5 Early Warning Signs That Your Contracting Business is Approaching a Plateau

February 21, 2015
Category: Achieve Consistent Business Success,Business Tips,Define Your Vision and Plan

As your business grows past the million-dollar mark, the chances that you will hit a plateau at some point, probably around $1.5 – $2.5 million and again around $10 million, increase dramatically.

Plateaus usually happen because you’re reaching a new level in your business with new challenges and new success requirements, and you will need new strategies, different management skills and new organization structures to sustain future growth.

It’s important to recognize when you are entering a plateau phase, so that you can anticipate and prepare for the next level in your business. If you act quickly, you can shortcut the time you spend on the plateau and sometimes even blow past it completely. Here are five common early warning signs that your business may be entering a plateau phase, and if you don’t adapt, slower growth and lower profits may not be far behind:

1. Increased frequency of problems and fires

It’s natural that problems and fires will happen from time to time. But if their frequency has been increasing over time, pay attention. When the frequency of problems and fires start to rise noticeably, it may mean that your current business systems are stretched to the limit, and that a plateau may not be far.

2. Important things falling through the cracks

Missing deadlines? Not able to convert to all of the leads coming into the business or follow up on estimates? Not able to keep in touch with key clients or partners? When things start falling through the cracks in your business, it’s a clear warning sign that a plateau may be on the way. Even if your key managers and crews are doing great work and it’s just you missing deadlines, consider it a warning sign. When you are not setting a leadership example, it’s a slippery slope from there on.

3. Increased customer complaints

It’s wonderful when customers are calling to express gratitude—not so much when the only feedback you get is complaints. On one hand, customer complaints are good, because at least you know that something is wrong. On the other hand, when customers complain, especially publicly, this can hurt your business. If the frequency of customer complaints starts to rise, it may be a wakeup call, especially if you’re having more problems and fires and more things are slipping through the cracks!

4. Turning good business away because you just can’t handle it

When you have to turn away good business because you can’t handle any more work, It’s a clear sign that you’re entering a plateau. It means it’s time to expand. There are always risks and doubts involved in hiring new employees or adding more equipment. But the longer you delay this decision, the longer you will be stuck in a plateau, unable to move forward.

5. Working more but not getting anywhere

Do you come in in the morning with a list of important things that you want to accomplish and go home at the end of the day feeling stressed out and frustrated, because few (if any) of the things that you wanted to do actually got done? Rinse and repeat the next day, and the next, and the next…. Ugh! Have you stared to increase your working hours, just so that you can get everything done? This too is a sign that you need to upgrade your management skills and organization structure before your business hits a costly plateau.

What do you do if you’re experiencing these early warning signs in your business?

How many of the warning signs do you see in your business? When things start to get difficult in your business, your natural tendency is to hunker down and try to power through: come in early, go home late, do whatever it takes to turn things around. What I’d like to suggest instead, is that you pause and examine whether you might be hitting a plateau.

• Take stock of the foundation you’ve laid (your sales and marketing system, team management, service delivery, financial management and business leadership) to ensure that they are all sufficient to support your future growth.
• Talk to business owners who are at the next phase and examine how prepared you and your business are for the rigors of the next level.
• For more information on how to avoid the plateau, also see my blog articles How to Manage Your Business Like a Corporate CEO and Why Businesses Plateau: 2 Keys to More Consistent Growth and Profit.

If you heed the warning signs that I’ve laid out here and take prompt corrective action, I can almost guarantee that your stay on the plateau will be brief and you will propel your business upward on a more continuous, profitable growth path.

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