The 5 Reasons Companies Stop Growing (And What To Do About It)


We’re all looking for growth on some level. More customers, higher revenue, faster innovation, delivery, or service, bigger inventory, more locations, and on and on. The smart thinking says start small and grow.

Go big or go home.

But in business, growth is about more than just hoping for it, and it can often cause more problems than anyone might anticipate. It has to be strategic. It has to be for the right reasons.

Companies that grow for the sake of growth or that expand into areas outside their core business strategy often stumble. On the other hand, companies that build scale for the benefit of their customers and shareholders more often succeed over time.” ~Jamie Dimon, Chairman and CEO of JPMorgan Chase

You have to plan for the right kind of growth, but you also have to plan for the inevitable stumbling blocks and obstacles that come with it.

Eventually – no matter how meticulous your planning and tactics – you are going to bump up against a block. A plateau. Called an inflection point by growth-minded individuals in the business world, it’s an event or moment in a company that results in tremendous change to its progress. Things have to adjust in some way after it.

To continue to grow, to undulate upwards at an inflection point, a company needs to make changes in each of the following areas: people, money, and model.” ~Christine Comaford, Author and Serial Entrepreneur

Comaford suggests you look at your people as a system, rather than the individuals that make it up. Everyone – from the top down – may need to modify their approach and behavior at an inflection point.

The only way to break the endless cycles of an organizational stuck spot is to start treating the system instead of individual symptoms.” ~Christine Comaford

As for money, you need to examine it all: funding, revenue, budgets, expenses, accounting, commissions, and more.

Finally, think about your business model. Is your growth powered organically, or via acquisition? What sort of marketing strategies are being used?

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In other words, inflection points are a required element of growth. Problematic, yes, but necessary; and there are plenty of frameworks to help you navigate them.

But what about the growth itself? What causes a business – small, medium, or large – to stop growing and failing to reach those inflection points in the first place?

What are they, how do you identify them, and how best to deal with them? I’ve got five common ones to share with you.

Hit that inflection point, power through it, and move on to the next one. Growth, in a nutshell.

The Paths to Growth

There’s no one way to grow a business, so there’s (sadly) no one reason why it slows down, stops, or declines.

You might open additional locations, expand your service area, form an alliance or partnership, license your product(s), offer your business as a franchise opportunity, go after lucrative government contracts, diversify your product line, merge with another company, chase a new target market, open an ecommerce platform, intensify your marketing, and more.

Each option has its share of pros and cons, and you need to be aware of them, anticipate them, and prepared to deal with them.

Maybe you’ll try your hand at growth hacking, a subset of growth marketing that has taken on increased value and importance the past few years.

Growth is much more than traffic and increasing conversions. Although they have a lot of similarities, growth hacking covers more, including: branding, offline marketing, customer success, support, and more.” ~Sujan Patel

Or Facebook Ads. Or social media marketing. Or something entirely different and unconventional.

Whatever you do, choose something that works for you, your brand, and your customers. That’s the key. Don’t go with a particular strategy just because it worked for someone else, or currently has massive industry buzz. It needs to be right for you.

Growth takes time and effort. It’s an active enterprise. It’s multi-layered with many moving parts.

Growth is never by mere chance; it is the result of forces working together.” ~James Cash Penney, Founder of JCPenney

But selecting and implementing a strategy for growth is only a small part of growing your business. It needs to be monitored and measured. What metrics will you use as evidence of growth?

Even more important, though, is how will you know if you stop growing? Choosing and watching the right metrics is a great start: if you’re using increased revenue, and your revenue stops getting bigger, that’s a darn good indicator, right?

But knowing is only half the battle. Why has your growth stopped, and what can you do to kickstart it?

1. Complacency

To be blunt: complacency is a (business) killer.

It can strike anytime, anywhere, at any level. Owner, CEO, manager, supervisor, marketing department, assembly line, delivery drivers, mailroom, and everywhere else.

