Businesses often start off with a bang, but many lose steam quickly. A company can hit a plateau at various stages of its journey, but this can commonly occur after a large success. If you’re a startup or a company that has been in the market for a few years, here are five ways to recover from a growth plateau.
1. Reinvent the growth strategy
More often than not, companies with a flawed business strategy hit a plateau sooner than they expect. You need to plan a growth strategy well in advance and understand the KPIs to prevent the possibility of a plateau. Growth strategy doesn’t just include linear growth. Your approach should be multifaceted. The growth metrics can be expanding to new territories, increasing market share, launching new products, improving ROI per customer, and re-evaluating the standards of profits. No matter your focus, you need to have a year-on-year plan to avoid hitting a plateau.
2. Understand your competition
Not paying enough attention to your competition can be detrimental to your business. In all likelihood, you and your competitors are fighting for the same customer base in an oversaturated market. Eventually, your competitors may come out with a better strategy and eat into your market share by analyzing your performance and finding gaps. If you want to keep an upward trend of growth, start by examining and understanding your competitors.
3. Put the focus on scalable IT infrastructure
This is one of the highly underrated reasons behind a company’s growth plateau after an initial success. Companies start out with a rudimentary level of IT infrastructure. As the company grows, the demand increases. However, legacy software cannot produce a performance beyond its capacity, thereby hindering your growth. It’s important to understand why your business needs custom software to sustain your business and address any new development in the strategy.
4. Acquire or merge
Companies that actively look to either acquire a business or merge with one, are more likely to avoid hitting a plateau. When you merge with a company with shared interests, you stand to utilize a new set of workforce and technology to improve your product. By acquiring a business in the same field, you can upsell to new customers and by acquiring a business from a different field, you bring a fresh perspective that can get your creativity flowing again.
5. Get out of the comfort zone
It’s common to see companies becoming complacent after tasting initial success. It’s easy to slide into the comfort zone and stick to what’s working for you. However, the initial euphoria eventually gives way to the dreaded plateau. It’s important to have a long-term game plan to anticipate this. Forming an advisory board can help you chalk out a scaling strategy.
Hitting a growth plateau is quite a common phenomenon, but so is overcoming it in time. Young businesses should be aware of this trend and should be realistic enough to handle it in order to survive beyond the first five years.