Episode 378: Breaking the Barriers: How to Overcome Stagnation in Your Business
Many business owners often find themselves at the helm of potentially lucrative ideas and a solid infrastructure but struggle with growth. Discovering and addressing the reasons behind this stagnation can unlock significant business prosperity.
In this episode, Adam and Chris dive into the three primary reasons why businesses often find themselves stagnant and unable to grow. Adam and Chris kick off the conversation by addressing why businesses fail to grow, zeroing in on the crucial component of investment. They discuss the necessity of investing in marketing, sales, and talent to spur business growth, and offer practical advice on how to manage and mitigate associated risks.
Show Highlights:
- Investment is critical for growth. Businesses must channel resources into marketing, sales, and staff to create opportunities for expansion.
- Fear often holds back growth. Understanding that venturing outside comfort zones is necessary can help mitigate fears.
- A successful business requires a competent team. Bringing in new voices and ideas can drive innovation and change.
- Ongoing investment in the right areas is essential to maintain growth and prevent stagnation.
- Proper management of cash flow and financial planning can support smarter investment decisions and reduce risk.
Links Mentioned:
Get your Business Growth Secrets SUCCESS PLANNER for FREE and profit like a pro: https://adamstottplanner.com/free-book47315172
Adam’s website: https://adamstott.com/?el=Pod
Watch the Episode on Adam’s YouTube Channel: https://www.youtube.com/adamstottcoach?el=Pod
Connect with Adam on Instagram: https://www.instagram.com/adamstottcoach/?el=Pod
Join Adam’s network on LinkedIn: https://www.linkedin.com/in/adam-stott-coach/?el=Pod
Coaches, consultants, and business owners – lower your marketing costs, increase ticket prices, and get more high-ticket clients: https://3daybrandbuilderworkshop.com/start-here?el=Pod
Transcript:
Please note this is a verbatim transcription from the original audio and therefore may include some minor grammatical errors.
[00:00:00] Adam Stott: Three main reasons why businesses stay stuck. That’s what we’re going to be exploring in this episode of Business Growth Secrets. What are those reasons that businesses don’t grow and how do business owners break free in order to step into their greatness? Let’s jump in to this episode of Business Growth Secrets.
[00:00:23] Hey everybody and welcome back to another episode of business growth secrets. I’m really excited to be diving into some of the reasons that businesses don’t grow. And if you’re a business owner, you’re looking to be a business owner. You’re looking to either start your business, grow your business or scale your business.
[00:00:40] This episode is going to be critical for you because we’re going to explore what keeps people stuck. And back boy. Popular demand. If we can say that is Chris, our marketing manager back on the show. Welcome Chris. Can we say back by popular demand?
[00:00:56] Chris Cook: Very popular demand. Always more views than my fellow colleagues.
[00:01:01] So I’ll take that. And,
[00:01:02] Adam Stott: and a few comments thrown in. If you’re loving Chris, you can put some Chris love in the comments. You certainly make him smile. Don’t put any hateful ones in there. We don’t want him crying, right? A bit of extra validation Good stuff. Well, look you’ve got some questions today that have come in from the audience looking forward to diving into these.
[00:01:22] Chris Cook: What you got? You want to kick us off, buddy? Sure. So this one actually came in by Lisa on Instagram. And this is actually one of the most common reasons people seek our help. So there’s a lot of businesses got great products, good service, solid customer base, but the numbers aren’t shifted. Maybe for 12 months, the numbers haven’t moved.
[00:01:41] The business is stagnating. What are the most common reasons? Let’s say it’s have three most common reasons. Businesses don’t grow. Why is that happening to them? And how can they fix that?
[00:01:53] Adam Stott: Yeah. So it’s a really good question. I’m looking forward to unpacking this one because as we unpack it, there’s going to be lots of business owners watching that are going to be able to really see themselves of whether they’ve experienced these different issues.
[00:02:06] The issues are really simple. The biggest reason I’ll tell you the reasons, then we’ll explore more. The number one reason that. Businesses stagnate and don’t grow is lack of investment. That’s number one. And if you have a business that you don’t invest in, and we’ll go deeper into this fear around that.
