Why Do Businesses Plateau and Decline?

Why do business plateau

We grow businesses through making decisions and taking action.

When we make decisions, it can then take between 1 minute to 5 years plus for that decision to be acted on and realised.  The same goes for business in a plateau - a result of previous decisions reaching their limit and the absence of new decisions and new actions.

Many businesses plateau as a result of not making the next decision as they don't know what decision to make. In other words, they have reached their capability limit when it comes to their business strategy.

It becomes more complicated when you are in a partnership or management team that is out of alignment as to what the next decision needs to be. The conversation can become an argument about 'What' to do rather than a discussion about 'How' to achieve. What decisions are about Strategy; How decisions are about Implementation.

The key to solving this problem is to have your destination defined and the roadmap pre-determined. When this is aligned, decisions and actions happen with high energy.  Sometimes an incorrect decision or a decision out of sequence is made, but if the destination is clear, then corrective measures are easy.

The destination can be mapped these days by businesses understanding how the valuation of business works. Shirlaws Group represents the business valuation formula as Valuation =  Profit x Multiple (V = P x M).  Most people know what profit is, fewer know how the multiple works.

The multiple is the assets that are usually intangible in business: the culture and talent that you attract and retain; innovation systems and your product, brand and channel extensions. These become assets when built the right way. They add significant value to a business during the journey as well as when it comes time to sell and exit.

Once the destination is clear, then the roadmap can be built and agreed.
There is evidence to show how to create a clear roadmap that takes out the guess work.  Evidence-based decisions create alignment amongst even the most risk adverse business owners.

You can find out more about the numbers and sequence of strategy at http://www.shirlawsgroup.com/About-us/Jump

Every day we make decisions.  My challenge to all business owners is to become aware of if the decisions have reached their limit.


Tim Dwyer is a business growth expert, who specialises in helping businesses strategically grow their assets, increase their business value, and improve their capabilities. Tim would welcome the opportunity to share more with you about Growth Metrics for business. You can contact Tim, and read more of his business insights and advice via his profile and learn more about Growth Metrics here.

Connect with Tim on LinkedIn here.