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Wednesday 24th Jan 2018

7 reasons why your business growth might be stagnating

In the beginning a business has momentum to grow organically, but at some point, that stops or slows and in order to grow, you’re going to need an iron clad plan that can be implemented, scaled and adjusted in order to achieve growth. Here are my top 7 reasons why your business growth might be stagnating…

In the early stages of businesses growth, it’s like lilies on a lily pond, the business doubles year on year for the first few years and as the business owner or leader you’re thinking ‘I’ve got this nailed’.

Then without warning, usually at year 3 or 4, you’re waiting with an air of anticipation and excitement for the final set of year end numbers to arrive.

They ping into your inbox, you take a read and suddenly a feeling of disappointment consumes your whole body, a gut wrenching, sickening feeling inside as you sit back in your chair deflated.

The little voice in the back of your head starts to chirp in with unhelpful comments;

“How come we have flat lined or even gone backwards in our revenue and profitability?” 

 “I’ve worked harder than ever this year and all for what!”


Your business growth has stagnated, and you’re not sure how or why.

In the beginning a business has momentum to grow organically

how grown up is your business

When you’re starting from a zero baseline with a fair wind you can come out of the blocks fast. But, and yes there is a but, at some point, that stops or slows and in order to grow, you’re going to need an iron clad plan that can be implemented, scaled and adjusted in order to achieve growth.

Here are my top 7 reasons why your business growth might be stagnating…

#1 Lack of capital to fund expansion

Cash is vital for growth and a lack of it starves businesses from realising their ambitions. Yes, you need enough working capital to pay the bills, salaries and other regular expenses each month, but all you’re actually doing is getting by each month.

To grow your business into something bigger and stronger you need additional cash to fund the expansion. If cash isn’t available to put down a deposit for new premises, or purchase additional equipment or fund new marketing activity, then your business simply can’t grow. And if it’s not growing, then it’s either standing still or worse, falling behind.

#2 Customer acquisition is simply compensating for the customers you’ve lost

There is a danger for every business owner and business leader to obsess about finding new customers, all the while failing to focus on the customers they’ve already invested the time, effort, and money to acquire.

If you’re in the early stages of the business growth, then your focus might be weighted towards acquiring new customers. If this is the case, then great. Just make sure from day one that you have strategies in play to maximise and retain the customers you bring in.

Be aware of falling into the trap of becoming stuck in the acquisition stage. What you bring in through the front door will only compensate for what you’re losing out the back door if you’re not looking after your existing customers and realising the value they can bring to you.

#3 People hires have become an expensive lesson

The right people in the right role can accelerate your growth journey exponentially. The wrong people can set you back twelve months in a heartbeat, and be an expensive lesson both in terms of real cash and missed opportunities.

Most people challenges come about because the wrong people are in the wrong roles; a skills gaps, poor behaviours, a bad attitude, lack of desire to grow with the business, misalignment of values or a disconnect between the individual and their line manager.

These types of people challenges take time and effort to investigate, work through and resolve, without a guarantee that you’ll get back on track. This could, quite rightly, make you nervous and anxious about recruiting.

But remember, you can’t do it alone. You need people to help you grow your business.

#4 Operations are weak

It doesn’t matter how much work you’ve done to get your business ready for growth, if your operations are weak and your business falls over from the increase in sales, it’s a disaster.

You have to be able to deliver the basics. Fact.

An inconsistent customer experience erodes confidence and loyalty, usually resulting in your existing customer on the hunt for a new supplier, whilst calling you out as they ask for recommendations from their friends and family on social media.

90% of consumers today trust peer recommendations and only 14% trust your painstakingly developed advertising. If you’re not living up to your promise, then you’ll lose significantly more than just a repeat purchase.

#5 Sales planning and forecasting is flawed

If operational excellence represents the arteries of the organisation, sales is the heartbeat that feeds your business.

However, in my experience, most businesses are poor at sales planning and forecasting which ultimately impacts growth.

If you default to a ‘top down’ only approach based on either the historical performance of the business over the last few years (‘We’ve grown roughly 10% year on year over the last three years, so let’s target sales with 10% growth again’) or simply your growth ambitions, then I have no doubt you’ll have a gap between what you want to achieve and what you realistically can achieve.

The key to effective planning and forecasting is to adopt a ‘top down’ aspirational approach with a ‘bottom up’ reality check approach using actual sales data (conversion rates, lead times, lag times) and allow the two ways of thinking to meet in the middle. Whilst this won’t resolve your gap, it will open the door to the conversations that need to take place today.

#6 Lacking a strategic plan to grow your business

A strategic plan documents your aspirational vision, goals and targets across a 3-yr line of sight supported by a 12-mth detailed strategic priorities plan. This is usually then broken down into quarterly ‘bite size’ deliverables.

One of the common challenges faced by businesses without a clear strategic plan is that their leaders and owners get sucked almost exclusively into short term, re-active activities. Their time is dominated by constant tactical delivery and crisis management.

If you haven’t got a strategic plan, your people are not thinking strategically and you most days are heads down ‘IN’ the business, then a simple question to you ‘who is working ‘ON’ the business and setting it up for growth?’

#7 Change your mind-set, change the game

When growing your business there comes a point when you have a conscious awareness that you need to do things differently in order to achieve your growth aspirations. You’ve had this niggling feeling over the last few months, and you couldn’t quite put your finger on why you had it or what it was about.

You now know.

You have become aware of the difference between being a technical expert and running a business and the need to become a Business LEADER.

Growing a business requires a leader who will create growth strategies, guide and shape their implementation, and win the hearts and minds of their people to deliver with passion and commitment, not because they have to, but because they want to.

You need to change your mind-set in order to change the game.


Businesses can get stuck and usually only become aware when these 7 ‘signs’ become visible or out of alignment.

Taking the time to stop and objectively assess where your business currently stands today is an important first step in staying off the path to stagnation and getting on the path to growth.

Want to know more?

Join me for a live 60-minute webinar where you’ll;

  • Assess your business against the 10 key enablers of the Built to Grow Business Growth Pathway™
  • Understand precisely which stage you’re at and most importantly,
  • Know the specific actions to take and pitfalls to avoid in growing and scaling your business

Reserve your place today



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