It’s inevitable. When you start out, you want to make a go of whatever business you’re launching. You dream of the day you hit X number of customers or $X in MRR or ARR. You work your tail off to get there, and then that magical day arrives when it becomes a reality.

You sit back, smile, and let out a huge sigh of relief. Kudos. Congratulations are in order.

But…too many of us get there and then ease up a bit, or a lot. We take our hand off the throttle. You’re at serious risk of falling into the complacency trap. You’re vulnerable because the pressure – either real or imagined – is off.

It starts at the individual level and then quickly spreads like a cancer to decimate an entire business.

How to Identify It

First of all, ask yourself whether you’ve recently hit a milestone of any sort. As I said above, this is when complacency tends to sneak in and set up shop. Hitting a goal or target is, of course, great for business. But don’t let it lull you to sleep at the wheel.

Next, take a close look at yourself and your partners or employees. Complacency tends to show up when a business is over-managed but under-led. Is anyone within your company:

  • Disengaged? You need to be invested and excited about the work.
  • Waiting to be told what to do? Complacent people don’t take the initiative on tasks or projects, preferring instead to wait for instructions.
  • Stopped learning? They’re not taking advantage of personal development opportunities or funds, believing they already know everything they need to continue doing their job exactly as they’re doing it today.
  • Not thinking for themselves? They don’t ask questions, they don’t make suggestions, and they simply do exactly what is asked or expected of them. No more. No less.
  • Cutting corners? Work is completed as fast and with as little effort as possible. It lacks details, suggestions, and collaboration.
  • Disgruntled? Anyone unhappy in their current job or position is not going to deliver their best work.
  • Apathetic? We need to feel passionate about what we’re doing to keep at it and strive to always be better.
  • No longer a risk-taker? These people change the world. They push the boundaries. You need to be one, and you need others around you. Calculated risks take an idea or business from good to great.

If you can answer ‘yes’ to any of these questions, there’s a good chance that complacency is to blame for your anemic growth. No one has ever succeeded at anything with the status quo. Innovation is the fuel that propels business.

I’m convinced that about half of what separates ‘the successful’ from the ‘non-successful’ is pure perseverance. People with passion can change the world for the better.” ~Steve Jobs

How to Fix It

Once you’ve identified it, complacency can be defeated.

In general, you need to set short, mid, and long-range goals, and develop strategies to reach them. Monitor and evaluate those efforts, and either tweak or continue as appropriate based on what you’re seeing. When you do hit them, know – or immediately plan – the next ones.

If your goal is to reach $5000 MRR, what happens when you do? How are you going to get there? And after that, what’s next? It’s hard to be complacent when you always have a concrete goal to focus on and work towards.

Make sure that everyone within the organization knows about the goals, strategies, and channels for communicating their own ideas and suggestions to get there faster.

In management, lead your employees, but don’t micromanage them. It devalues their worth, and typically leads to resentment and a culture of doing only the bare minimum because there’s no incentive or opportunity to go above and beyond.

At the individual level, if you see complacency in an employee, sit down with them and have a conversation. Much of it can be solved that way. Ask them what you can do to get them back to where they were when they first started the job.

The old adage ”if you’re not growing, you’re dying” may not be true, but you are in danger of becoming irrelevant and passed by your competition. Growth and innovation – even in small amounts – is a required element.

2. Doing It All By Yourself

If you started the business yourself, there’s an excellent chance you’re doing too much.

If you’re a perfectionist, there’s an excellent chance you’re doing too much.

If you’re a self-professed go-getter and workaholic, there’s an excellent chance you’re doing too much.

Entrepreneurs and SMB owners may play many roles in the beginning out of necessity, but a growth mindset means hiring experts – or outsourcing – to fill the more demanding roles as your business grows.

Failure to do so almost always leads to wasted time and wasted effort, which can bring growth to a screeching halt. You can’t juggle an infinite number of balls without dropping a few.

