Has Your Impact Business Hit a Growth Plateau? Here’s What You Can Do to Move Past It
Looking for the most effective way to deal with a growth plateau in your impact-driven business? Take a closer look at why growth plateaus happen – and how changing your perspective can lead to positive transformation.
Every impact business has its ups and downs – and the path to business success is no exception. As an impact-driven entrepreneur or leader, you've likely experienced the exhilarating highs of growth and progress. Along with these, you might have also experienced periods of uncertainty where your business seems to tip and face challenges.
And, in between the triumphs and the setbacks, it's also common to encounter periods when your business seems to hit a plateau – a point where growth stalls and progress slows.
Before we dig into overcoming this challenge, it’s important to understand that a growth plateau isn't a sudden, catastrophic event that catches you off guard. Instead, it's a gradual shift in the landscape of your business.
Signs of a growth plateau can manifest in various ways, including:
Your once-soaring revenue growth has leveled off.
Acquiring new customers has become increasingly difficult.
Your business is struggling to introduce new products or services.
Your audience or community isn’t enthusiastically engaging or growing in volume.
Your team feels demotivated due to a lack of visible progress.
Not only that, but typical challenges that come with a growth plateau also include uncertainty about the next steps, frustration at the lack of progress, and the need to reevaluate your business strategy.
And while these signs and challenges can be disconcerting, there's also good news: a growth plateau isn’t a sign of failure. It's a natural part of your impact business's evolution, an opportunity for renewal, and a chance to update your approach.
The biggest challenges that lead to a growth plateau
Understanding the biggest challenges leading to a growth plateau is crucial to identify the root causes and pave the way for solutions - you can’t fix what you don’t understand!
As we mentioned earlier, a growth plateau isn't a standalone issue that just happens out of the blue – it can happen due to a variety of reasons, both internal and external, that ultimately impact a business's ability to thrive and progress.
Let’s take a closer look at some reasons why growth plateaus happen – even when you’re “doing everything right” in your impact business:
1. Funding challenges
One of the most significant challenges that impact businesses and startups face during a growth plateau is funding readiness and attracting the right investors, clients, or funders. Securing funding – both before and during a plateau – can be incredibly difficult and taxing.
In most cases, this happens because investors or funders are cautious about investing in impact businesses that haven't demonstrated consistent impact or revenue results. As a result, this cautious approach typically results in financial constraints that hinder progress.
2. Misunderstandings regarding tangible results
Another common issue is the misunderstanding regarding tangible results. For example, some impact businesses struggle to communicate their value to investors, which creates misunderstandings around the ‘results’ impact founders are looking to achieve and what investors expect. This often happens when impact founders don’t have a clear communication strategy, leading to a disconnect between the true value they bring and what ‘tangible results’ are being measured.
Without a well-defined strategy, some impact businesses may find themselves stuck in a loop of friction - measuring results that don’t coincide with the impact they want to make.
3. Issues attracting investors
Finding investors or funders as an impact start-up and/or nonprofit requires a different approach to funding and venture capital strategies. While a ‘traditional business’ has one goal, increasing profits, your impact start-up has a different set of goals.
Communicating the impact goals and true value of your impact business to investors can be a leading cause of hitting a growth plateau.
Unfortunately, a lot of impact businesses simply fail to stand out and secure investment from key players due to a lack of differentiation - not saying that your business isn’t unique, it is that communicating that unique value is difficult!
4. Volatile markets
Lastly, volatile markets add another layer of complexity. Market volatility and economic uncertainties can affect the ability to attract impact investors significantly due to the increased risks involved – including the potential for financial losses and uncertain returns on investment.
Because of this, certain investors might prefer to be a little more cautious during uncertain times – unwilling to risk themselves on an uncertain market – especially in the nonprofit sector, where results are challenging to guarantee.
What’s the real reason for your growth plateau?
Spoiler alert: the real reason for your growth plateau is failure to communicate your business value.
Even though your products or services might be exceptional, and even when your team is passionate and dedicated, some impact business founders and leaders often struggle when it comes to conveying the true value of their business to the external world.
But why do these difficulties happen? Here are a few reasons that might explain the challenge:
1. Issues identifying the unique value proposition
Many impact businesses face challenges in articulating what makes them unique in the market.
Why? Without a clear understanding of your unique value proposition, it’s nearly impossible for you to find ways to differentiate yourself from competitors! This, in turn, means that you find it difficult to attract the right audience. After all, if you can’t see why customers or community members should choose you over the alternative… how are potential customers or clients meant to see that?
At the end of the day, effective communication is crucial for engaging potential clients and driving growth.
