What to do when you’ve no growth and no profitability

Mar 29, 2011

In the last post I showed the most basic initial appraisal I make of every business I advise (whatever size it is). It’s not difficult to see which the most difficult quadrant is to be in:

low growth, low profits

 

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If yesterday’s analysis showed that this is where you are – and more particularly, that you’re not trending out of that quadrant into one of the others, then your business is in one of these five stages:

1. You don’t really have a business

Instead, you have what my friend Carol Roth calls a ‘jobbie’ – a cross between a job and a hobby that isn’t ever going to become a valid business. If you think that’s you, I seriously recommend getting hold of Carol’s superb book, The Entrepreneur Equation (not an affiliate link).

2. Your business is in Early Struggle

If you’re here, your goal is simple: find your profitable sustainable market that will propel you out of Early Struggle into Fun.

You’ll want to read chapters 2 and 3 of Predictable Success, and if you need detailed help in identifying and mining the profitable sustainable market for your business, no-one teaches this better than Michael Port (not an affiliate link).

3. Your business is in (late) Whitewater

When a previously fast-growing business in Fun hits Whitewater, profits and growth both begin to stall out. Although to the founder/owners and/or managers this feels like the business is in Death Rattle, it’s not as fatal as that (or doesn’t need to be, at any rate).

In Whitewater (see chapters 4 and 9 of Predictable Success) you’ve got to learn how to deliver consistent quality in the face of complexity in order to make it into Predictable Success.

4 Your business is in (late) The Big Rut

When a business hits The Big Rut management loses the ability to self-diagnose its problems, and as a result, eventually it loses touch with its market, leading to a loss of growth and profitability. This is different from being in Whitewater in that here, nobody cares anymore. It’s only a matter of time before you glide into the next stage:

5. Your business is in Death Rattle

Nothing much to say here. Unlike being in Whitewater, in Death Rattle your business really is dying – you’ve left your market behind – they don’t want you, and you no longer know who they are. I can’t help and no-one else can, either.