To understand why growth slows or stagnates in any business, we first need to look at how a typical business evolves and why the frustration starts to mount as this growth slows. We call this the ‘Growth Roller-Coaster’.  

BLOG - Why Businesses Stop Growing - Part 1

Why Businesses Stop Growing - Part 1

To understand why growth slows or stagnates in any business, we first need to look at how a typical business evolves and why the frustration starts to mount as this growth slows. We call this the ‘Growth Roller-Coaster’.  

Take a look at the illustration below. The starting point is the beginning of a business, usually created by a sole proprietor or a small partnership/ directorship. Typically, the owners are very hands-on at this stage with few, if any, staff and modest resources. In the early months and years the business grows very well.

Customers receive a high degree of director attention with high levels of expertise and customer-care as a result. Costs in the modest operation are relatively low and the business can respond quickly to customer and market needs.

Word is spread by customers and referrers about the great, cost-effective products or services and new business is easily gained. The business quickly expands to a peak at point A, driven by the personalities and skills of its owners.

In an ideal world, two conditions will now be met. Firstly, the directors will recognise that they have reached the pinnacle for a personality-driven business and secondly, the business and financial performance will be at a level that completely satisfies them. In reality, neither is the case.

What happens in the real world is that the owners continue to drive forward. However, with growth problems materialize… 

In Part 2,  discover what these problems are and how to solve them!