Why your small business isn't growing

You're working hard, the business is active, clients are being delivered. From the outside, things look fine.

But underneath that, something isn't working. Growth has slowed, the numbers aren't moving as expected. And more effort doesn't seem to change the outcome.

In this session, Mark Elliott explores why that happens.

Drawing on patterns seen across established and growing businesses, he looks at what actually sits behind stalled growth, and why it's rarely a lack of effort, ideas or capability.

Topics covered in this session

• Why effort has less impact as your business grows

• The difference between activity, progress and real growth

• How founders become the constraint (without realising it)

• What actually drives growth once early traction stops

• How to identify what's really holding your business back

About the speaker

Mark helps solo business owners overcome all the challenges that come with trying to start a business.

With more than 15 years of experience, he uses tools like the Lean Canvas, Customer Factory and RAISE goals to turn learning into action that sticks.

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Transcript

Lightly edited for clarity.

Ryan: Good afternoon, everyone, and welcome to today's Lunch and Learn. My name is Ryan, and I'll be your host today.

For those of you attending a Lunch and Learn for the first time, Enterprise Nation is a vibrant community platform for start-ups and small businesses.

Today, I'm pleased to introduce Mark Elliott, who is a leadership coach. In this session, Mark will discuss the difference between activity, progress and real growth.

As always, if you have any questions, post them in the chat and we'll do our best to answer them at the end. The webinar is recorded, so the recording and any further resources will go out later today. Over to you, Mark.

Mark: Thank you, Ryan. Always lovely to be introduced by you. Hi, everybody.

I'll just say that I'm deaf, so if you have any questions, do put them in the chat, or let Ryan know.

What are we going to explore today? I called this "Why your business isn't growing". What we're going to look at is what happens within businesses that start off well, have revenue, have plans and are doing things, but then find something stops their next-stage growth.

I'm not going to claim to understand what your next-stage growth is, why you want it, what your ambition is or what your position within the company is. But I am going to look at two or three things that may be a clue to how you can make something happen.

For those of you who haven't seen me before, I am a bouncy, lively business coach. I have been in business, around businesses, as a coach and as a business owner for what feels like forever. For 25 years, I've been involved in early-stage businesses.

I've been a business coach for 15 years, and I've been around start-up and scale-up infrastructure and ecosystems since 2005, which is 20 years.

I'm also the co-founder of Startup School for Seniors. We've been working with over 3,000 business owners aged 40 and over across the last five years. So I've worked very closely with business owners like you, helping people overcome issues within their business.

This is who I'm talking to today. If you're busy, your diary is full, clients are there and your business is functioning, you're in the right place. We're going to talk about how you go from being busy to not being able to do what you want.

As well as being a business coach, I should mention that I'm a business adviser on behalf of a number of London councils. I advise various kinds of businesses, including creative businesses, life sciences businesses and software businesses.

What I've seen with business owners who are looking to grow or take their business to the next stage is that when it doesn't happen, the signs are often similar. There's more to do, but revenue doesn't grow in the same proportion as the effort. Things take longer to happen. The business doesn't feel as smart, flexible or agile as it used to.

You might say: "When we're a team of five, everything takes slightly longer than when I did it myself. And when we're a team of 25, we need to get together just to see what everybody is doing."

But one of the key questions is: how do we break out of this cycle of working more to generate more revenue or working more to increase profitability?

I often catch myself hearing people say: "Maybe it's because I don't want this enough," or: "It's marketing's fault. It's my customer acquisition process. It's LinkedIn. It's that networking event."

But in general, with businesses with £100,000 turnover and over, it's not really about motivation. It's not really about marketing. It's usually something structural that needs to change between how the business was and what the business is going to become.

Businesses often can't grow because, in that shift, you as the business owner are used to doing everything. You had to at the start. You were the only person.

But one thing that needs to shift is taking some of the decisions away from yourself and easing the decision burden within your organisation.

There's easing the decision burden. There's ensuring that the quality of your client acquisition, delivery and client relationships doesn't always have to come back to you.

And while you may have been the first grown-up in the room, you're not the only grown-up in the room. Other people can solve problems too.

When you started the business, whether on your own or with one or two people, you were also likely to have made every single sale. But one of the things stopping your business growing is that you haven't relinquished some of those roles. You haven't simplified some of the things you don't need to do on your own anymore.

So it's not just a growth issue. It's a structural capacity problem. It's not necessarily that your current headcount can't create more revenue, deal with more clients or deliver more profit. It's about building the capacity within the existing team to allow that growth to happen.

