A reader from Sarasota asks:
"We've been in business for over 10 years. It's a family business with my son and I want to bring my adult daughter into the business. However, sales growth has stalled in the last two years and there is barely enough to pay my son, three employees and me a salary. How do we break through a sales plateau and take it to the next level, so that I can also offer my daughter a future? "
– Marcia from Sarasota, Florida
Ah, the dreaded sales plateau. It's like reaching an upper limit. Enforcement is difficult – but you can do it.
Even though the barrier to revenue growth seems impenetrable, you have to keep in mind that stalled sales are a completely normal event. Many small and family businesses encounter in their history several times on sales plateaus.
With determination and plan, even a small family business can break through a sales plateau.
The key is to make a plan and work on your plan. There are five steps to breaking a high plateau:
It is not enough to say that you want more revenue. Give yourself and your team a goal to work towards by setting a revenue growth target. It should be a SMART goal: specific, measurable, achievable, realistic, and timely.
Here's an example of a SMART sales target: We'll increase sales by 5% or $ 80,000 a year and reach that level by March 1, next year.
Note that the above target is in US dollars. It is timely, as there is a date for attaining the increase. It is also achievable and realistic, with an increase of only 5% over existing sales – not an overambitious leap, like trying to double your sales. In addition, it is not assumed that the increase will occur overnight, but will set a future date for the time to increase.
And because the goal is specific, you can measure progress.
Estimate exactly how much more revenue per week is required to reach your annual revenue target. This breakdown is an important step in allowing you to create detailed plans.
For example, if you want to earn more than $ 80,000 in annual revenue, you'll need to increase your weekly revenue by approximately $ 1,539. ($ 80,000 divided by 52 weeks = $ 1,538.46)
If you run a seasonally-dependent business, you'll need to make more sales at peak times to reach your annual goal. In the following example of a seasonal business, it is assumed that you will have to earn at least twice as much in peak weeks than in secondary weeks:
26 peak weeks x 2.077 USD = 54.002 USD
26 off-season weeks x $ 1,000 = $ 26,000
$ 54,002 + $ 26,000 = $ 80,002 target for annual revenue increase
Regardless of your seasonal pattern, you want your weekly goals to match. This will help to make your plan achievable.
Now that you have determined the dollar amount to be reached, now is the time to determine the best way to accomplish this.
There are three ways to increase sales in a small business:
Or you can perform a combination of the above actions.
What works 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 geographical or other factors, you may find it difficult to add enough new customers to your current product set.
You may need to offer new product lines or a related service instead. Or do a creative bundling of products that is supported by incentives to increase the average transaction size and generate the required revenue.
These are the types of factors that vary from business to business.
It helps to have help with brainstorming. In a small company with a team, your employees are the ideal contact.
Someone on your team might just have an innovative idea nobody else thought of. Remember, your team knows your customers. Show them the goals and ask how we should get there.
If you do not have a team or want contributions from someone who has experience of achieving growth goals, tap a mentor. Contact someone you know or trust. Or contact a SCORE chapter to schedule an appointment with a consultant.
Last but not least, you have to make a plan to break a sales plateau. You'll have to measure progress every week to make sure you're on the right path. If not, you may need to adjust your plan.
It also requires endurance. Sales highlands are so common because growing them is not always easy. It is easier to stagnate.
It takes some effort to break through inertia and grow. Remember the laws of momentum: A dormant object tends to stay calm. Your job as a growth-oriented owner is to overcome inertia and get your business back on track.
Here are two examples of how small businesses could break deadlocked sales:
You run a café in a small town. They sell coffee and pastries and are open from 6:00 to 11:00. Their customers are residents who live in the immediate vicinity or pass by on the way to another place on the street. The size of your market is limited. They have a core group of loyal customers, but sales did not really grow over the past year.
To break the current revenue plateau, you may need to do the following:
You run a light manufactory where you make small wooden decorative objects. Your business is quite small and your storage space in your current facility is limited. You have just enough space for 4 employees with little space for raw materials and inventory. You could:
Because every small business is different, you need to consider the situation of your business and the conditions that best suit your market. Good luck.
All reader responses come from the Small Business Trends editorial team with more than 50 years of combined business experience. If you want to ask a question, please send it here.
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