Overcoming Business Growth Plateaus

Overcoming business growth plateaus

Ian Richardson, Managing Partner, Richardson & Richardson Consulting LLC

What is a business growth plateau?

Business growth is rarely smooth. Looking at the financial history of each organization I’ve been involved with, I’ve noticed a pattern. Universally as those organizations mature and expand, they hit stagnation points. These “business growth plateaus” are exactly as they sound – it’s a plateau, or relatively flat segment, where the company experiences little to no growth.

Growing a business is hard work, anyone who says otherwise is trying to sell you something. Sometimes you get magical golden geese dropped into your lap – big opportunities or contracts that you’re referred into that cause some explosive growth in an organization. That extra 50K, 100K, 500K, or 1MM dollars of revenue really can supercharge all areas of the business. In my experience, that revenue almost always turns out to have a bit of gasoline in it as well – meaning that it can supercharge a smoldering fire that was burning in one or more areas of the organization into an out-of-control wildfire.

This article will explore a few of the common types of growth plateaus, as well as give a list of 5 tips that can be useful when you’re crafting a strategy around overcoming business growth plateaus.

Common types of business growth plateaus

There a few commonly experienced business growth plateaus that span multiple industries:

$1MM Annual Revenue: The first large plateau experienced is usually around the growth to $1MM in annual receipts or revenue to the business. A few key things start occurring at this point in a businesses journey.

  • The entrepreneur or entrepreneurs who started the business are starting to experience the stress of “doing too many things” or “wearing too many hats” – Delegation of tasks starts to become mandatory.
  • There starts to become tension in the business between two groups of clients – The original base of clients who came into the organization “early on” and may have a different scope of work of services, product lines, and pricing models vs. “new logos” that are on a more standardized offering schedule with up-to-date pricing.
  • Administration expenses start to rise for the organization: HR, benefits, pay scale adjustments, and continual education all become more significant line items on the P&L, and require attention and care.

$1MM-3MM Annual Revenue: My friend Walter Crosby, from Helix Sales Development, loves to refer to this plateau as “The Badlands.” The description is apt and broken down below.

  • Referrals and networking no longer support the growth of the organization. The Entrepreneur’s network has been tapped, and due to the number of tasks and resources needing attention, referral-based business development no longer can sufficiently provide enough leads for the organization to continue growing.
  • Churn in the client base starts to occur – this normally stems from old pricing models that start to be adjusted, sometimes drastically, to try to get legacy accounts in line with current costs and profit margins, as well as due to competition and service delivery struggles.
  • Process becomes mandatory – missteps, avoidable mistakes, and inconsistencies drive the organization to start focusing on standardization and predictable outcomes.
  • The organization starts to promote, hire, or acquire leaders to support the entrepreneur at the top.

3-10MM Annual Revenue: After emerging from the badlands, the organization starts to predictably grow, until it reaches close to the 10MM in revenue mark. Breaking past the 10MM revenue space usually begins to require a new mixture of both organic growth alongside non-organic (acquisitions) growth. A few key indicators occur here:

  • Leadership becomes a key focal point. The Entrepreneur and leadership team focus on elimination of single points of reliance across the organization.
  • Processes become built at the department level, and standardization becomes a measurable KPI.
  • The entrepreneur should be out of most, if not all, daily “roles.” Rarely should the entrepreneur be doing sales, account management, service delivery, or other tasks. Vision and mission become key focuses for the C-Suite.
  • Outside investment starts becoming a focal point for continued growth and operational finance.


5 tips around overcoming business growth plateaus

Over the years, I’ve found a few formulas that help kickstart the growth needed to “break” the ceiling of the business growth plateaus we’ve been exploring. I have those listed below for your reference.

  1. Use your mission, vision, and values as a filter: If something is not in alignment with your company core values, does not match up with your mission statement, and does not help your organization move closer to your vision (regardless of timeline), then you should seriously consider if you should be doing that action.
  2. Communicate often to the whole organization: Just because the entrepreneur or leadership team knows, believes, or has awareness of an item doesn’t mean the rest of the company will see it the same way. Communicate your strategy, as well as progress towards your vision, early and often.
  3. Focus on what your customer’s value: Invariably business relationships fail – no company stays static. The changes and developments you and your customers experience can naturally create rifts in the relationship. What used to be a good fit can suddenly feel uncomfortable. Making sure you have a clear understanding of what you CUSTOMER’S find valuable about their relationship with you can mitigate unnecessary churn.
  4. Focus on culture: A healthy culture promotes a happy and engaged team. Everything works better when everyone is moving in the same direction.
  5. Hold people accountable: Lack of accountability and execution will hamper growth better than anything else. Keep an eye on accountability as your organization grows to ensure that things don’t get out of hand.

Final Thoughts

There’s no silver bullet or magic pill you can use to get past a business growth plateau. It’s nothing but hard work and determination that will see you through these phases. While you cannot outsource the execution and accountability needed to achieve results, you don’t necessarily have to do this alone.

If you’re struggling to break through the next business plateau Richardson & Richardson can help. Check out our case studies for stories of organizations that we’ve assisted with similar issues and download our white papers for deep dives on tools you can use in your organization. If you’re wondering where to start, book a complimentary session with one of the Richardsons today to come up with a plan on how to move forward.



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