[00:02:25] Yeah, well, that’s number two, right? So we’re already jumping to number two, but lack of investment, if you don’t invest in your marketing, you don’t invest in your sales team, you don’t invest in your people. And you don’t invest, you cannot expect growth and we’ll unpack that and really give people some practical steps in a moment as to how they can invest, what should they invest in?
[00:02:42] What should they be doing? And number two, I would say is fear. And the reason that fear and there’s lots of different elements of fear from the business owner themselves, lots and lots of different elements. But one of the biggest issues around fear is when people achieve a certain degree of success, maybe they’ve grown, their business have started and they’re getting it somewhere.
[00:03:04] Then all of a sudden they become afraid if they push it too much, will they lose? If they push it too much, will they lose what they’ve created? They’ve already done all this hard work. What if I keep pushing it and it doesn’t go where I want it to go? And there’s a lot of fear that comes up from. In a big way.
[00:03:18] So we’ve got lack of investment. We’ve got fear. And then the next one number three, and we, and both of those are gonna link together is team is they haven’t got the right people driving the business and the people that are in the business might have been in the business for quite some time.
[00:03:38] You need new voices to grow a business. You need new ideas. You need new people with new opinions that are going to come in and add different skill sets, different values in order to grow. So we look at those three things, investment, fear, team, and we start to unpack them a little bit. Let’s start with investment.
[00:03:55] Yeah, definitely. So when we look at investing, let’s say someone’s watching, they’re a business owner and they’ve got to the stage in the business where it’s been growing, but now they’re stuck. And as you described, they’ve been stuck for a year. What the analogy that I often give our events is that your business is the metaphorical analogy.
[00:04:17] Your business is like a baby. In order for that baby to grow up and the main aim for a business owner and the main aim and the best goal that you can have is how do I make myself redundant? How do I remove myself from the business? And how do I get the business looking after me rather than me looking after it?
[00:04:36] And the analogy is if your business is like a baby, we’ve got to feed the baby. Now, the baby needs to be fed two things. It needs to be fed. Money cash and it needs to be fed time if you give the baby money and you give the baby time the baby can grow up and then the baby can become a, you know, a little toddler and then he can grow up a little bit more little boy, little girl, then it can be will skip the teenager phase.
[00:05:01] It could be a young adult and then it can grow up and then you get it. To go to the retirement home and they look after you, right? That’s the kind of game plan. The problem with a lot of business owners is they stop feeding the baby either the time or the money and their number two, which is the fear crops up.
[00:05:24] So I’ll give you an example of this. We understand that there’s certain activities we need to do to grow a business. We need to build our brand. We need to market. Our business, our brand, our products, our services, and we need to sell more products and services. Those three activities really grow the business.
[00:05:41] That’s where you need to invest. Branding, marketing, sales, and this is what happens. Hey everyone. Hope you’re enjoying the podcast. We’ve got a free training that I’m doing right now online from the comfort of your own home called stand out brand. What this does is it shows business owners how to get noticed on social media, stand out.
[00:06:02] Get more leads and get more sales. So if you want to make more money in your business, head over to Adam stop. com forward slash SOB. That’s Adam stop. com forward slash SOB and join us on the free three day workshop. Stand out brand. What happens is. Business owner gets used to being a hundred thousand pound business.
[00:06:24] So they have this financial threshold that actually we’re a six figure business. We make, you know, 8,333 pound a month, and I’ve got two members of staff that I invest, you know, 3000, 4,000 pounds in, or one’s part-time, blah, blah, blah. And, you know, then I take my little bit and then it, what happens is out of the 10,000 pound a month that they’re generating, they’re left over with a thousand pound, 2000 pounds worth of.
[00:06:46] Profit. So the business is not making a lot of money. And then they say to themselves, Oh, I can’t afford to spend more money on marking. I can’t afford to spend more money on branding. I can’t afford to hire a sales person. I can’t afford to invest in growth. So what they do is rather than investing one type of currency, which is the money, they just say, well, I’ll just invest more time.
[00:07:09] And the problem with this is business owner starts investing more time. They get up earlier. They stay later. They work harder and they can do that for a period of time and that drives the business. But it gets to a point where eventually they get tired. They get worn out. They start to feel snappy, frustrated other areas.