How to Identify It

The easiest way is to ask yourself: am I doing too much on my own? Answer it honestly.

If you’re unwilling or unable to do that, break it down a bit and examine a few key areas:

  • Accounting and Finances. Every business of every size needs to keep track of expenses, revenue, taxes, payroll, and so on. Are you doing this yourself? If yes – and unless you’re a trained accountant or financial wizard – you’re likely spending a disproportionate amount of time doing something that someone (or something) else could do in a fraction of it (and with fewer errors).
  • Administrative tasks. The minutiae of running a business could be taking you away from growing that business. Scheduling, data entry, supply chain, and so forth will eat up your time, making you unavailable and too exhausted to do other, more important things (like growth hacking).
  • Marketing. Again, maybe you’re trained or naturally gifted at this, and maybe you’re not. Not many businesses are going to succeed without a dedicated and knowledgeable marketer getting the word out. If you’re doing it all and teaching yourself while you do it, it’s taking too much time and effort. Period.
  • Communication. Are you the one answering the phone, replying to emails, dealing with complaints, and monitoring your social channels? If yes, it’s time to stop if you’re serious about growth.

Generally speaking, we know when we’ve taken on too much, but it can be difficult to admit it when it’s your business.

Do you have the time to do the things you have to do to the best of your ability? Do you resent or hate some of the tasks on your plate? Are you irritable at work? Have you stopped taking care of yourself?

If yes, you’re doing too much. Stop.

How to Fix It

Get help. Hire additional employees – either full or part-time – that are trained or specialists in the areas you need taken off your hands. If you can’t afford that just yet, look to digital solutions instead. It’ll still likely cost you, but far less than the salary and benefits of an actual employee.

There are tools, SaaS providers, and freelancers out there for virtually everything you’ll need. For example:

  • Accounting and Financing – take a look at QuickBooks Online or Freshbooks. Check out this Freshbooks vs Quickbooks article and this list of online HR and payroll tools.
  • Administrative – consider a virtual assistant like Tasks Everyday, OkayRelax, Perssist, or Fancy Hands.
  • Marketing – short of hiring a marketer or outsourcing to a marketing agency like Web Profits, you may need to keep doing this yourself, but there are plenty of tools that simplify and automate it for you. Try Mailshake (cold emailing), Hootsuite for scheduling, curating, and monitoring social media posts, Quuu Promote for content promotion, and more.
  • Communication – Try a digital help desk like ZenDesk or Help Scout, and/or set up a chatbot like GrowthBot, Chatty People, or Telegram on your website and social channels.
  • Look to sites like Upwork and sites like Fiverr to find a freelancer to do some or all of these tasks for you.
  • There are also task-specific sites and services – like 99Designs for graphic design – for whatever you might need. Just do a quick Google search and click one that looks good.

Ask for help. Look for help. Ask questions of those that know better than you. Learn. Read. And trust you don’t have to do it all. Get more done by doing less.

3. Not Tracking Churn and Working to Reduce It

Is it cheaper to acquire a new customer, or retain an existing one? If you’re in business – any business – you know the answer.

It is cheaper to retain than to acquire. Acquisition costs can be 5-7x more than retention costs, to say nothing of the fact that existing customers are 50% more likely to try new products, buy 90% more frequently, spend 60% more per transaction, and generate 23% more revenue and profitability than new or average ones.

And yet, only 18% of businesses focus on retention, while 44% focus on acquisition.

Are you one of them?

How to Identify It

Statistically, you’re likely in the acquisition group.

Typically, you’re aware of how many new customers, new orders, and new subscriptions you’ve picked up during a set period of time. It’s Business 101.

But you can answer right now whether you’re tracking and working to reduce churn (when a customer stops buying or doing business with you). So…are you?

It’s either a ‘yes’ or a ‘no.’ If ‘yes,’ great. But it probably needs more focus and attention. If ‘no,’ start today. Seriously.

