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Not getting the most from your business? 5 signs your business growth isn't sustainable

black and white photo of a roller coaster car going to the to of a very high point
There's no doubt about it...running your business can be like riding a roller coaster

Owning and running a business can be exhilarating.

And sometimes not.

In the early days, you see your business take off as sales climb. But what if that initial boom isn't built to last? While early growth might create excitement, it’s essential to stay focused on what comes after the initial rush…how you make sure growth is sustainable over time.

Fortunately, there are some early warning signs that things might not continue to go as swimmingly in future as they have in the past. Being aware of those signs is one thing, but doing something about them is an entirely different matter.

Here, we look at five key indicators that your business growth might not be on a stable trajectory:

1. Losing focus on your business purpose

Every business has a “founding, non-financial” reason for existence beyond making money. Some businesses just don’t know it or do know it and fail to make it a business asset.

Of course, creating profitable growth is important, but it won’t happen without clarity of direction and a framework for making decisions.
Understanding your business "why" provides clarity of direction and a decision-making framework

Purpose provides that direction. It inspires your vision, informs your strategy, and, as a result, provides the guidance required for day-to-day operations. When purpose is unclear or absent, your business can languish in a sea of uncertainty, which is not conducive to sustainable growth.

If that sounds like your business, take some time out to define (or redefine) your business purpose. You can check out one of our previous posts for ideas about how to do that here.

Research globally shows that purpose-driven businesses attract and retain more engaged clients than other businesses. These clients are also more likely to become your advocates and refer others to you. The same research also points to higher employee engagement among purpose-driven businesses, which is a clear advantage underpinning sustainable growth.

2. Relying on discounting and promotions

Fair enough….discounts and promotions can attract new business and boost sales in the short term. However, if you find yourself in a constant discounting loop, odds are it’s a red flag. At the risk of stating the obvious, this approach erodes profit margins. That makes it difficult to reinvest in initiatives focused on growth, like new product development, marketing, or hiring additional people.

Instead, try to focus on building long-term client value.

Offering exceptional service and ensuring your products or services are delivered with high-quality built-in are no-brainers. Listening to your clients to understand what they value about their relationship with your business enables you to focus on what you do best, thereby cultivating client engagement. Focusing on real value helps you build a loyal client base willing to pay a premium for your offerings.

3. Prioritising revenue over profit

Top-line growth (increasing revenue) is important, of course, but it shouldn't come at the expense of profitability.

It’s totally possible for a business to experience rapid sales growth while still haemorrhaging cash.

This can happen for several reasons. It may be because the cost of acquiring new clients is high, or those clients you do have aren’t paying the right prices for the products and services they consume. Other contributing factors include operational inefficiencies or the lack of an appropriate pricing strategy.

graph showing a graph with bars and a line both travelling upwards
Sustainable growth relies on a positive relationship between revenue and profits

The easiest way to address unprofitable revenue growth is to focus on optimising your cost structure. Take the time to analyse your expenses, identify areas for improvement, and negotiate better deals with suppliers. Also, build a sustainable pricing strategy that factors in all your costs and ensures a healthy profit margin.

We’d also suggest some caution on the cost-cutting issue: you must be strategic about it. Cutting costs is enticingly simple but can create havoc. We’ve seen businesses cut large chunks of marketing expenses, cut investment in HR-related initiatives, and implement hiring freezes.

None of these random approaches end well. It should be like the carpenters’ creed….measure twice, cut once.

4. Chasing trends instead of building a core offering

It can be really tempting to chase the latest market trends. Or copy what your competitors are doing because it appears to be working. It’s sensible to keep an eye on and understand what’s happening in your market, but slavishly following every trend can be disastrous.

photo of woman in blue shirt looking confused

Spreading yourself too thin dilutes your core offering and confuses your target audience.

As discussed earlier, being clear about your “founding, non-financial business purpose” is key to staying on track. When you know with certainty why your business does what it does and can clearly articulate that to clients, employees and other stakeholders, it becomes easier to focus on what you really do well and what clients value. It also gives clarity when considering developing new products or services.

That means that rather than continually looking for the “latest shiny thing”, you can more confidently explore strategic opportunities that complement your existing strengths.

5. Neglecting your people

Sounds obvious, doesn’t it? You can’t neglect your people and expect sustainable outcomes.

As obvious as it sounds, though, according to Gallup’s 2023 survey, only 23% of employees globally are truly engaged at work. Your employees are the backbone of your business, and a happy and engaged workforce is essential for sustained growth.

However, there'll be consequences if you prioritise rapid growth without investing in your people.

Growth won’t be sustainable if your people suffer burnout, you have high turnover rates, or morale and engagement are low.

The first step in maintaining an engaged team is to understand what your employees really value and why they stay with you. You can only know this for sure by asking them, so investing time and effort (and relatively little money) in a focused employee survey is critical. We’ve written about this and you can learn more here .

There’s no argument: a motivated and engaged team delivers better client service, drives innovation, and fuels long-term, sustainable growth.

Beyond the signs: building sustainable growth

Identifying these warning signs is crucial, but it's only the first step. While we’ve provided a few tips above, you should do more work for the best results.

  • Conduct a thorough business evaluation: as your business grows it becomes more difficult for you as owner to stay across everything that’s going on. An in-depth evaluation covering key drivers helps you see what’s going well (that you should do more of) and where improvements could be made. Involving people from across the business in the process also allows you to identify and address any areas of misalignment.

  • Develop both a strategic and operational growth plan: we get it…planning is laborious. And you may feel that your time could be better spent. Nothing could be further from the truth. It’s essential to be clear on where you want to go with your business (your vision) and to create a roadmap and objectives with actionable steps to achieve it. It’s highly unlikely you’ll create sustainable growth without some reasonably detailed planning.

Sustainable growth is a marathon, not a sprint. By prioritising long-term stability over short-term gains, you can build a business that thrives for years to come.

chalk drawing of man climbing stairs toward the words "what's next?"

How's your business growth?

Not where you want it to be?

Perhaps a bit inconsistent?

A conversation with a GrowthCatalyst adviser could be just what you need to get you on the road to long-term, sustainable and profitable business growth. And keep you there.

Contact us to arrange a face-to-face or virtual conversation.

Alternatively, you can book a time for an initial discussion here.


In other news...

GrowthCatalyst has joined forces with a number of like-minded professionals to form the advisory group Konektis (check us out here). Collectively, the Konektis team provides integrated, multi-disciplinary advice to SMEs to deliver a "one strategy" outcome.

Take the Konektis Pulse Check and receive immediate, actionable ideas to grow your business.


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