BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

Three Strategies To Reboot Your Business When You Hit A Plateau

This article is more than 7 years old.

Unsplash

Whether your company is a startup that has experienced some success or an established company, one thing is nearly certain: at some point your business is likely to hit a plateau. The startup world is filled with tales of companies that launched successfully but couldn’t build long-term, sustainable growth. Think Webvan, Friendster, and other famous startup implosions of the early 2000s.

But plateaus aren’t just for startups; they can stop the growth of established businesses as well. There are many reasons why plateaus show up, whether it’s stagnating sales, hitting production capacity, inadequate responses to changes in your market or new rules for digital marketing. The question is, when your growth levels off, what does it take to push to new levels of expansion? Here are three answers that have worked for other entrepreneurs.

1. Rethink your business model

As you well know, the one constant in life is change. One of the latest changes rocking the business world is web-enabled disintermediation. As more customers shop online, standard wholesale/retail relationships of the past are being replaced by direct-to-consumer business models. These changes are causing many companies to rethink their B2B strategies, skipping the middleman in the process.

Luxury shoemaker AceMarks is one company that successfully solved this dilemma. The startup began as the brainchild of Paul Farago, a shoe industry scion, and his business partners. Their goal was to put handcrafted Italian shoes on the feet of more men at an affordable price. The team initially thought AceMarks would be working within the traditional wholesale/retail model, but found that channel to be too costly, even though it was the established way of getting product to market in their industry.

Says Farago, “We knew that we could harness technology to make our product more attainable to more men who appreciate fine Italian craftsmanship, but who are put off by the high price of most luxury brands. So we moved our men’s line away from wholesale, and we went direct to consumers.” The strategy worked, and more traditional apparel companies are making the shift daily.

2. Address capacity issues

Another reason many companies hit a plateau is the lack of ability to accommodate growth. More sales than you can handle is a problem many entrepreneurs would like to tackle, but if your warehouse or logistics infrastructure are at capacity, your manufacturing facility can’t put out enough units per month, or staffing and technology have become limiting factors, then the challenges of growth can become disastrous.

In cases like this, you’ll need to find new ways to support growth and cost-effectively address capacity issues. Fortunately, outsourcing is helping many companies overcome these hurdles. In fact, according to Deloitte and Touche, 47% of companies that outsource do so to solve capacity issues. For instance, if staffing is an issue, outsourcing some of your workload to a firm that specializes in the type of labor you lack can help increase capacity without the cost of hiring full time, permanent employees. Finding a freelancer on a platform like Upwork is another option.

Logistics needs can be outsourced to companies like Coyote Logistics that provide the technology and human resources to manage excess capacity. Even manufacturing and warehouse space requirements can be outsourced to enable growth. If technology investment is holding you back, there are solutions for that, too. Subscription-based cloud technology providers like Amazon Web Services, Google Cloud Platform and others can provide access to infrastructure and hardware, databases, server space and more—allowing your company to grow without making prohibitively high upfront technology investments.

3. Consider funding alternatives

Lack of capital is another common catastrophe for most companies in growth mode. In a previous article, I wrote about non-conventional funding sources that can help companies at various stages of their life cycle. One of those sources is crowdfunding, which has proven to be one of the most interesting and exciting funding sources available. As one example, when AceMarks decided to make the move to a direct-to-consumer model with its men’s shoes, it launched a unique campaign on Kickstarter that garnered recognition as the most funded shoe campaign in Kickstarter history.

Does crowdfunding really work? It did for AceMarks. In February 2016 the campaign brought in more than $500,000 in funding from over 2,000 backers. According to Farago, “We used Kickstarter as a way to engage with a community that we felt would strongly support our brand. Crowdfunding gave us access to capital that allowed us to grow and expand our capacity. It also provided the ability to develop relationships with thousands of enthusiasts who don’t just love our shoes; they are now invested in our success.”

Every company will plateau at some point. It takes creativity and a willingness to try what hasn’t been tried before to move beyond the plateau to the next level of success.

Follow me on TwitterCheck out my website