What to do when you find your business at that critical inflection point

The majority of SME founders find themselves at an inflection point at some time in their business life cycle. Usually this point comes as their product or service lifecycle starts to mature and struggles to hold pace with other, newer businesses on the market.

More often than not, founders of SME’s have been specialists in their field with a great idea for a product or service but as they set up a business they eventually find that they need to learn the rest of skills required to run a successful company - often these skills are a time consuming distraction away from what they love doing best. In order to scale, they bring in a management team who help grow a successful business and one day they arrive at the plateau stage in the life cycle curve. As you approach the end of the plateau stage, it’s time to make some important decisions.

The business has reached a strategic fork in the road and a decision needs to be made on where to take the business and how to get there. Often founders consider the following options:

1. Create an exit strategy and sell the business while it still has value in the market.
   
2. Develop new product features, services or capabilities to try and remain competitive.
   
3. Implement a new customer acquisition campaign and attempt to improve market share.
   
4. Increase the price of the product offering and hope that it doesn’t impact customer retention too badly.
   
5. Create new revenue streams by charging customers for services that were previously included in their pricing.
   
6. Take more impactful and drastic organisational measures to reduce costs and bolster margin.
   

All of these options have their merits and are sure to deliver an uptick in revenue in the short term but what happens if you are in this for the long haul or you don’t want to sell your company at a lower valuation than you feel you deserve? (after all, you’ve put blood, sweat and tears into building the business, why should you not maximise your profit when you sell?)

Instead of implementing the short term measures above you need to do the following:

1. Reinvigorate your business with a compelling and audacious business vision.
   
2. Re-engage your customers and develop a new success strategy that helps you stand out from the competition.
   
3. Improve your value proposition to boost revenue and retention.
   
4. Develop a commercial strategy that is geared towards maximising ARR.
   
5. Raise the profile of your business across the wider industry.
   

When you have spent so many years, deep in the weeds, building your company, it can be difficult to step back, take an objective view and come up with a strategy for success. If you find yourself in this position, reach out, contact me directly at: tim.rentowl@adcinnovations.co.uk and we’ll see what we can do to help you take the right course of action when you reach that difficult fork in the road.