It’s normal for the growth of a small business to be torpsy turvy. In as much as you eye stability this should not cause you great concern, as long as your prospects remain positive.
Danger comes when your business hits a growth plateau. Basically, your business stops growing way too early. Every entrepreneur arrives at this moment. You may find yourself losing your passion and facing a big drop in confidence. This loop of negative energy will only continue your entrapment in the growth plateau.
It can happen that the stagnation is caused by your doing through complacency or mismanagement. You can become so successful that nobody should question you. Your over-confidence then blinds you. Someone said that once you become that individual who knows everything, it’s time to move onto something else.
A business growth plateau can also happen because of external factors. Competitors and general changes in your industry can overwhelm you.
Note, growth does not necessarily mean going from a stall in the Nairobi CBD to becoming Safaricom. You can remain small in size, relatively. It simply means dominating your market segment. The best kind of economy is one dominated by mid-sized enterprises. I don’t know how interested our Government is in this.
Germany has the Mittelstand model, which is almost too idealistic to be real. Imagine an economy completely dominated by export-oriented SMEs based in small towns with highly specialized operations and train young people through apprenticeship rather than internship.
All the same, we realize that sometimes small businesses in Kenya are prevented from pursuing growth due to lack of capital. For instance, money is crucial in getting highly-skilled employees.
So, what options do you have when your business stops growing:
You work hard. Fatigue can take a way your sense of wonder and your entrepreneurial spirit. This will make it difficult for you to spot opportunities or have the patience to assess your business over and again. Why not bring an outsider to do these things for you? Yes, consultancy is expensive but a justified price to get your business rolling again. You can eye researchers and their data or individuals experienced with your line of work.
Complacency. You may end up too satisfied with how things are going. The same way we accept looting of public coffers. You will regret it because new entrants copying your model or bringing an improvement will eat into your market share. Both products and services can be improved – labelling, packaging, handling, delivery, etc. By choosing to be in constant improvement, you will also motivate your expanding team since they get to contribute to innovation.
Sometimes the only thing you can do against a growth plateau is refresh yourself. This doesn’t mean going to a spa or chilling in the sun – not a bad idea though. You can target a new niche or market segment. In Kenya, entrepreneurs often choose to expand horizontally by getting into new ranges of products or services. You can do that. You can also do it vertically to control your supply chain. The point is to have mid or long term growth again.
You have achieved success in business but are simply not going forward, anymore. It can be because your management style or experience is not suitable for the next step to be taken. Don’t hate me, but you should consider giving up control of your business. This is because something as simple as a new perspective may be needed or you may be getting in the way of your new team of professionals. Take a break and focus on strategy.
If financial institutions continue telling you no over that loan you need, that’s bad. You can take the path that most businesses that grow into big players opt for – investment. You can focus on attracting a new investor, at the cost of giving up stake and some control to push your business forward again. You can also invest in the little things that bring about business growth such as up-skilling yourself and your team by undergoing training.
It’s both sad and funny how when executives mismanage a big business they “restructure” by sending home the employees who did what they were told. This shows how much gain there is in changing your business systems early in the day. One thing you should monitor is whether your business is normalizing the silly bureaucratic approach, we’re in the 2020s fam. Other areas of change include adoption of technology and outsourcing.
When all else fails you must go back to the root of your problem. You have to consider either updating or drawing up a new business plan. New opportunities may have come up since you last did it or trends may have completely changed. This means your initial intentions end up not fitting in the world right now. You would have to set a new direction and new goals to achieve.