How to Fix It

Churn is a part of every business, but as the saying goes, that which gets measured, gets managed.

Step 1 is to start monitoring and tracking your customer churn. How many leave in an average month, or quarter, or year? What is your churn rate (there are actually many ways to calculate your rate depending on your specific business model)?

As a rule of thumb, you want the churn rate – number of churned customers/total number of customers at its most basic – to be 5% or less. Anything above 10% should be cause for alarm most of the time.

Once calculated, you can quickly see if it falls within the acceptable range (0-5%) or is getting to be a problem (especially if you see a month-over-month or year-over-year increase).

To reduce your churn, you need to show your existing customers how much you appreciate them. You need to actively work to make their customer experience better each time.

How? Try these:

  • Listen to them. Ask for feedback, send out surveys, conduct polls and user testing, and more. The voice of the customer is invaluable. Ask what they like about you, what they see as your weaknesses, products or options that’d love to see you offer, and so on. Listen. And incorporate.
  • Improve your onboarding. How easy is it for your customers to originally sign up, get access to new features/products, and return for more?
  • Put the customer above all else. Show you care about more than the dollars they spend. Set up automatic emails on anniversaries and birthdays. Reward your most loyal with points, discounts, or free gifts. Respond quickly and positively to negative feedback and complaints.
  • Follow up with customers who have already churned. If nothing else, find out why they moved on or switched to a competitor.
  • Check in with them periodically with updates, suggestions, helpful content, or just to say ‘thanks.’

Reducing churn by 5% can increase profits by 25-125%. How’s that for growth?

We get too preoccupied with growth, and lose sight of the importance of our existing customers. It creates a two steps forward, one step back (or vice versa) scenario that limits just how much growth you’ll be able to manifest.

Sometimes it’s necessary to cut back in order to grow more.

4. Stopped Listening and Innovating

This ties in nicely with what we’ve just gone over with customer churn. Essentially, when you stop listening – to your customers, to the industry, to your competition – you’re dead in the water.

Take BlackBerry, example. They invented the smartphone, and ruled over the market with an iron fist. For a while. But because of their success, they stopped listening. They figured their smartphone was a finished product that would always be popular.


Customers wanted touchscreens, and bigger screens, and better cameras, and more. As the industry started evolving, BlackBerry didn’t listen and didn’t change. New competition emerged – such as the iPhone – that was clearly listening and innovating.

BlackBerry’s market share began to shrink. By the time they tried to start listening and innovating again, it was too late. When’s the last time you saw someone with a BlackBerry?

How to Identify It

Let’s be honest. You already know. We get caught up in how successful we are, or how popular our product or service is, and we figure we’ve made it. But without listening, it won’t last. Guaranteed.

Leaders who don’t listen will eventually be surrounded by people who have nothing to say.” ~Andy Stanley

Truly listening in any situation is active. It takes focus, effort, and concentration. Are you (your business, your brand, your employees) available to listen? Do your customers know where and how to engage with you?

If you haven’t introduced any new products or services – or updates to existing ones – in the past few months or more, you’ve stopped listening. There’s always room for improvement, and new demand.

Businesses grow via innovation. Innovation arrives via listening. It’s that simple.

How to Fix It

Easy: start listening, or listen better. That’s the short answer.

Ask questions of yourself, your employees, and your customers. What are the emerging trends in our industry, what are your customers asking for that you’re not currently offering, and how could you streamline and increase efficiency for your employees?

Ask. And listen.

Don’t guess at answers to these questions. Ask and listen to the people that know. Go directly to the source.

Make yourself available. You can’t listen if you’re never around for the conversation. Too busy? See reason #2. Schedule round tables with your staff and partners, and be there. Line up customer focus groups, and be there. Have known channels – email, social media, live chat, whatever – for people to contact you, and be there. Reach out, engage, and connect. Sit down, look people in the eye, and listen to them.

Be open to what you may hear. Don’t go in with a decision already made. Be willing to defer to the “experts” and hear their ideas and rationale and thinking. And most importantly, don’t be afraid to let that change your mind.