[00:07:30] Yeah. And like literally, they just can’t work any harder. So the only way that they can, Go from 10, 000 a month to 20, 000 a month is more investment, but not more investment of time because you only have. So if we look at the investment of time for a business owner, some working eight hours a day, I could get in two hours earlier and I could work 10 hours.
[00:07:50] I could stay two hours later, I can work 12 hours, but in one week I’m knackered. So instead. If I’m working eight hours, I’m only making a couple of grand a month profit and my business isn’t making much money and I’m worried about investing, but then I go and I invest in another person. So I take employee number three on, I then buy in another eight hours.
[00:08:11] I’ve now got 16 hours worth of productivity. Which is more than the business owner can do by themselves. And the business owner can stay fresh and then we can generate more revenue. So what you have to look at is yes and this is like for me, a really important role is don’t look at what it costs.
[00:08:27] Look at what it makes. It’s not what it costs you is what it makes you. And if I can invest in a salesperson, I’ve got to invest 2000 pound a month in a basic salary and they go out and they win me. I know 6, 000, 7, 000 worth of business. In this scenario, I take my business from 10 to 17, which actually improves the bottom line even after I paid them from two to four.
[00:08:49] And guess what? Then I invest in the next salesperson. We go from 17 to 23 and now I’ve gone from, you know, four to six, seven, and now my business is starting to grow. So investment. And in fact, all three things I’ve just given you are linked together. The investment is usually what people are afraid of.
[00:09:10] The team is usually what people don’t invest in and they don’t realize. So you’ve got all those three things like totally interlinked, which is keeping a business stuck and. A business owner needs to understand that, you know, you created a business, you have to get comfortable risk. You are going to have to invest.
[00:09:27] Yes, you’re not always going to feel comfortable, and you are going to have to develop people to grow a great team. And if you don’t do that, you
[00:09:32] Chris Cook: will stay stuck and to get over that stagnation period or to even stop it happening. It’s continuous reinvestment in the right areas. Yeah, continuous
[00:09:41] Adam Stott: reinvestment.
[00:09:41] Now, you know, you could argue because it’s not every scenarios like that, but that’s a very current common scenario. You know, someone might get lucky. They might go out and sign a 200, 000 contract that’s going to bring him in, you know, another 20, 000 contract. It’s going to bring in 20, 000 a month and then they go and hire their team.
[00:10:00] And I think that’s what people almost like. I want to make sure I want to grow my business. I want to scale my business. I want to build a team, but I don’t want any risk. And that’s the problem. Now, I’ll give you a way to manage these and start to manage this mindset. First of all, on the investment, one of the things that a business owner can do to manage investing in their business is to understand their cash flow better and their cash conversion cycle.
[00:10:30] So understanding the. How to use cash flow, how to fund their business in different ways. So, for example, you need to start to open up lines of credit within the business. Perhaps you’re going to get a business credit card that you pay off in full every month. You’re going to get some air moles, but it gives you the ability to spend your marketing money and then not pay your marketing money back for 30 days.
[00:10:53] Chris Cook: All right. I think it’s important that business owners know that those facilities are out there as well, because I think a lot of people are actually scared. They’re there to be used. All of our
[00:11:01] Adam Stott: marketing spend, you know, 100k a month, as you know, goes on plus something like 150 grand a month. Spending all that at the moment.
[00:11:07] Yeah. Yeah. But, you know, all of that goes on American Express. And we go and it’s 54 days you go and acquire the clients. And after you acquire the clients, you’ve got the money and you pay off. And that is positive CCC. Which is cash conversion cycle. So this allows you to grow and scale without actually using all of your own capital.
[00:11:29] You can use other people’s capital. Now it’s good to be trained on that and understand it properly. I’m not saying go wild and just get loads of credit cards and iron them out. That’s not the way forward, right? You need to manage these. Look at what options are available. Yeah. Perhaps get some help on that.
