As a business owner, you know that running a business can be quite challenging. It takes a lot of hard work and dedication to keep things moving, but sometimes you notice that sales have plateaued and that your customer base is not expanding. If that is the case, then your business may be stagnating.
Many business owners do not want to acknowledge that their business is stagnating. They believe that generating the same revenue each year means that the business is doing well. However, if a business does not demonstrate long-term growth, it is stagnating. Even the endless cycles of hiring and firing employees are an indication that a business has not grown over time.
If your business is stuck in a rut and you want to kick-start its growth, the first and most crucial step is acknowledging that there is an issue. You then need to address these problem areas so that you can put your business back on track and begin the process of long-term and sustainable growth.
Understanding the importance of business growth
In a digitally connected world where borders have shrunk, a business needs to stay competitive. In any marketplace, be it online or offline, new entrants will always be joining the fray. These new businesses may offer newer products or fresher services that could make your business irrelevant. As a result, you could begin losing customers and profit. If this happens over a few months or years, you will have no other alternative but to shut down your business. According to the US Small Business Administration (SBA), around 7% to 9% of businesses in the US close every year.
If businesses do not adopt growth strategies, they will stagnate or their competition will outperform them, causing them to lose market share. This, in turn, will reduce revenue and profitability. In the worst-case scenario, the business will be forced to close down. Therefore, businesses should not only look for ways to stay relevant and ahead of their competition, but should also be able to recognize signs of stagnation.
Many business leaders and decision makers often look for ways to enhance their knowledge and skills to help their businesses achieve sustained growth and profitability. An executive Doctor of Business Administration (DBA), which is a degree for business leaders, enables executives to learn how to solve complex business-related problems through in-depth analysis and research. The executive DBA by Aston University prepares business leaders to tackle the issue of stagnation by first recognizing it and then addressing it through their comprehensive knowledge and expertise in economics, finance and marketing strategies.
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Signs of business slump and stagnation
Below are some warning signs that tell you that your business is not growing.
- Declining sales
One of the most obvious signs that your business is stagnating is a dip in your sales figure. Usually, the rut begins with revenue flatlining, and if you do not tackle it right away, your business will begin showing a reduction in sales.
If you see sales reducing rather than increasing, it is time to step back and reassess your business strategy. You may have to take drastic measures such as adjusting your pricing so that your products or services are more competitively priced, or changing your marketing strategies to attract more new customers. You may also have to change your product line in a bid to attract new customers or engage existing customers.
- Lack of repeat business
Businesses are built on returning customers. These customers are loyal to their preferred brands and value the products or services that the brands offer. If your customers are not coming back, it indicates that there is a problem.
According to Bain & Company, a management consulting firm headquartered in Boston, Massachusetts, if a business increases its customer retention by a mere 5%, it will notice a 75% increase in its profitability. This is a good reason to focus on retaining your existing customers while trying to acquire new ones. You can boost customer loyalty by improving your customer service, offering attractive loyalty programs, or engaging existing customers by introducing new products or services.
- Low employee morale
Your employees are the backbone of your business. Their work, productivity and morale are essential for your business to succeed. However, many business owners often focus more on the bottom line and forget about employee motivation. This can cause their business to stagnate.
If you notice that your employees are disengaged, you can offer incentives to meet their monthly or quarterly targets or even provide training to enhance their skills. Another way to motivate and boost productivity is by improving the work culture and ensuring that supervisors and managers are approachable. When employees stay motivated, their productivity increases and they tend to focus on the company’s goals.
- Unclear business vision
Most businesses have a clear vision when they start. They know their purpose and what they want to achieve. However, with time, the business changes and evolves and the old vision may no longer be relevant. Usually, as a business expands, it may not have clear goals and this can lead to stagnation.
If you feel that your business vision is causing your business to slump, it is time to go back to the drawing board and come up with a new and more relevant vision.
- Doing the same things
A constant introduction of new ideas propels a business forward. However, many business leaders are afraid to take a risk or try out new things. As a result, the business becomes stale and there is no novelty to retain or attract customers.
When your business keeps doing the same things and does not adopt new ideas, it is time to get your team together and begin a brainstorming session. Use this opportunity to come up with new ideas. You can also attend conferences, seminars and industry events to bring fresh perspectives to your business.
