The Plateau – If you’re at a Flat Point in your Business

July 6, 2009 at 6:00 am 4 comments

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Last week and this week, we are addressing specific situations of small business owners.  Last week, we covered The Upstart, The Recessionista, the Mompreneur (or Papapreneur).  Today, we’ll be discussing “The Plateau”.  I like to describe businesses that are at a standstill as having reached a plateau.

What is a plateau?

A business that has stopped growing (no changes in profit) has reached a plateau.  This is a business that has “maxed out” its market and its ability, but profits continue to remain the same.  In my observation, a business in the wedding industry that is flat for 3 years has reached a plateau.

Some questions to ask yourself…

The following are some questions that can be helpful to determine whether you’ve really “maxed out” your business’ potential:

  • What percentage of market share does your business currently capture?  Is it a large enough share that you feel you’ve truly captured the market?
  • What have your patterns of profit been since the inception of your business?  Have their been ebbs and flows? Is this part of the cycle?
  • Have you made changes to your business in the last 2-3 years?  Have those changes resulted in additional profits, or does your business remain flat?

“Maxing out”

The issue of “maxing out” is a big one for businesses that are established.  After a few years in business, you will start itching for new ways to grow.  You may start seeking another market to enter.  You may start thinking of ways to increase profits by doing more of the same, but with a new sea of customers.

Sean Low, Consultant to those in the Business of Being Creative, recently wrote a post on his blog discussing the phenomena of “Growth vs. Expansion“.  In this article, he discusses expanding your core business beyond your current offering.  He emphasizes that by finding new lines of business, you will be expanding your business to the customer base that already knows and loves you.  Sean describes a high-end wedding stationer who expands into other design specialities: “graphic design, papery beyond life events (and life events beyond weddings), interior design fabrics (wallpaper, textiles, linens, etc.), and flooring (dance floors, tile, carpets).”

Many small businesses may feel like they’ve hit a plateau because they have maximized their current offering, but they haven’t even begun to touch the surface when it comes to offering a whole array of products, conceivably becoming a lifestyle brand of sorts.

The mindset of Plateau

In my opinion, businesses don’t typically (and truly) plateau.  It’s the business owner’s mindset that may be at a plateau.  I am guilty of this myself.  We start to feel like we can’t do anything more to grow the business.  We are stuck in our ways.  We are stuck in a pattern of success and are scared of change.  So, we stay the same.  So, how to get around this?

Overcoming the Plateau

Derek of Prevential.com wrote recently about ways to overcome a plateau.  These are my favorites of his recommendations and some of my own:

  • Seek Outside Consultation
    Consultants can give you a fresh perspective on your business.  They can see things you don’t.  They can give you insight into what works and what doesn’t.
  • Get a Mentor
    If you don’t yet have a mentor, or an advisor, now is the time to get one!  A mentor or advisor can be like a fairy godmother in helping some of your greater goals happen.
  • Take Some Risks
    Many business owners who reach a plateau, have stopped making changes and taking risks.  What’s holding you back?
  • Find Growth/Expansion Opportunities
    Like we discussed earlier, how can you expand your lines of business?  How can you broaden your brand?
  • Scale Business Down
    Instead of taking the offensive (growing income), how about taking the defensive (cutting expenses)?  Where can you cut the fat in your business?  If you can trim some of the inefficiencies and wasted costs, chances are you can maximize your profit to a whole new level.

And, if you find yourself in a plateau in 2009, it may be a case of economic slowdown.  Scaling your business down now may mean that you are more efficient when the economy picks up again.  In a few years, you’ll certainly start to see an upswing in your profits.

See you back here tomorrow for “The Shy One” for business owners whose own ambition scares them.

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Entry filed under: Inspiration, Money Makers, Money Savers, Strategy.

Happy Fourth of July! The Shy One – If Your Own Ambition Scares You

4 Comments Add your own

  • 1. whitney elizabeth  |  July 6, 2009 at 12:15 pm

    i love that you mentioned sean low…he has such an insightful blog…love this post!

    Reply
  • 2. elizatruitt  |  July 6, 2009 at 1:28 pm

    Great post! I’d love a whole post on biz consultants and coaches…

    Reply
  • […] you stop fearing what you are doing is probably the minute you’ve stopped taking risks and stopped growing your business.  Being a business owner is like riding a roller-coaster.  It’s scary but thrilling, so we […]

    Reply
  • 4. Event Girl  |  July 10, 2009 at 11:55 am

    This is great info – seeking a coach or mentor is just plain smart. Sometimes you need to get out of your own way, so others can show you a new path + perspective.

    Reply

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