And finally, be confident that listening to and actually hearing someone else’s idea or approach is not a sign of weakness or insecurity. It’s the hallmark of a great leader. You don’t have to know it all. You don’t have to decide everything based only on what you already know.

Be available, open, and confident. Those with something to say will come to you.

5. Relying on Referrals

Referrals are fantastic in the early days of a startup or business – new customers, rewards for existing ones, everyone’s happy – but you can’t rely on them forever. And you can’t take them for granted, either.


There’s an art to referral marketing and reward programs for referring customers. You need the right incentive at the right time.

And just so we’re clear, you can drum up a lot of business via referrals and word-of-mouth. It should be part of your overall strategy. But it shouldn’t be the only tactic.

Too often, new businesses – and even established ones – lean too heavily on both because they just don’t know how to find new customers without it.

How to Identify It

Look at your company data and customer accounts. Ideally, you have details on where each customer came from, by which channel they found you: a PPC campaign, organic search, a guest post, social media marketing, referral, and so on.

Compare the numbers. Maybe you don’t have the necessary data, or maybe you already know how the majority arrive, but if you do have the numbers to crunch, then crunch them. In a perfect world, you’re not leaning too hard on any one tactic or channel.

A recent survey of 7500 SMBs found that 85% (!) rely on word-of-mouth referrals. While it can work great, if your growth has slowed or stopped altogether, your referral funnel is to blame. Look at your data.

Referrals and word-of-mouth “marketing” is not really marketing at all, because unless you’re playing an active part in it, you’re just sitting back and waiting. Hoping.

Your existing customers may love you, but I can guarantee that promoting your business and ensuring a steady influx of new leads for you is not high on their list of priorities.

If 25% or more of your business comes from referrals and word-of-mouth, it’s time to diversify.

You have no control. You have added no value to your business. Your CLIENTS own your business, not you. And that should scare the HELL out of you. You need a Referral Program to have more control, a program that’s integrated with all of your marketing.” ~Bryant Vickers, Dominate or Die Marketing

How to Fix It

You don’t have to drop referrals. You just have to improve how you get them, and diversify your channels and tactics.

You need a referral system in place, not a sit-and-wait approach. You need to go after referrals from your satisfied customers.

You can keep using referrals, just use them better. Smarter. Encourage them. And task your marketing team with managing the referral program: those that do are 3x more likely to hit their goals (but only 10% of surveyed businesses have done so).

Next, draft a growth plan that includes actively going after your ideal customers in the places they can be found. Who are they? Where are they?

Create buyer personas. Research those personalities. Create a marketing mix that doesn’t rely too much on any one channel. That way, if any one channel dries up or slows down, you’ll still be bringing in new customers.

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The ‘right’ mix will depend on the answers to the ‘who’ and ‘where’ questions. It might include:

Find the blend that works for your audience.

Everything seems to reach a point of ‘diminishing returns.’ Whether it’s a fitness plan, a particular diet or the strategic plan of a business, there’s a general algorithm: Start up, growth, plateau; then decline. If you have not designed your strategic plan and your underlying processes to anticipate and usher in change, you are likely to eventually hit a plateau.” ~Ken Moll, Founder of Blue Elevator

You need to plan for growth. You need to watch for decline. How many of these describe you and your business?:

  • Few if any new products or upgrades introduced lately
  • Few if any updates to your website lately
  • Your bottom line has been pretty consistent for the past 6 months
  • No clear, measurable goals
  • No guiding vision or mission statement
  • You’re not tracking and analyzing your competition, customers, and industry

Even one ‘yes’ could be a signal that decline is coming, if it hasn’t already reared its ugly head. Stay ahead of the inevitable plateau and decline cycle. Plan for growth, monitor and manage decline, and succeed.

How do you manage your growth? What has stopped it for you, and how did you respond? Leave your comments below:

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