How Do I Break Through a Sales Plateau?

How Do I Break Through a Sales Plateau?

A reader from Sarasota asks:

“We have been in business for over 10 years. It’s a family business with my son in it, and I’d like to bring my adult daughter into the business. However, sales growth has stalled for the last two years, and there’s barely enough to pay my son, our three employees and myself a salary. How do we break through a sales plateau and get to the next level, so I can provide a future for my daughter, also?”

  –  Marcia from Sarasota, Florida

Ah, the dreaded sales plateau. It’s like you’ve hit a ceiling. Pushing through is hard — but you can do it.

While the barrier to sales growth may seem impenetrable, recognize that stalled sales are an utterly normal occurrence.  Many small businesses and family businesses encounter sales plateaus at multiple times in their history.

Applying determination and a plan, even a small family business can break through a sales plateau.

How to Break Through a Sales Plateau

The key is to create a plan and work your plan. To break through a sales plateau, there are five steps:

1. Set a Sales Goal to Achieve

It’s not enough to say you want more revenue. Give yourself and your team a target to work toward by setting a sales growth goal. It should be a SMART goal: specific, measurable, achievable, realistic and timely.

Here’s an example of a SMART sales goal: We will increase sales by 5% or an extra $80,000 per year, and reach that level by March 1st of next year.

Notice that the above goal is specific in dollar amount. It’s timely because it has a date for achieving the increase.  It’s also achievable and realistic, with an increase of just 5% over existing sales — not some overambitious jump such as attempting to double your revenue. Plus, it doesn’t assume the increase will come overnight, but sets a future date to allow time to ramp up.

And because the goal is specific, you can measure progress.

2. Break Down the Annual Goal into Smaller Weekly Goals

Estimate exactly how much more sales volume per week it will take to achieve your  annual sales goal. This breakdown is an important step that will help you make detailed plans.

For example, getting to an extra $80,000 in annual sales will require you to close roughly $1,539 more in weekly sales.   ($80,000 divided by 52 weeks = $1,538.46)

If you run a business with heavy seasonality, you will need to close more sales during peak periods to meet your annual goal. The following example of a seasonal business assumes you might have to close at least twice as much extra in sales during peak weeks, versus off-peak weeks:

26 peak weeks x $2,077 = $54,002

26 off-peak weeks x $1,000 = $26,000

$54,002 + $26,000 = $80,002 Annual Sales Increase Goal

Whatever your seasonality pattern, you want your weekly goals to match. This will help make your plan achievable.

3. Assess the Best Route to Achieve your Goal

Once you’ve determined the dollar amount you need to achieve, now it’s time to assess the best way to reach that.

To grow sales revenue in a small business there are three main ways:

  • Raise prices
  • Sell more products or services to customers
  • Add new customers

Or you could do some combination of the above.

What will work for your business depends on many factors.  If you have a lot of competition and are in a price sensitive market, you may not be able to raise prices.  If your target market is limited by geography or other factors, you might find it hard to add enough new customers with your current product set.

Instead, you may need to offer new product lines or a related service. Or do some creative product bundling supported with incentives, to raise your average transaction size to gain the needed sales revenue.

These are the sorts of factors that will vary from business to business.

4. Brainstorm Ideas with your Team or a Mentor

It helps to have help with brainstorming ideas.  In a small business that has a team, the obvious brains to tap into are your employees.

Someone on your team may just have an innovative idea no one else has thought of.  Remember, your team knows your customers. Show them the goals, and ask “how should we get there?”

If you don’t have a team or if you want input from someone experienced in achieving growth goals, tap into a mentor.  Turn to someone you know or trust. Or contact a SCORE chapter to make an appointment with a counselor.

5. Work your Plan

Last but not least, you have to work your plan to break through a sales plateau.  This will require measuring progress each week to make sure you are on track. If not, you may have to adjust your plan.

It also requires persistence. Sales plateaus are so common because it’s not always easy to grow.  It is easier to stagnate.

It takes effort to break through inertia and grow. Remember the laws of momentum:  an object at rest tends to stay at rest. Your job as a growth-oriented owner is to push through inertia and get your business growing again.

Examples of Breaking Through a Sales Plateau

Here are two examples of how small businesses could break through stalled sales:

EXAMPLE 1 – Coffee Shop

You operate a coffee shop in a small town. You sell coffee and pastries, and are open from 6 am to 11 am. Your customers are local residents who live in the immediate neighborhood or those who pass by on the street on their way to somewhere else. So the size of your market is limited. You have a core group of loyal customers, but sales haven’t really grown in the past year.

To break through the current revenue plateau, you might have to do the following:

  • Add more breakfast food items. This would enable you to increase the average size of a sale, when customers choose breakfast sandwiches along with their coffee.
  • Raise prices. Business owners often have trepidation around raising prices fearing that customers will turn to competitors. Sometimes this fear is  unfounded. But it can be a real risk. You might test a price increase on one or two items and measure the results. If the price increase is absorbed readily, then raise prices on other items.
  • Stay open longer, and add to-go lunch offerings. You might extend your hours through to 2 pm, and add lunch sandwiches, packaged salads, fresh fruit, cookies, soft drinks and more.
  • Offer catering platters. This might increase sales enough to get to the next level.

EXAMPLE 2 – Manufacturing Business

You operate a light manufacturing business, creating small wooden decorative items. Your shop is fairly small, and your storage space in your current facility is limited. You have just enough room for 4 employees with a limited amount of space for raw materials and inventory. You could:

  • Increase manufacturing capacity so you can sell more product. Expand to a different facility, and hire more people. You might also have to find more space to store raw materials and inventory. Or find a partner such as Amazon Fulfillment where some of your inventory can be stored.
  • Branch out with an innovative service of some kind, such as offering classes for people who want to learn crafts. It wouldn’t require expanding facilities because you’d hold them offsite. You could even offer online courses. And you’d still be tapping into your company’s basic expertise of creating decorative items.
  • Raise wholesale prices. If you raise prices by 5% it might get you over that revenue hump, provided you haven’t negotiated strict pricing deals that prevent  increases.

Each small business is different, so you have to consider your business’s situation and what will work best in your market. Good luck.

All answers to reader questions come from the Small Business Trends Editorial Board, with more than 50 years of combined business experience. If you would like to submit a question, please submit it here. 

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.