Crossing Growth Plateaus
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Tom Stimson
April 2, 2021

Post-pandemic Growth Requires Extraordinary Attention on Scalability

As the event industry emerges from the ashes that was 2020, it is hard to remember what rapid growth was like. Let me refresh your memory:

Right now you probably have just enough folks on staff to stay busy. Your business has down scaled, replacing a vibrant in-person model with a limited contact version. Ramping back up isn’t going to be easy, nor the same as it was before.

This is why some of your team is anxious about new sales activity. “How will we keep up? We can’t prevent mistakes with that much going on.”

Will this fear creep into sales? Or will sales overwhelm delivery? Do you anticipate demand and prepare, or wait for demand and react? If these questions sound familiar, it’s because this is how it felt being a startup. 

We Need to Make Time to “Sort Things Out”

You will remember that young firms become so busy managing sold business that they neglect to keep the pipeline full. Sometimes the challenge of meeting demand strains resources, and that also slows the sales process.

Then there are the mistakes!

In any case, the conditions of demand, capacity, and resources conspire at some point to slow or stop revenue growth until we can sort things out, which means creating more capacity by updating processes, re-staffing, and adding infrastructure.

life-of-business

In an ideal world, we hold sales at a consistent level until we add employees, infrastructure, and capital to prepare for the next growth spurt. Of course, that would mean profits dip while the team bulks up. Then new sales can deliver the expected profit. 

The stair step pattern of growth and profit is inefficient and therefore wasteful. The solution is to learn how to scale up more quickly. 

The Pattern Is Grow-Sort-Grow

Ideally we want to smooth out the stair step growth and have an elegant swooping curve, but first we need to master the scalable growth model. Companies that don’t master this skill will find themselves in a feast or famine revenue cycle with an operational model that is either over-built or underdeveloped for the current demand.

These companies feel alternatively too busy and too slow. There’s no time to find new business and no money to fix their capacity issues. 

We call them plateau companies: Always on the verge of a breakthrough year. But overall revenue remains flat except for the occasional windfall job.

Left unchecked, the plateau becomes stagnation, which leads to competing on price. Soon costs increase while profits dwindle. Even if the firm maintains sales, it loses ground. 

Management should anticipate these plateaus and proactively prepare the next round of added employees, processes, and tools to handle the higher level of business – while simultaneously feeding the sales engine. The goal is to minimize the amount of time spent on the plateau.

The Less Time It Takes to Sort, the Sooner You Can Get Back to Making Money

Companies that are inherently scalable have a process for process change, and they use those skills to adapt quickly to growing demand and hit the pause button when sales dip.

As small businesses become larger organizations, they can gradually reduce and all but eliminate the plateau period with aggressive planning and calculated risk-taking. This state of awareness and preparedness is what we often call scalability: the ability to add or reduce resources in step with demand. Scalable companies can expand and contract with revenue and therefore respond aggressively to growth opportunities.

Post-Pandemic Plateau Assessment

Self-Assessment: 1 = Never, 3 = Sometimes, 5 = Always

  1. My team is asking for more staff to handle upcoming work
  2. We fear making mistakes when we are busy
  3. We lose money in slow months
  4. It is difficult for outsiders to have key roles on jobs
  5. We are often so busy that we can’t plan what to do during downtime

Score yourself. Let’s just say a score of 25 is alarming. A score of 5 makes me wonder why you read this far.

Each diagnostic statement is the manifestation of multiple symptoms. For instance, Number 1: Over Anticipating Peak Periods is connected to sales forecasting, sales process, operational process, leadership, supply chain, and cash flow. 

There is no magic bullet. Small businesses have multiple levers for growth in sales, operations, and finance, but scalable growth comes from knowing which levers to move in what order. The adjustments are smaller than you expect and more numerous than you imagine. 

Note: This article was originally published in November 2018 and has been updated for accuracy.

About Tom Stimson
Tom Stimson MBA, CTS is an authority on business and strategy for small- to medium-sized companies. He is an expert on project-based selling and a thought leader for innovative business processes.
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