Running an online micro business can be a unique and thrilling experience. It’s a world apart from the 9-to-5s many of us have worked before and I am sure that most of us would never consider going back.
However, online entrepreneurship does come packaged with its own unique set of challenges. Although it can seem like a fairytale dream from the outside, in reality there are pros and cons like anything else.
One such con is stagnancy — a period where your business stops growing. It can take its toll both financially and psychologically.
Business growth is exciting and fills you with a sense of confidence and expectation — stagnancy can leave you feeling quite hollow and dejected.
With the above in mind, in this article I want to discuss how you can tackle stagnancy and punch through plateaus when the time inevitably comes.
Recognizing a Plateau
Plateaus can sneak up on you — especially if you don’t have a solid handle on the metrics that truly represent your business’ growth and ongoing success.
A lot of us follow what Eric Ries of The Lean Startup calls “vanity metrics“:
When you hear companies doing PR about the billions of messages sent using their product, or the total GDP of their economy, think vanity metrics. But there are examples closer to home. Consider the most basic of all reports: the total number of “hits” to your website. Let’s say you have 10,000. Now what? Do you really know what actions you took in the past that drove those visitors to you, and do you really know which actions to take next? In most cases, I don’t think it’s very helpful.
Instead of studying worthless vanity metrics, focus instead on what Ries calls “actionable metrics”:
Imagine you add a new feature to your website, and you do it using an A/B split-test in which 50% of customers see the new feature and the other 50% don’t. A few days later, you take a look at the revenue you’ve earned from each set of customers, noticing that group B has 20% higher revenue per-customer. Think of all the decisions you can make: obviously, roll out the feature to 100% of your customers; continue to experiment with more features like this one; and realize that you’ve probably learned something that’s particular valuable to your customers.
Learning to recognize the difference between vanity metrics and actionable metrics can make all the difference to the growth of your business and your ability to recognize a plateau when it’s on the horizon (rather than staring you in the face).
Consider the aforementioned example of web traffic. Say traffic to your site is increasing by 5% month-by-month. That’s all well and good, but if the traffic is from a poorly-targeted source and isn’t actually contributing to income generation, it’s sending you false signals.
As such, it is vitally important that you have your finger on the pulse of the most important metrics to your business. Take the time to figure out what these are,and create a spreadsheet in which you record them on a periodic basis (say weekly or monthly). This spreadsheet will give you an objective overview of how your business is growing (or not) — with it you can make informed decisions on quantifiable data rather than assumptions based upon your subjective viewpoint.
How to Punch Through a Plateau
It is not the intention of this article to give you a comprehensive and detailed account of how to overcome plateaus with your specific business model. In reality, the following advice can apply to everyone from eCommerce store owners, to bloggers, to freelancers, and beyond. You should take the general strategy advised below and apply it to your own business appropriately.
In my experience, the best way to punch through a plateau is to take the following three steps.
1. Assess Where Your Business’ Value Lies
You’re probably familiar with the Pareto Principle (otherwise known as the 80/20 rule): the idea that eighty percent of the effects come from twenty percent of the causes.
This principle (to an extent) almost certainly applies to your business. If you’re an eCommerce store owner you may find that a specific range of products generates the most return. If you’re a blogger you may find that social media traffic is more valuable to you than any other source. If you’re a freelance writer then you may find that you make more money from a certain type of client than any other.
One of the most valuable steps you can take in punching through a plateau is to analyze which elements of your business offer the greatest return. If your income is stagnating (or worse, declining) then you need to redouble your efforts in the areas that will have the greatest effect.
2. Assess What You Do
When I say that you should assess what you do, I mean this both in terms of yourself personally and your business.
Following directly on from the previous point, you should strongly consider chopping off the parts of your business that do not offer a good return. You should get rid of the deadweight so that you have more time and resources to grow those areas of your business (or new areas of your business) that have a greater potential for success.
Furthermore, you should consider how you utilize yourself within your business. Are you spending half of your day carrying out monotonous administration tasks when you could be brainstorming new ways to increase the profitability of your business? While handling everything can seem like a good way to save money in outsourcing and contracting costs, it is a false economy if you do not afford yourself the time to work on business development.
3. Do Something Different
This is a mantra by which all businesses should live by when it comes to generating growth.
The argument is simple: if you are trying one method and it isn’t working, try another. I know it sounds blindingly obvious, but you have probably established well-worn poor habits that you’re not even aware of. Similarly, the way you do business can follow a certain path for too long until you find that what once worked doesn’t anymore.
So be ruthless in taking a different direction with your business if necessary. The greatest chance you have of sparking a growth spurt is to attempt something you haven’t done before. The risk may be higher, but no business ever grew by always playing it safe.
If you crave growth then you need to give your business the chance to grow — staying on the same tracks in the long term inevitably results in stagnancy.
Go Back to Basics
Punching through a plateau in business growth is not necessarily difficult. In fact, you could be overcomplicating the process dramatically. The concept of “more complicated is better” is a popular one, and yet the opposite often applies.
So don’t be afraid to go back to basics. Remember what initially made your business so successful. Ask yourself if you have stayed true to your target customers’ needs. The simplest questions can often provoke compelling answers and provide the key that unlocks the door to future growth.
photo credit: Cayusa
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