- Not celebrating achievements
When you first started your business, you most likely celebrated small achievements with your team. Now, as your business has grown, you are busy ensuring that things run smoothly. As a result, you do not take time to be with your team and celebrate achievements.
If you notice that you are no longer celebrating small achievements, it is a sign that your business is no longer thriving. It is time to change things and begin the celebrations so that you value your business more and also help your team realize that they are an integral part of the company.
- Customers are no longer your focal point
Do you remember how you used to focus on making your customers happy and meeting their expectations? Most business owners tend to go out of their way during the initial few years to ensure customer happiness and get positive reviews and feedback. However, as the business does well, they get complacent and focus just on making money.
Just like your employees, your customers are the reason for the success of your business. If you stop focusing on them and pay more attention to the bottom line, your business will not grow. On the contrary, it will stagnate and lose its direction. Get back to pleasing your customers and going above and beyond to make them happy. It will give your business a renewed sense of focus and enable it to grow and thrive once more.
How to help your business get out of a rut
Now that you know the warning signs that show that your business is stagnating, it is time to look at some of the ways that can help your business flourish and become more relevant in a competitive marketplace.
- Reassess your business strategy
The first step you should take to bring your company out of stagnation is to reassess your business strategy. As stated earlier, this could be taking another look at the pricing of your products or services, analyzing the sales to see which products are more popular, and determining why certain products are not selling, and also reworking your marketing strategy so that it is more focused and targets your audience.
When you find the weak areas, you will be able to create a plan to address them. This, in turn, will move your business forward and possibly even enable you to beat your competition.
- Position your business as a leader
When a business has credibility, new and existing customers are more likely to buy its products and services. So, figure out a few ways to build your credibility in the market. Writing guest posts, creating valuable content for your customers, and participating in conferences, podcasts and seminars are great ways to build credibility.
When you establish your business as a leader, you make it more credible. This will spur sales and help your company get out of the rut. You can reach your target audience and demonstrate to them that your business is a worthwhile investment.
- Engage your customers
Engaging your customers in a more meaningful manner will help your business become successful. There are numerous ways to boost customer engagement. Begin by improving your customer service. Listen to what your customers have to say about your service. Read feedback and reviews to find out where you are going wrong and take remedial measures.
You can also boost customer engagement through loyalty programs, interacting with them on social media platforms, and introducing new products and services to keep customers coming back for more. Remember, when customers feel that you value them and not their money, they will stick with you. So, make sure that when you begin marketing, you target the right demographics to get a high ROI.
- Motivate your employees
You can have the most brilliant business idea, but if you don’t have the right team to make that idea a reality, it will come to nothing. Therefore, make sure that you motivate your employees and let them take ownership by coming up with new ways to improve products, services and customer experience. When they come up with great ideas, reward them for their contributions.
How can you motivate your employees? Reward and recognize their achievements, make their work environment less stressful by offering them flexible working hours, invest in team building to boost camaraderie, and allow them to build skills through training and workshops. Ensure that your employees see themselves growing with the company – this means creating a succession plan for top performers.
- Come up with new ideas
Businesses get stale when they do not have new ideas. You can work with your team to brainstorm fresh ideas so that you stay more relevant in the current market scenario. You can also attend industry events and conferences. Encourage your team leaders and other decision makers to do the same.
Another way to give your company a new start is by collaborating with other businesses. You don’t have to partner with your competition. Instead, look for businesses that share the same values as your company and have some association with your industry. This will enable your business to expand its customer base, retain existing customers, and enter into new markets. You can also share resources and reduce your overheads, something that small and big businesses always want to accomplish.
- Opt for digital transformation
In a digitally connected world, no business can shy away from technology. If your business is not harnessing the power of modern technology, it is time to do so. Let go of legacy systems and outdated procedures and processes. Instead, invest in new digital platforms, hardware and software to streamline business processes.
When you adopt the right technologies, you will not only make your business processes more efficient and effective, but you will also improve customer experience. With the help of new technologies, you can reach out to customers at every stage of the sales cycle and use data to make informed business decisions.
Conclusion
There are so many different ways to bring your business out of a rut, and many of these tips can be implemented quite easily. Remember, your business should focus on creating a superior customer experience by offering them high-quality products and services. When you sell an experience, it has a higher value and customers will be willing to pay a premium for it. This, in turn, will ensure that your business always stays relevant and ahead of its competitors.