One of the things I want to talk about today is how decisions are made within your organisation.

One model I've found useful with next-stage companies is splitting decisions into three types.

The first is delegated decisions. These are decisions with boundaries, or decisions where you hire somebody to do something and pass responsibility for that over to them.

But many people, when they hire their first staff or bring in subcontractors, get them to do tasks. They don't bring them on to make decisions.

So one key part of the model is delegated decisions. You may have delegated the tasks, but have you specified the decisions they can make?

The next kind is guided decisions. These are decisions with boundaries, where other people can make decisions within those boundaries.

Expenses are a classic example. Business expenses or strategic expenditure might be approved by the person responsible for that area of the business up to a certain limit.

So define those boundaries. Define who can make those decisions, who can approve spending and who can approve certain actions. Setting those boundaries is useful for easing the decision-making burden.

There may also be decisions that are only yours.

So easing the decision-making burden means defining who can make decisions, which decisions have boundaries, which decisions are guided and which decisions only you make.

Being clear with your staff about what they can do, what needs to come to you and when that happens will help ease the burden of managing the whole company.

What we're looking at here is unsticking growth within your business. One way to do that is to build space for you, as the business owner, to be effective in what you're doing.

So I invite you to specify the decision-making model that you use within your business. It doesn't need to take long. It might take one or two hours, but it is useful.

The decision model will help ease the burden for you. But another big step is asking: where are you still required within your business where you don't need to be?

What are you still doing that needn't be just you? As the founder, operator and linchpin of the business, you are probably still doing more than your business deserves.

Other people are going to be able to do more things than you do.

Why do I ask that question? When it comes to scale and growth, you can't scale effort. You can hire more people and deliver more effort. You can ask for more hours, although I wouldn't recommend that. But effort itself has limits.

There are limits to the amount of time you and your staff can give. If you work seven days a week, don't. You won't be able to continue with that.

Energy has limits too. Some people feel they have boundless energy, but in general, unless you're super neurodiverse, you won't have boundless energy unless you manage it in the way you need to.

Effort also needs our attention, and that attention needs to be in the best places for business growth. So you can't just add more effort and expect the business to grow.

Sustainable growth, growth that works for everybody in the company, needs clear decisions, defined processes and well-known priorities.

I'm a model man, and one thing I've found works for companies I work with is to identify what the next stage of their business will look like.

What you do as a service company or product company may be replicable. You may do broadly the same thing for different clients, and you can do it again.

What you do may be repeatable. You take something from the shelf and deliver it for another client.

Or it may be scalable, so you can have multiple clients who are supported in receiving the service by a smaller and smaller percentage of staff.

So think about the growth ladder. Does your service or business deliver replicable activity? Does it deliver repeatable activity? Or does it deliver scalable activity?

Many people say they want scalable. But do they? We talk a lot about scalability because it's fashionable and on trend. But actually, many people are talking about repeatability.

They want a business they can repeat, that they can be comfortable with, be confident about, be experts in and deliver with increasing profitability using their existing staff, or perhaps a slightly bigger team.

Many people talk about scalable, but most service businesses are repeatable at best.

So how do we become scalable if we want to become scalable? Or how do we become repeatable if that's not actually how we operate?

I have another simple model: clarify, simplify, multiply.

Review what actually creates the profit within your business.

Clarify what it is about what you do that is valued by clients. Clarify how clients find you and what your customer journey is through to your most profitable clients.

Simplify is about removing complexity and friction from the ability to both recruit new clients and deliver high-quality, high-value products and services to them.

That probably means getting rid of fancy bells and whistles that cost staff time and don't add value, or aren't actually valued by customers. That's more common than you think.

When we've clarified what creates value, and when we've simplified and probably documented and automated the processes that attract and deliver to clients, then we can multiply that.

So we deliver a simplified, more valuable and more profitable service to our clients, and find more of them.

Clarify, simplify, multiply is a three-phase process I've used successfully with many clients over the years.

What does that look like in practice?

When I first started working with Jay, she came to me because she wanted to work on her sales. She thought she had a client acquisition problem, but it became obvious to me that she had capacity within the organisation. She worked with a number of contractors. Everybody was busy, and she was able to attract clients.

But the real problem was that she was acting as a single-person company with helpers, rather than a multiple-person company.

Once we worked that out, we clarified what happened within the company that generated the maximum profit. We simplified the company's ability to attract those clients and deliver value to them.

That meant the company became much freer and easier. Jay was able to get out there and cherry-pick the clients she wanted. She turned most of her clients into retainers, and she was able to manage those retainers. Her contractors were able to take responsibility for the delivery.

