What is the S-Curve in business?
A business doesn’t always grow in a straight line, rather it tends to follows a specific curve. Understanding the S-Curve will help you achieve long-term growth and success.
When a small business owner has a great product that customers love, their business starts to really grow and take off.
The larger the business gets, though, the more time is required for the owner to work on the business, which results in less time refining the product or serving customers.
This is where many small businesses begin to plateau or decline.
And it's predictable. It's called the “S” curve, or Success Curve...
What is the S-curve?
A small business doesn’t always grow in a straight line, rather it tends to follow a curve like the one below.
The business climbs, then dips, then climbs again.
Surprisingly, that dip is usually caused by success! Here’s why…
In the startup phase, a business is focused largely on developing its products and services. As word spreads, happy customers begin lining up to do business — so far so good. The business enters the first growth phase.
The problem is, while the person who started the business may know a lot about their products, they don’t know much about running a business.
Michael E Gerber in his book The E-Myth refers to this as "the fatal assumption", and it's the reason most businesses end up failing to begin with.
It’s at this stage, growth begins to flatline, or even dip. The s-curve begins.
Sadly, only a small percentage of entrepreneurs really learn how to grow a business and experience the subsequent rise in growth.
Growing beyond the curve
Every business reaches a point where it needs to embrace significant change in order to move to the next stage of growth. That change could be the way it delivers its products, or the way the business is run by the leadership. Or a handful of other things.
Every business is different and so are the technical, managerial and entrepreneurial skills of each business owner leading the change.
While there’s no simple answer to navigating the s-curve there are a few things entrepreneurs can do to avoid a success decline and continue to lead their business to the next growth phase:
Be aware.
The first thing a leader must do is be aware of where the business is and where it’s heading.
Is your business just getting started, in a growth phase, or has it been in decline for some time now?
Is the path you’re on sustainable? Do you feel like you’ve ‘hit a wall’ within yourself or your team? Are you running the business, or is the business now running you?
Embrace change.
Business owners must learn how to grow a business beyond themselves, and not just work in the business (the technical work) but also work on the business. This can feel scary at times because you’re stepping well outside your comfort zone. Get used to that feeling.
In the S-curve illustration above, the ‘inflection point’ is the moment where a business experiences significant change, which can be challenging but also presents a wonderful opportunity to evolve and continue onto the subsequent growth phase.
This requires having a plan and a team. Which leads to…
Invest in your team.
To change your business requires new thinking, new expertise and new skills, across the different areas of your business.
All that requires a great team.
A Business Coach is one of those great people to have on your team. They can help develop the business and you — its leader, so that you don’t get stuck in the S-curve.
One of the benefits of a Coach is that they're operating outside your business, so they can see things from a fresh perspective.
A coach also brings a set of valuable skills, tools and proven frameworks to install in your business, so that it continues to grow and succeed long-term.
At Leader Guide, our one-on-one Business Coaching program exists to make that secondary rise of success easier.
When you partner with a Leader Guide Coach you can rise through the success curve and lead a thriving business that provides a terrific life for you and your family.
Written by Lachlan Nicolson.
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