Kickstarting your stagnant business

Stagnation is the death knell for businesses. It's the single most dreaded word among business owners and can strike anyone down, irrespective of how long they have been around or how big they are. The impact of stagnation on business can be severe, almost like the flatline on a heart monitor. You know a business is stagnating not only when its revenue remains the same year after year but also when they repeatedly expand and shrink without any real growth.

To avoid this scenario, one needs a business restructuring strategy in place with alerts for timely warnings and a contingency plan before stagnation sets in. Alternatively, you could apply a solution for a stagnant business after the event.

Mitigating stagnation would require certain fundamentals being in place, which you will not deviate from. The first is a commitment to growth by providing value to your customers rather than a price reduction. Apple is the perfect example of such a commitment.

Secondly, focus on increasing revenue rather than cutting costs. Optimizing costs rarely drives profitability; instead, it could have the contra effect of depleting the value offered to customers, impacting revenues adversely. And third, is the commitment to innovation irrespective of the state of the economy. This not only ensures relevance in a dynamic marketplace but also discovering new revenue streams, which is key in overcoming business stagnation.

A post facto fix of stagnation requires a different set of tools, often involving a thorough business restructuring strategy. It needs to start with a thorough and honest evaluation of your current practice. An internal audit that covers all areas - product, operations, cash flow, sales, marketing, employees, and customers - to uncover where the blockages are.

Once you understand the problem, the solution for a stagnant business will appear; however, in most cases, the solution is usually a rethink. A rewiring of the business is dictated by where and how the revenue stream is flowing and where and how its not. When Apple was three months away from being shut down, it did a complete rethink to finally emerge as a trillion-dollar company, hence successfully overcoming business stagnation.

The most critical factor in any plan to overcome stagnation is the people who run your business. Steve Jobs had a Bozo alert, and Mark Zuckerberg hired on attitude rather than a diploma. You will need to be ruthless in your assessment of who is hurting the business and who is not and take measures to ensure productivity.

At the end of the day, the impact of stagnation on business is usually a result of more of the same. Constant innovation is actually the prevention and the cure.