[vc_row][vc_column][vc_column_text]We all dread that moment when our business growth will level off and start a downward slide. Watch for these 9 indicators that trouble is on the way.
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JANUARY 27, 2014Continued growth is the lifeblood of the small business. A slowdown—however slight—can signal the beginning of the end for even the most successful companies. Those small businesses that experience year-over-year growth embrace certain tactics and behaviors that help guarantee continued success.
For the small-business owner, the pursuit of enduring growth is one of your most important tasks, says Vinay Tannan, Ph.D., a U.S. patent agent and founder of Taan Consulting
, an intellectual property strategy and business development agency. “Sitting back on your status quo can be disastrous,” he says. “As soon as you get complacent and take your foot off the gas pedal, something negative could happen, such as your flagship product becoming obsolete or a competitor stealing your market share.”
Is Slowdown Inevitable?
There is a natural life cycle that even the most successful businesses come up against, says Ken Moll, founder of Blue Elevator , a business consulting and advising firm. “Everything seems to reach a point of ‘diminishing returns.’ Whether it’s a fitness plan, a particular diet or the strategic plan of a business, there’s a general algorithm: Start up, growth, plateau; then decline. If you have not designed your strategic plan and your underlying processes to anticipate and usher in change, you are likely to eventually hit a plateau.”Indicators Of A Slowdown
If your business is in one or more of these scenarios, you may be leveling off and in danger of a slippery slide down. 1. You don’t have concrete, measurable goals for changing, refining and improving your business. 2. There is no clear vision for the company that starts at the top and filters down throughout the organization. 3. You don’t regularly analyze your customers, competition and environment and then innovate and adjust your strategy in response. 4. You repeat the same procedures and actions at your place of business every day, week and year. 5. The last several months or year of P&L (Profit and Loss) statements are about the same. 6. You aren’t seeing a consistent flow of new customers. 7. You haven’t introduced any or many new products or services. 8. No significant changes have been made to your website recently. 9. You’ve made some recent key decisions based on emotions, rather than objectively.Stop The Slide Before It Starts
The key to avoiding a slowdown is beginning a new period of growth before you reach that inevitable plateau, Moll says. “Your business won’t max out at a certain level if you build in the capability to reinvent and innovate,” he explains. “Most of the time, this will require a new strategic plan, a new process and often new, if not redirected, employees who stay observant regarding any changes. It may also mean getting a fresh, outside perspective.” The moment you begin to see incremental improvement taper, you can suspect leveling off. “A business must be vigilant to measure all of its KPIs (Key Performance Indicators) to identify trends,” Moll says. “For example, if you see a decline in new customers for several months or a particular type of product sale diminishes over time, that’s an indication of a slowdown, and it should be investigated so you can reverse the trend.” The indication that growth is stagnating will be different for each company depending on its business objectives and KPIs, Tannan adds. “A company might be striving to maximize sales, increase its total customer base, improve customer retention or expand its product line. Whatever the case, having a growth and innovation strategy for your business isn’t a luxury—it’s a necessity,” Tannan says. “When companies track this data over time, that helps ensure that their ongoing efforts are moving the needle in the direction of sustainable growth.” A freelancer since 1985, Julie Bawden-Davis has written for many publications, including MSN Money.com, Parade.com, Entrepreneur, Better Homes & Gardens and Family Circle. Read more articles on business growth. Photo: Thinkstock[/vc_column_text][/vc_column][/vc_row]
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© Julie Bawden Davis