The Washing Machine Cycle
The 3-to-5 million plateau is a self-inflicted loop of spending your way to diminishing returns.
- Difficulty
- Easy
- Time to result
- ~months to results
- Steps
- 4
- Confidence
- 85%
Dawson names the 3-to-5 million plateau the 'washing machine cycle' — the business keeps banging around, taking something out and putting something in, going nowhere. It starts because the owner is good at the work, hires friends and family, and won't exert leadership for fear of upsetting them. To force growth they spend more on agencies, employees, and assets, but get diminishing returns, which breeds frustration, fear, and anxiety until they give up on getting big. The escape is not more spend but greater efficiency and higher-quality people who pull the business up.
Origin
Dawson observed the pattern statistically — roughly 92% of the 34.5 million US small businesses stuck at 3M or less with 12 or fewer employees — and in the language owners themselves use, describing it 'like rolling a huge rock up a big hill.'
Core principles
- 01About 92% of small businesses are stuck at 3M or less with 12 or fewer employees.
- 02The plateau comes from being good at what you do, then hiring friends and family and tiptoeing around leadership.
- 03Pushing growth by spending more produces diminishing returns, frustration, fear, and anxiety.
- 04The way out is efficiency and higher-quality people who pull the business up, not the owner shoving it up.
How to run it
- 1
Recognize the loop
See that you are spending more, hiring more, and buying more assets while profitability shrinks and stress rises — the cycle just keeps going.
Watch out As diminishing returns set in, owners get flustered, fearful, and anxious, then settle for what worked with the people it worked with.
- 2
Stop shoving the business uphill
Reject increasing cost, assets, and time as the growth lever — that is what wears owners out and rolls the rock back on them.
- 3
Slide to 5M on the same resources
Aim to reach 5M with the same people, assets, and resources you have at 3M by maximizing operational effectiveness.
- 4
Add people who pull, not that you push
Hire higher-quality people who execute without babysitting and who come alongside to pull the rock up the hill with you.
Pro tip Drafting behind committed people means the business pulls up instead of you shoving it up.
Watch out You can't do it with no accountability or discipline, and you can't do it by handing out bigger titles when you can't afford raises.
In the wild
Dawson notes stuck owners instinctively describe their business as 'like rolling a huge rock up a big hill' — because they are doing it alone on the strength of being good at the work.
→ Owners who instead surround themselves with committed people to pull the rock up break the cycle; those who keep pushing alone get the rock rolled back on them.
Common mistakes
Spending to force growth
Adding agencies, employees, and assets at the plateau yields diminishing returns and accelerates the owner's burnout.
Avoiding leadership with family hires
Hiring friends and family and then tiptoeing around them removes the accountability and discipline needed to grow past 3M.
Is it for you?
Best for
Founders trapped at the 3-to-5 million plateau.
Not ideal for
Businesses already disciplined on efficiency and past the plateau.
From the transcript
“I call it the washing machine cycle. It just keeps going.”
“You should be trying to slide to 5 million with the same people, the same assets, and the same resources you have at three.”
From the episode
Brandon Dawson: 97% of Startups Fail! How to Beat the Odds and Scale to 9 Figures
Brandon Dawson