[00:11:42] And this is where coaching really comes in to understand how to manage cashflow. Another thing you can do to, to really, this is one of the things that people struggle with cashflow. And the reason they don’t grow is they look day to day. You need to be able to look. But you should be able to predict what is going to be in your bank account in 30 days time from now, what is going to be in your bank account 60 days from now, what is going to be in bank account 90 days from now, because if you knew that, and you just had, even if you did it on Excel to start with, before you start getting into cash flow statements, and you just are able to tweak one number, and you go, Okay, well, if I invested five grand here, In 90 days from now, that’s going to put me in a position here.
[00:12:23] What it does is it allows you to look forward into the future. And again, this kind of cashflow knowledge is critical for a business owner to be able to invest wiser and not take as many risks. Because this is the thing about business or when you have the knowledge. All risk can be mitigated, which is important, right?
[00:12:43] Did you have a question? Yes,
[00:12:44] Chris Cook: I was just gonna say so from a team perspective, it probably pays to bring somebody into the business who is really hot around the numbers can really help. But in
[00:12:53] Adam Stott: that scenario, we talked about the small business, you know, your business owner is going to need to be hot around the numbers.
[00:12:59] They’re probably gonna have a good relationship. And start driving their account on a managing their account or managing their bookkeeper, and they need to be in charge of it rather than being told what’s going on. And then as the business grows, you know, you get into a million pound business, you definitely need really good financial systems on actually even lower than that, you know, from a 250, 000 business that wants to go to a million pounds, you’re going to need to really get all on your financials and understand your financial numbers and understand investing because All businesses is investing and so it really is whether you invest in a desk, whether you invest in a microphone in and the question is, if I buy this desk, what sort of return does it create if I buy this microphone?
[00:13:40] What type of return does it create? And the reality is, if it either creates a return or it doesn’t create a return. So when I buy this microphone, if it improves my sound, you know, that is an improvement. But does that create me a return? Well, that means we retain more listeners and those listeners go on to then become clients of ours.
[00:13:56] And it does help create a return. Makes sense. I’m not sure what the desk is doing, though, was covered covering my belly, which is a good return on investment as well. So you look at these different things you got. First of all, I’m not investment pace. The second piece is fear. The reason people are afraid is because when you’re asking someone to do something that they have not experienced before, fear is going to come up.
[00:14:23] If you say jump out of a plane and you’ve never done it before, you can be afraid. You’ve done it 20 times. You’re going to be a lot more. You’re a lot more okay with jumping out of that plane, you know, parachuting, for example, it’s the same with business. People get to the point where they spend a thousand pound a month on marketing.
[00:14:38] They’re comfortable. I say, 10, 000 pound a month. They’re going to panic. They’re going to go, oh my God. And they’re going to be a player. So, well, let’s take that to 50 grand a month. They’re going to burn it. They, you know, they say it’s 100 grand a month, say it’s 200. And the problem is the fear just comes.
[00:14:51] Keeps coming up over and over again. So it’s important for you to be able to manage your fear and realize that, you know, fear is something that is a signal to you and you’re receiving a signal when you’re afraid, they’re saying that you’re going outside of your comfort zone.
[00:15:10] Now, the problem is most people interpret that signal as a negative. They say, well, I’m going outside of my comfort zone. That’s negative. Yeah. Actually, when you’re going outside of your comfort zone, that’s where the growth happens. So actually it’s a positive. So if you’re getting that signal fear, you can say is actually, I’m about to do something that I’ve not done before.
[00:15:30] That is unknown. However, that’s going to allow me to get that next level of growth. And this is where mentorship coaches come in. If you’re working with someone that’s walked the path already, they can help you manage that fear because they can give you an insight into what’s coming on the road ahead.
[00:15:47] And then the next one, of course, which is people is understanding the, you know, it doesn’t matter how good you think you are, it doesn’t actually matter how good you are there is no uber successful business that’s a one man army, there just isn’t, or one woman army, there isn’t, you know, you.
[00:16:05] You have to understand what the definition of a company is, which is just a group of people. That’s what a company is. So great companies build great groups of people. And if you are a one man army, a one woman army, and you are, You know, really, you’ve got a self employed job rather than a business. So you’ve got to look to, to really look to how are you going to build your company?
[00:16:32] And if you look at that, then you can start to see things differently. It’s a different frame of mind, and you can start to build towards what you want.
