3 reasons why SMBs hit a revenue plateau (and how to break through one)

Most SMBs eventually hit a revenue ceiling. Sales slow down, costs pile up, and growth becomes unpredictable. You’re doing the same things you did to get to this stage—but they’re no longer working. The business simply isn’t designed to scale.

Sounds familiar? If so, don’t worry—you’re not alone.

Hitting a revenue ceiling is normal. However, it doesn’t mean that your business can’t break through and reach £1M in revenue. This article explains three common growth traps that prevent SMBs from scaling and explains how to solve them, drawing on insights from our recent report ‘5 tips and tricks to becoming a £1M business’.

3 common SMB growth traps

Without the right systems in place, scaling can feel like running on a treadmill. You’re moving fast, but you’re not getting anywhere. 

Here are three common reasons SMBs hit a wall—and what you can do to solve them. 

1. You might be relying too much on a single growth channel

Did you know that according to a study by JDR Group, 42% of UK SMBs struggle to generate leads and convert sales? 

Unfortunately, in many cases, this might be because the business focuses too much on one single growth channel. When all your revenue comes from one place—whether that’s referrals, one big client, or a single marketing strategy—growth is fragile. The moment that channel slows down, so does your business. 

That’s why we recommend considering de-risking growth by investing in multiple acquisition strategies. For example, consider using both inbound and outbound marketing campaigns. 

Outbound efforts are likely better if you’re just getting started (as they deliver quicker revenue generation), but inbound marketing can play a huge role in ensuring long-term success. Publishing SEO content that puts your business at the top of SERPs will have a massive impact on your ability to attract customers. 

However, you don’t necessarily need to invest in every single marketing channel. Run tests to determine potential ROI before committing fully. Also, research competitors to see how they acquire customers. This will give you a good indication of which strategies might work for you too. 

2. You (the business owner) might be a bottleneck

If you’re a business owner, it can be hard to let go of control—especially if you’ve built the business from the ground up. It’s only natural that you want to oversee every single detail.

Unfortunately, if everything has to run through you, your business can’t grow beyond your capacity to manage it. 

Many founders stay stuck in the weeds instead of helping their company scale. They’re too busy handling sales, overseeing operations, and approving every invoice to take a step back and focus on strategic growth projects.

There’s nothing wrong with wanting to ensure everything goes smoothly. However, there’s a limit to how much one person can do. If your desire to be involved in every aspect of your business is stopping it from growing, then it might be time to consider an alternative approach.

For example, you can focus on delegating activities to members of your team. Show them exactly how you do something and ask them to do it in front of you. If they're comfortable with the process, you could let them take care of it going forward—without you needing to check their work.

You can also look to implement tools that automate manual financial tasks like invoicing or reconciling payments. According to Accenture, up to 80% of your business’s transactional work can be automated—for example, by using tools like QuickBooks Advanced. 

By offloading tasks to your team and automating repetitive processes, you can focus on what matters most: scaling your business.

3. Your financial systems might be slowing you down

In the beginning, SMBs can scale relatively successfully by focusing on sales rather than systems. However, without the right foundations in place, the more customers you acquire, the less time you might have to serve them. 

If your business has 5 clients, you don’t need to spend that long each month on invoicing. But what about when you have 20 clients? Similarly, managing cash flow is pretty simple if you employ one other person and have one shop. However, when you’re suddenly responsible for 10 peoples’ salaries and pay rent on multiple retail locations, the challenge intensifies.

This is especially true if you’re still handling your finances manually. If you’re manually tracking invoices, juggling cash flow with no clear forecasting, or scrambling to cover payroll each month, then scaling will only make things worse.

Or perhaps you’ve got a system in place, and it’s been there for a while. This is certainly better than having no tools whatsoever. However, it might be worth reviewing whether this solution is still delivering value. If you still have to spend considerable time using your tool, it  might be worth searching for potential alternatives. 

So, how can you build a financial infrastructure that scales alongside your business? 

Bear these recommendations in mind:

• Automate key financial processes

• Centralise financial data with tools like QuickBooks Advanced 

• Implement multi-user access and role-based permissions

• Plan for future financial complexity

• Work closely with your accountant

Creating a strong financial infrastructure ensures every pound is accounted for, every decision is data-driven, and growth is built to last.

Want to learn more?

This article has touched on just 3 ways SMBs hit a revenue plateau, and offered a few pointers to help you overcome this. However, if you’re looking to dig deeper into how to scale your SMB, then check out our latest report, ‘5 tips and tricks to becoming a £1M business’.

Looking to bust through your revenue ceiling once and for all? Download it here.

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