Breaking Through Plateaus: Overcoming Growth Challenges for Startups
Having a startup can be exciting, as well as a challenge. With the rise of entrepreneurs, many ambitious companies make their creative, innovative ideas a reality. But the journey of a startup isn’t always smooth sailing, with the everpresent challenge of hitting the ‘growth plateau’.
Growing, or sustaining, a business requires all of a business’s departments, creative strategies, and most importantly, their people. In this article, we’ll explore simple solutions for trying to break growth plateaus for startups and how to keep your startup dreams alive.
Identifying Plateaus
Before you can overcome a growth plateau, you must first identify one. Plateaus may come from challenging periods in business such as:
● Reaching the end of a product lifecycle cycle
● A lagging product shelf life
● Slow market expansion
● Operational inefficiencies
Unfortunately, the traditional bellwether of growth—customer numbers and revenue—may not exist for some startups given the fledgling stage of their operations.
Fortunately, there are still other metrics that can be used as indicators of plateaus such as:
● Monthly active users
● Website or app usage
● Engagement or activity
● Customer referrals
● Departments or teams not meeting goals
By recognizing these metrics and their corresponding trends, your startup can stand a better chance of reaching and even sustaining the next stage of growth.
Making the Right Investments
Reaching the next stage of success for a business often requires strategic investments in operations, people, and technology. When fast growth is needed, a well-thought-out financial strategy is a must.
Here are some investment strategies that startups should consider when trying to break through growth plateaus:
-
Marketing: Investing in marketing initiatives involves your company’s capacity to reach a wider audience, generate leads and close sales. Investing in marketing involves budget allocations for advertising campaigns and personnel costs (e.g. marketing professionals to provide insights or run campaigns).
-
Sales: An efficient sales team is the key to growing a startup. Consider hiring professionals with experience selling services, products, and solutions.
-
Product: Investing in product innovation and improvements helps startups become competitive in their respective market. Used as a tool for growth, product investments could include new feature developments, additional customer support resources, and more.
Making sure to dedicate a percentage of your total budget to investments is one way of progressively growing your business in an effective manner.
ReMinders for Growing a Business
It isn’t enough to merely fund a startup’s operations. The culture and the teams of the business must understand why the company exists and what their core objectives are. Hiring professionals who share the values, vision, and goals of the company is a great start.
To ensure that a team’s productivity is consistent, here are some reminders that entrepreneurs/managers should keep in mind while leading their growing businesses:
-
Create a Sustainable Road Map: Plot out short and long-term goals that reflect the long-term view of the business.
-
Macro Trend Awareness: Understand what trends are affecting the industry and position the business in a way that leverages those trends.
-
Client Acquisition: Businesses shouldn’t be dependent on a single client or customer base. Utilise different strategies to acquire new customers while servicing existing ones.
-
Stay Agile: Remain open to pivoting and adjusting operations and strategies, especially when faced with a plateau in growth.
-
Experiment: Distribute small amounts of a budget to test and experiment with potential growth strategies.
-
Review Regularly: Take the time to review progress, adjust resources/budgets, and reassess as necessary.
By implementing these reminders, startup teams’ efforts become focused and aligned towards the common objectives to break out of the plateau, surpass established goals, and reach the next level.
Reflect and Measure Twice
In the world of startups, fast-paced decisions and responses are needed to have a competitive and cutting edge advantage over other businesses. However, the decision-making process and responses need to be balanced with structured thinking and planning.
Reflecting on which strategies should be pursued and measuring progress can help your startup take the next growth step.
When breaking through a plateau, it is best to review strategies through a frequency of analysis and tests, rather than making guess-timated decisions that might weaken a company’s competitive advantage.
The following steps suggests intervals for analyzing and making adjustments to the strategies:
● Weekly: Monitoring KPIs (Key Performance Indicators) such as leads, website traffic, trends and customer behavior
● Monthly: Review of the budget allocations and resource utilization
● Quarterly: Evaluation of customer feedback and customer survey results
● Yearly: Target setting and goal readjustment
By investing in quality data science, team training, and analyzing strategies, startups can better understand how to get ahead of their competition, break out of their plateau, and reach the next level of awareness and growth.
Successful Bounce-Backs
Staying flexible and agile are keys to taking small corrective measures and bouncing back from challenges due to hitting the plateau.
Company leaders should remember to evaluate the changed environment, assess their strengths and weaknesses, and understand their market position.
Startup teams should also look towards successful bounce-back strategies from the “big guys”. Here are a couple of big-name success stories that built their way back from the growth plateau:
-
Huawei: The Chinese technology firm was facing a US trade ban that slowed growth. Within a year, the company invested heavily in 5G networks and mobile devices, returning to its leadership position.
-
Tesla: With coronavirus driving down demand, Tesla invested in cost reductions and revenue-driving initiatives that enabled the electric-vehicle maker to continue to receive profits throughout 2020 despite the challenges.
Building a startup at times can be difficult, but the successes are what makes it all worth it.
Keep the Dream Alive
Having a vision and dream of success is what drives entrepreneurs to push through the wall of a growth plateau. It is important to remember that the journey of a startup isn’t free of bumps, but with the dedication and focus, businesses will find a way.
From forming an agile team to understanding the right investments, startups should keep the tips in this article for breaking through plateaus and keeping their dreams alive. Keep going, and continue the journey to smart, iterative growth.