2. Lack of a strategic process to define specific business goals
In some cases, impact businesses lack a well-defined strategic process for setting specific goals. As a result, your efforts become disjointed and lack a unified direction. Without clear objectives and a strategic roadmap, most of your effort feels scattered.
This lack of strategic alignment can lead to stagnation – aka, a growth plateau – where your impact business remains in a state of uncertainty and fails to make progress.
3. Uncertainty about your target audience
Uncertainty regarding the target audience is another common obstacle for certain impact-based startups and businesses.
A common mistake I see is when impact business owners and founders are unsure about who their ideal customers are, they’ll often adopt a broad marketing approach - trying to appeal to everyone and bring in as ‘many users/community members/clients’ as possible.
Unfortunately, this just doesn’t work effectively. This scattered approach can quickly backfire as it fails to capture the right leads and disperses much of your energy and focus.
4. Inability to see your business’ growth potential
Some impact business owners and leaders are so deeply immersed in day-to-day operations that they lose sight of the bigger picture. And hey, I get it, when you’re deep in the thick of your work - it can be difficult to remove yourself to bring in an objective perspective.
This tunnel vision, however, can prevent you from recognizing the full growth potential of your business and may lead you to underestimate how far your business has come. On the other hand, it may cause you to also fail to envision how far your business can go (you’d be surprised how common the latter is).
Put simply, a lack of strategic perspective limits your ability to set ambitious goals and pursue them with confidence.
5. Leveraging the wrong assets
Rather than capitalizing on your strengths, some impact businesses devote excessive resources to areas where they lack expertise, resources, or competitive advantage.
It’s precisely this misallocation of resources that then diverts valuable efforts away from areas where you could excel and generate meaningful progress – think marketing, research and development, and customer engagement. As such, focusing on the wrong assets can hinder growth and limit your business's ability to leverage its true potential.
6. Trapped in a cycle of assumptions and ideas
Impact businesses can often find themselves trapped in a cycle of assumptions and ideas that hinder progress – especially when this prevents you from taking action. Additionally, constantly second-guessing decisions and lacking clarity only serve to prevent you from moving forward.
When you break free from this cycle, with a clear strategy and plan, it gives you the space to embrace new strategies, experiment with innovative ideas, and move forward step by step (without feeling like you need to know the entire plan from the beginning). Breaking free from this cycle of assumptions and ideas gives you back the headspace to make decisions quickly, trust your decisions, and move forward and correct course where necessary - vital for overcoming a growth plateau and achieving success!
How FairForce works with impact businesses to move past a growth plateau
At FairForce, we don't view a growth plateau as a roadblock – we see it as an opportunity for transformation.
Through a combination of personalized strategy and business coaching tailored to social impact founders, FairForce can come in as a strategic partner to help impact businesses:
1. Customize solutions: We understand that there's no one-size-fits-all approach to overcoming a growth plateau. Instead, we emphasize customization and collaboration. Our tailored approach helps impact businesses address their specific challenges and seize growth opportunities effectively.
2. Unlock your potential: We work closely with impact businesses to identify the right strategies, audience, and assets to leverage for maximum impact. Our goal is to help you unlock your full potential and break free from the constraints holding you back.
3. Embrace strategic thinking: We encourage impact founders to adopt a strategic mindset, emphasizing that strategy work is an ongoing process. By embracing strategic thinking, you can navigate challenges, adapt to changing landscapes, and continuously evolve to achieve your growth goals.
Whether you're facing challenges related to funding or struggling to communicate your business value, with FairForce as your strategic partner, you'll have the support and guidance you need to move past a growth plateau and embark on a journey of transformation that can unlock new possibilities for your business.
Overcoming a growth plateau means changing your perspective
When it comes to running an impact start-up and driving social change, you may encounter unique challenges that come with the territory. One of these is the dreaded growth plateau.
However, this doesn’t mean it’s the end of the road.
After all, growth plateaus aren’t necessarily a sign of failure, but more so an invitation to change your perspective and find ways to adapt to new circumstances.
Despite what you might think or feel, growth plateaus aren’t something that just happens overnight or because of random chance.
There are actually a variety of factors behind them, including:
1. Funding challenges
2. Misunderstandings regarding tangible results
3. Issues attracting investors
4. Volatile markets
Most importantly, though, growth plateaus happen because business owners and founders struggle to communicate their business value. And it’s precisely this communication gap that hinders progress – and even causes frustration.
Ready to transform your perspective and have a clear communication strategy to attract investors and clients? Schedule a Discovery Call with our CEO and Founder, Margherita, to learn more about how business owners and leaders like you can embrace this setback as an opportunity for positive change.