan is outdated
It’s no wonder that disruption became the hot new buzzword around the time that startups were launching but contrary to that active spirit of the verb, a lot of startups get stuck at disrupt and forget to keep doing it. Maybe your business plan was a hit when you first started, but you can’t keep going on like this. It’s important to keep innovating, and your business plan needs to reflect that whether you’re a small business, or you’ve moved on to the big leagues. You’d be surprised at how much changes about your customers, your target market or the environment/atmosphere of your field in a short amount of time. Sit down and pick apart what works, what needs to change and don’t forget to set big goals. For tough decisions, take John Lee’s, president of Hostway, advice: set a deadline and stick to it. Even if you don’t have 100% of the information you need, John says, “make the decision anyhow because putting off decisions is generally more detrimental than deciding and then making the necessary course corrections afterward.”
Your prices are off
Your startup is plateauing because you’re either charging too much or too little, and it’s impacting your revenue. When you charge too much, you make your product inaccessible to people who might be perfect, lifelong customers. You’ll need to do more market research to see if a lower price-point will open up new markets for you to reach into and further research to pinpoint where that price should sit. If it’s the latter, you’ll need to add value to charge more. In his book, Customer Centricity, Peter Fader, marketing professor at the Wharton School at the University of Pennsylvania, makes an excellent point that products and services should be priced accordingly so that when more people opt-in or buy, the price should only decrease for the product or service. Simply put, you can’t raise prices just because you need to. If you made a mistake in pricing, you’ll need to add value to your proposition either through innovation or marketing to justify a price increase. Regardless of the way this ends up, you should consult data to ensure that you’re choosing the right price and you should have an on-going review to make sure it stays in line with the market and with your offerings.
You don’t have a recognizable brand
The Nike swoosh, Siri’s voice, and your college hoodie are all branding efforts - they set brands apart and they allow people to participate in them, claiming it as their own. Further, when you make your brand something that people want to be a part of, you’ll fuel word of mouth and see how brand recognition breeds more organic leads. Your startup is plateauing because you don’t have anything that sets you apart, or if you do, you haven’t made it accessible for your fans and customers to show it off to the world. What you’ll need to do is create a branding strategy or include something that sets you apart to your branding strategy. Ask yourself what you want your customers and fans to be a part of and then ask them how they’d like to do that. Take colleges, for example; the Collegiate Licensing Company reports that colleges spend $4.62 billion a year creating merchandise and college students spend more than that to get in on the action and display that they attend or attended that college. The result? Incredible word of mouth marketing. There’s nothing that influences people more than the advice and influence of their peers. It’s better than you saying it yourself so you can’t expect your business to grow if you don’t set yourself apart and let people participate in it.
You’re not looking for new opportunities
In a world where you can get everything delivered and everything customized, businesses need to remember to be proactive. Inbound marketing is useful; it builds trust and authority, and it helps people from all over your region or the world find you. We won’t deny that it’s an important pillar of a sales and marketing strategy. However, your business will inevitably plateau if all you’re doing is relying on inbound strategies to bring in customers. This is why you need to include outbound in your strategy. Luckily for the busy owner, just as technology has made deliveries quick and easy, technology has also made your outbound strategy quick and easy. With CRMs that can organize emails into workflows and sequences depending on your customer’s profiles and buyer journeys, you can reach out to people much better than ever before. There are also ways to call your prospects without building your team or spending months training new hires. With a sales call force, you can qualify leads faster then bring warm leads to your existing sales reps to close. If you combine both calls and emails for outbound sales, you will get out of the Growth Plateau and push through to further growth.
You’re not asking for help
The sooner you realize that you can’t do it all, the happier you’ll be and more importantly, the quicker you’ll get out of your plateau. Smart business owners delegate so if you haven’t started, it’s contributing to the plateau (if you don’t know what to delegate, delegate the work you want to do). Asking for help can mean promoting a member of your team to take on some of your responsibilities or looking for help from B2B products and services which can sort out legal, financial and even parts of the sales process. There’s no need to reinvent the wheel when these businesses have dedicated themselves to figuring out the best, quickest and most efficient ways to deal with your company's problems. There are legal firms who will write contracts for you as well as call forces that will qualify leads for you and accounting firms that will sort out your taxes. Don’t shrug off asking for help. Everyone knows that time is money, and if someone can do it better than you, it’ll save you time and money down the line. Analyse where you’re losing time, research B2B companies that can help you and don’t forget to negotiate.
In their study, the Market Strategy Center and the Polsky Center for Entrepreneurship identify a bias for action as one of the most important factors in determining if a company will succeed in the long term. A bias for action means that businesses are willing to act before all the facts are in and adjust accordingly to new insights on the fly. For new companies, this is very familiar. But as a company settles in you might start to notice that you’re not keeping your business plan updated, something is off with your prices, you don’t have a recognizable brand, you’re not looking for new opportunities, or you’re not asking for help. All of these things together or individually will place you right in the middle of a growth plateau. To get out of the plateau, you need to act. You need to revise your business plan, your prices, and your branding. You’ll also need to look for new opportunities and ask for help. Once you see your growth pick up again, don’t forget these lessons. You need to keep acting to keep growing. Don’t get stuck!