[00:16:40] Chris Cook: So basically, I think that if you understand the numbers around the investments, if you bring the right people in, team, that’s going to help mitigate the
[00:16:50] Adam Stott: fear.
[00:16:51] So that’s
[00:16:52] Chris Cook: kind of a knowledge is power situation there, isn’t it? Absolutely. The knowledge around the investment, the knowledge you’re going to bring into the team. Yeah.
[00:16:59] Adam Stott: People, I think that people, I think this is a major mistake. I certainly made this at the beginning. Where I think the biggest mistake is the DIY mentality.
[00:17:11] I’m just gonna, I’m just gonna figure it out, just gonna try, you know, I’m just gonna guess and that DIY mentality is what keeps most people from ever getting to their dreams, getting to where they want to be, you have to be open minded, you have to bring great people around you. You have to have great advisors and you have to have people around you that walk a path.
[00:17:37] You know, everyone I know is successful, has sought out great mentors, great coaches, great people that can advise them on how to get to the next stage. And if people don’t do that often they’ve gotta deal with that fear on their own. And most people can’t do that. Now, the people that can do that, and there are people that can do that deal with that fear on their own, in my experience.
[00:17:56] Because I’ve definitely been one of them are often reckless because they’re not afraid of anything. They’re sort of drinking their own hype. And I think they’re just no problem. No problem. No problem. I’ll figure it out. I’ll just do it. I’ll just keep doing it. And that reckless behavior. You’d be better off playing tennis than playing business, because when you play business, you are playing with money, you’re playing with people’s lives, you need to get it right.
[00:18:22] You don’t want to get it wrong. So it’s much, much better to make sure you got people around you that can help to guide you and advise you.
[00:18:28] Chris Cook: In addition to things like stagnating numbers, any other indicators that tell you, okay, you’re at a stage now where you need to Invest you need to bring team into those
[00:18:44] Adam Stott: three things we just said but just to wrap this question I would say is couple of things that help grow businesses one new voices you bring in some new voices.
[00:18:54] Into your business, whether that’s a co a coach, a consultant, a mentor, and you bring in a new voice that will rapidly induct change a new team member that could be, you know, a new senior leader in the team, whoever that will create change in an organization. Number one. Number two, you getting into new environments as the business owner will also create change because you will start to see rather than you being in your day to day and all the things that you’ve been doing and you’re used to doing day to day again and again, you will start to see that actually There’s other people doing it a different way and you will start to examine your own behavior and say, is there a way I could do this better?
[00:19:38] So those two things, new voices, new environments, create business change and rapidly help businesses to change are business owners to change in a big way. Okay. Fantastic. Brilliant. Alright, well look, hopefully you’ve enjoyed that episode today. I think there was some cool stuff that you know you can really look at.
[00:19:55] To give you a very quick recap, ask yourself the question. Are you getting new voices around you? And it’s great to watch YouTube videos and get information, but there’s nothing quite like sitting between the eyes, having a conversation. You know, I think that’s really important as well. Don’t forget that human interaction, get yourselves in some great environments.
[00:20:16] You can come and join us at a live event. I’d be really pleased to come and meet you go on and check out big business events dot co dot UK to see how you can work closer with us. And we start to help you grow your businesses and really start to look at yourself and say, Hey, you know, are there some things that I’m not investing in that I should?
[00:20:35] Are there some fears that hold me back and hey, are my team the right team? Or do I need to start top grading my team and start bringing in some people that can help me go in the right direction? And of course, if you’ve enjoyed this episode, whether you are watching and you’re on YouTube, we now put these on YouTube for the visuals, or you’re listening on Spotify or Apple, go and give us a review or tell us in the comments how much you’ve enjoyed and you’ve got some questions, let us know how We’d love to help you and help you start, grow, or scale your business over and out.
[00:21:04] I hope you enjoyed today’s episode of business growth secrets. Hi everybody, Adam here, and I hope you loved today’s episode. I hope you thought it was fabulous. And if you did, I’d like to ask you a small favor. Could you jump over and go and give the podcast a review? Of course, I’ll be super grateful. If that is a five star review, we’re putting our all into this podcast for you, delivering you the content, giving you the secrets.
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