How to Navigate the Danger Zones of Business Growth
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If you’ve been in business for a while, you already know that progress isn’t linear.
It’s more like a series of stepping stones. There are times when growth feels relatively easy—there are still challenges, but they aren’t insurmountable.
And then there are times when it feels like you’ve hit a brick wall, and nothing aligns the way it needs to. Navigating these times is the true test of an entrepreneur.
The good news? You can anticipate these difficult moments in your business. Because they’re predictable. And completely normal.
Take a look at this chart:
You may have seen similar diagrams before; ours isn’t the only version out there.
Notice those bars between the columns that say DANGER? We affectionately refer to them as Valleys of Death (borrowed from the great Verne Harnish).
The first way to know you’re headed for a Valley of Death is based on your revenue. While there is variation from business to business, there are certain patterns that our consultants see play out consistently.
If you’re in one of the “gaps” in revenue, you’re likely in one of these danger zones.
And you’re probably experiencing at least some of these warning signs:
• Revenue and resources don’t line up. Often this shows up as “we need more people than we can afford.” You’re trying to juggle adding capacity and adding revenue at just the right time.
• You lack clarity. Something in your business has gotten murky and needs to be defined or redefined. It could be your offering, your org structure, or your plan for scale.
• You need next-level leaders. Whether you develop them from within or hire “been there done that” props, you need to develop more sophisticated leadership for your team.
• Lack of profitability. You might find that your profitability has dropped dramatically because you’re investing in the people, offerings, systems, and tech that will prepare you for the next stage of business. Unfortunately, you’re still too early to reap the fruits of your labors. Be VERY careful with how long you sustain low profits, especially if you aren’t backed by private equity or venture capital.
• Growth is slower than you expected. If it feels like someone just hit the brakes on your growth trajectory, you’re probably in a Valley of Death. For example, you might need to adopt a broader marketing strategy instead of relying only on referrals to increase lead flow. But doing so takes time, people, and cash.
So that’s what a Valley of Death might look like inside of your business. But it’s also important to understand how these periods can feel.
Like you’re failing.
You may be able to predict when your company will hit these periods, but that doesn’t mean you can avoid them. You might be doing everything right and still not be profitable enough. You might be well-prepared and still have to take a risk on something that may or may not pan out.
But at least you know that what you’re going through is normal. It’s not a sign of personal failure. It’s a sign that your business has achieved a certain level of success. That should give you some comfort when you find yourself in a Valley of Death.
And importantly, you don’t have to go through it alone. Whether you find a peer group, a personal mentor, or a consultant to support you, seek out advice. Ask for help. Learn from people who have gone through the danger zones before you.
Planning, preparation, and data should drive your business 99% of the time. But to bridge these gaps, you will have to take a leap of faith. Make sure you’ve got someone to catch you on the other side.