When a business is started without all the necessary precautions and plans put in place to ensure growth, the business is doomed to fail or become stagnant without any increase in its profit margin.
BUSINESS OUTCOME |
Option A : |
Investment >Profit = Failing Business (deficit) |
Option B : |
Investment = Profit= Stagnant Business |
|
Option C : |
Investment |
Causes of Stagnant Business
Some causes hindering the growth of a business are usually tracked as per the business aspects such as operations, sales or marketing.
Operations: A stagnant business could be caused as a result of operational issues; hence fixing these issues can put the business back on the rails. From an ops viewpoint one has to ask a couple of questions why the business isn’t growing with current resources:
Sales: After diagnostics, if stagnant growth isn’t because of operations, then it could either be because of sales or marketing. In order to determine if the cause of your stagnant growth is because of the sales of the product or service then investigate to see if sales goals are being met. Track sales numbers, max capacity, available resources for sales department or team, and establish whether the stagnation is because of sales.
Marketing:. If there is no issue with operations nor sales then the most likely cause could be marketing. Marketing and sales both aim at augmenting profitability. It is difficult to differentiate between these two concepts. Marketing brings together buyers and sellers via methodical planning, implementation and control of business activities whereas sales is a transaction between two parties where the buyer receives goods and services in exchange of a legal tender (money). Stagnant growth could be cause as a result of inadequate or inappropriate or insufficient marketing strategies, plans, and implementation techniques.
Getting Stagnant Businesses (Growth) on the Move Again
There are many reasons to why a business is stagnant and no longer growing. Most often the business owners are faced with this kind of dilemma at one point or another in the life cycle of a business. Sometimes the business owner doesn’t know how to react to this or how to keep the business moving again. To get stagnant businesses on the move again, the reasons for this “no growth” level must first be identified and secondly develop the right solution to this predicament.
1. Information gathering, sharing and implementation
2. Capacity building of managerial skills
3. Reinvesting into the business
4. Proper planning prevents poor performance
5. Personnel or staff training
There is a saying that helps in the optimisation of businesses and should be implemented by business owners that want to have a successful business; “employees should be trained so there can leave and be successful anywhere else and should be treated in a way that they want to stay”.