So she was set up to attract more clients much more simply than she thought, by doing exactly what she did, but pushing responsibility downwards and clarifying and simplifying her work.

That was brilliant for Jay. She became so comfortable with her business that she was able to take on more permanent staff, which we always like.

Another client, Nigel, felt stuck. He was stuck with his first clients. The first clients he found were the only clients he had, and they were the ones he felt he ought to be finding again.

But when we reviewed what was happening, we discovered that the 80/20 rule was really in place. Eighty per cent of his income came from 20% of his clients.

By understanding who the 20% were, we were able to clarify who they were, what they valued and what they paid for.

That meant Nigel understood much better who his most valuable clients were. In his new processes, his existing VA could pre-qualify leads, so she was only setting up meetings that led to valuable and profitable clients, rather than discovery calls with people who weren't likely to become profitable clients.

So Nigel now has a multi-person business that can deliver value to higher-value clients, rather than feeling stuck and unsure how to get to the next stage.

I have a question for you: if nothing changes in your business, what will your business look like in 12 months' time? If nothing changes, what will your business look like in 12 months?

The key things to change are these.

Look at your decision-making. Split your decisions into only you, guided or boundaried decisions, and delegated decisions.

Look at the growth ladder. Is your business replicable with bespoke work? Is it repeatable with repeatable work? Or is there a part of your delivery that can become scalable with automated processes and automated delivery?

And consider whether clarify, simplify, multiply would work for your business as a guided process.

If you'd like help with that, I've created a simple scorecard-style checklist that helps you identify the most effective thing you can do to become unstuck within your business.

Have a look at that scorecard or connect with me on LinkedIn. I'll take any questions.

Ryan: Brilliant. Thank you, Mark. Great session as always.

We have a couple of questions. What would you say the earliest warning signs are that a business may be entering a growth plateau rather than experiencing a temporary slowdown?

Mark: I would say a temporary slowdown is a growth problem. They're about the same thing.

Growth is about an increase in activity. Slowdown is about the value of that activity.

If your new client growth is being matched by clients leaving, or if clients leaving is greater than your growth, then that's a sign to look at your client acquisition process or delivery process.

Remember, old clients can become clients again. You can re-attract clients to your business by getting back in touch with them, or inviting them to refer you if that's something they can do.

Many businesses have had a tough first four months this year. Confidence hasn't been great. Some of this is about the market.

But this is an ideal time to sort your business out so that when the market does pick up, you are perfectly placed. Your business will be more agile for the future than it was for the past. Now is the time to make your business more agile.

Ryan: That's very helpful. Thank you, Mark. Mohammed has said in the chat that the QR code doesn't work.

Mark: Okay, that's not good. I'll get the URL for you and pop it in the chat. Hopefully, that works. Alima has said it works, so it might just be a delay.

I'll also send the corrected QR code out with the recording. I'll get that over to Ryan.

Ryan: Thank you, Mark. We'll do one more question before we go.

If you had only one hour with a founder whose business had stalled, what questions would you ask first to identify the constraints?

Mark: Who's your best client? What's your best client type? I would ask: what do you know is working within your business?

When they talk about best client type, I would generally allow them to talk and then ask: are they your most profitable clients?

Understanding profitable client types as well as best client types is useful. What's working within the business? What do you know isn't working within the business?

Those are the three questions I would ask in the first quarter of the conversation. Then we would look to uncover the first steps they can take, that they already know they can take, that will really turn around their business.

It is possible to turn around your business in just an hour if you haven't spoken to anybody before.

Ryan: That's very helpful, Mark. Thank you.

Brilliant session as always. Someone has just said it seems to be the checklist that's not downloading. The QR works, but the checklist isn't downloading.

Mark: You need to give your email. It's a quick scorecard. You give me your email, then you can download it.

If that doesn't work, DM me on LinkedIn and I'll send it over. If you follow me on LinkedIn, I'll be publishing the checklist over the next couple of days as well.

Ryan: Amazing. I've popped Mark's LinkedIn URL and Enterprise Nation profile in the chat, so do connect with Mark.

Drop him a message afterwards if you were having issues with that checklist, and follow Mark on LinkedIn.

Another great session as always, Mark. As I said earlier, we're recording this and we'll send it out later with any further resources.

There's some great feedback coming in, so thank you to everyone for joining. And a big thank you to Mark again for hosting.

Mark: Fantastic. I look forward to continuing the conversation with you. See you.

Ryan: Thanks, Mark. See you later.

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