Have you wondered why you are not making the progress that you thought you ought to be making by now? It doesn’t matter how much harder your work, how many more hours you put in or what money you throw at your marketing, there comes a point where your growth gets stuck.
It happens to every business; it’s not just you!
There is a misconception that business growth has two stages; launch and grow. You successfully launch a new business or product, and then set on growing your business by finding more clients to increase your revenue.
But over time, the growth phase slows down; you start to plateau.
For some, you may have two or three high revenue months. But the months between aren’t and this is where the infamous feast and famine roller coaster starts to kick in, and you don’t seem to manage to get the growth that you had in previous years.
It doesn’t matter what you do or what new marketing initiative you put into place, when you look back on your financial accounts over the past few years, your business has bumped along at the same revenue.
Why?
When you are selling your time and/or expertise, you will eventually run out of capacity or energy. Or worse, you run out of both at the same time and you get on the fast track to burn out as you can’t keep up the delivery of what you are selling.
The Shirlaws Group carried out some fascinating research several years ago. They interviewed more than 700 businesses to discover that there are predictable ‘black holes’; key turnover figures where businesses get stuck because they don’t see where they have to shift strategies to get through them.
When I started to apply this ‘black hole’ research to the businesses that I’ve been working with over the past years, I began to see the same patterns at lower turnover figures.
You get stuck because you aren’t switching up your strategy to reflect the next level of growth.
Essentially, what got you here, won’t get you there.
Here are the three ceiling incomes your business will predictably get stuck at, and what you can do to shift your thinking and strategy to move through each one.
The Freelancer Ceiling – £45K
At around £4K monthly sales, there’s a very good chance you get stuck under The Freelancer Ceiling. You are selling your time either by the hour or have created a number of low priced courses or programmes.
Even though you may be getting recommendations through word of mouth, you haven’t worked out your marketing well enough to have a consistent flow of new clients, and you start each month wondering where your money is going to come from. Although you are working hard to keep your spirits up, you are running out of marketing ideas and energy.
To move beyond the Freelancer Ceiling you have to shift out of Freelancer Mindset, and start adopting a Business Owner Mindset. It’s time to change up your thinking, strategy and evaluate how good your services and products are, how well you are communicating that to your potential audience, and shift your client working relationship to be one of partnership.
You have to start outsourcing the stuff that is frankly below your pay grade; it’s time to release tasks such as diary management, proposal writing, invoicing and client onboarding. So if you haven’t hired your first admin support or virtual assistant, now is the time to do so.
It’s also time to evaluate the boundaries you’ve set with your clients to ensure you aren’t over-delivering or under-charging (often both!).
And finally, you want to be able to free up some of your time to develop your intellectual capital, such as your process and framework of working with clients, marketing collateral, such as brochures and videos, and credibility proof, such as case studies and keynote speaking.
This may sound like a lot, but over a course of a year, you will surprise yourself how much you can get done with the right plan in place. And all this will give you the strong foundations for your next growth phase, and help you get off the busy, always-be-marketing hamster wheel.
The VAT Ceiling – £80K
The next plateau happens at around £80K; the revenue that all businesses need to register for VAT. If you’ve already registered your business for VAT when you first started, then you may not get stuck here for long. But for those of you who have waited to register your business until now, then I’m afraid the mental block can hit you hard.
On one hand, this is simple compliance. Your business has been deemed to be contributing to the economy so it’s time to charge Value Added Tax; a phase that ought to be celebrated by all.
However, the emotional head games begin and you start to worry about having to increase your prices by 20%, especially if you are selling to consumers rather than other VAT registered businesses. I got myself stuck under this ceiling for more than three years before I finally took the plunge and got registered for VAT. A painless process in the end and funnily enough my business revenue went happily up once I had removed the self-imposed ceiling to my business growth.
But moving past this ceiling is much more than just registering yourself for VAT. If you’ve done the work as above to establish yourself in the marketplace, you’ve hopefully created a good suite of offers that sell well, your marketing is working and you are starting to have regular periods of £10K months.
To increase your revenue further into a 6 figure business, your Business Owner Mindset needs to shift into CEO Mindset; it’s not just about marketing yourself harder but developing a longer term game plan and being more strategic about what you want out of your business.
If you don’t realise this, you become the bottleneck. This phase of your business growth needs you to shift your focus from marketing, selling and delivering, to putting in the right process, systems and people in place to support your growth.
It’s time to start putting your energy into HOW your business is run; what and who is needed to support your growth. You need to ask yourself whether you’ve got the right business model in place to scale up and whether your branding – your positioning, website and social profiles – are reflecting the business you are becoming. And you have to be sure you are working with the right partners and hiring the right people for your future success, rather than what you need help with today.
The Capacity Ceiling – £200K
As you sell more and your revenue creeps up to the £200K mark, there comes a point that whatever it is you are selling, you’re running out of capacity; time and energy.
Trainers, coaches and consultants can comfortably sell £150K to £250K worth of services and programmes with a small support team. But the bigger the contracts or the more programmes you sell, the less of you there is to go round your clients. The dynamics of your working relationship starts to change and there’s every chance you are feeling stretched, and your clients don’t feel they are getting the value that they may once had when you were a smaller business.
Your business starts to feel like project management hell, you begin to drop some balls and you don’t get the chance to catch your breath or take the time out to work on your own development.
You start forgetting about the importance of your CEO Mindset and spending time working on the projects to support your business structure and processes, and you become a busy freelancer again, simply at a higher revenue.
If you want to grow beyond this point, then this is the phase where you stop treating your business as something you do, and start getting clear about who you want to become; the role you want to play, the impact you want to make and your bigger vision.
Do you want to keep things simple and decide that you like what you do but you want to work less hours and reduce your stress; increase your profitability and still have Fridays off and longer holidays?
Do you have ambitions to grow a team so that you pull back on the actual delivery to either outsource the work or recruit associates; to run an agency or consultancy that you may want to sell one day?
This is the time for you to switch your business model to a well-oiled exclusive boutique business with a waiting list, a scalable digital or training model, or create a team of mini-mes; associates, licenced practitioners, franchisers or employed consultants.
It’s worth bearing in mind that a good business growth strategy doesn’t come in one size fits all, hence why you have to adopt a CEO Mindset and start spending time working on yourself, not just on the business. It’s important to dig deep into what it is you REALLY want out of your business and life, make decisions on where to focus your time and energy, and re-evaluate who you hang out with as you move up a league in your development.
So, it’s really not your fault that your business may be plateauing; you couldn’t be working harder than you are already. But hopefully now you may see what shifts in your thinking and strategy need to take place at different revenues.
If you want to dive deeper into this, then I highly recommend you join me for my next Ignite event where we spend the day together working on where you are in your growth journey and what shifts you need to take to make your onward journey a success.
Thank you for reading. Until next time, do less, be more, play bigger.
