Starting a small business is exciting. While there’s much legwork and planning involved, the stress and effort often feel worth it when you see rising sales figures and increasing profits. When a period of stagnation strikes, however, stress builds, causing even the most successful entrepreneurs to question the path forward. If you feel like you’re in those shoes, you're not alone. According to the May 2024 National Federation of Independent Business (NFIB) survey, the Uncertainty Index rose to the highest level since June 2020.[1]

Whether it is a macroeconomic slowdown or something unique to the industry or geography in which you operate, a period of earnings plateau is a natural phase in a small business’ life. It's normal to feel anxiety when it happens, and reminding yourself that ebbs and flows will occur is crucial. You often must press ahead to develop and implement. For example, a strategic business plan has the potential to reignite confidence in your venture and could set the stage for your company’s next chapter.

The Struggle Is Real

Life is rarely certain and never easy for small business owners who seek to expand. When times run lean and revenue growth dips, it's important not to panic. Instead, consider turning on your business’ afterburners. Here are some recommendations for the best steps to reinvigorate your firm.

1. Step back and assess your spending situation

Consider conducting an in-depth analysis of business finances, which can uncover areas where you might be misallocating resources. The goal is not necessarily to cut back on all operational facets but to identify problem spots and discover high-potential investments. Start by digging into your financial statements. Are there telling trends in your income statement? For example, is the balance sheet not as strong as it was a year ago? Is liquidity being drained via increasing cash outflows versus inflows?

While this first step may sound daunting, that’s where a banking professional may likely help by serving as a valuable partner in your investigation. Bank expertise, insights, and technological tools are invaluable if you want to get your business moving up and to the right.

2. Consider tapping into the gig economy

Investing in full-time workers when times are tight is sometimes a risky proposition. Rather than devoting time, energy, and money to permanent talent, consider if leveraging the large number of gig workers might be right for you.

Freelancers, part-time workers, and contractors can step up to the plate quickly without demanding a long-term commitment. Among the best ways to boost net income is to grow at scale – the flexibility of on-demand labor might serve as your secret weapon.

3. Invest in tech upgrades

Sometimes a business slows not because of weaker economics or waning demand for products or services, but rather due to capacity constraints. Bringing on additional workers might only go so far in turning sales higher. Technology, however, has the power to boost your top line without greatly impacting the expenses side of your income statement.

Evaluating your current tech stack could be a good first move before putting dollars to work. The goal is to drive efficiency and increase competitiveness. Upgrading to a better CRM system, offering flexible payment options, taking advantage of new customer experience apps, or leveraging AI-driven capabilities are just some examples.

4. Revisit the business’ pricing strategy

Volatility in the costs of raw materials, wages, and even financing can wreak havoc on the optimal prices your company charges for goods and services. It’s often hard to grow at a fast and sustainable pace without commanding a beat on your pricing strategy. Consider conducting market research and analyzing real-time price trends to understand where your business ranks compared to competitors.

Additionally, consider how sensitive your customers are to current prices. It may be advantageous to implement a dynamic pricing model (which might require an up-front investment in tech) that could lead to better sales as the market cycle evolves. Another tip? Weigh the pros and cons of tiered pricing to potentially attract different customer demographics. The bottom line is that flexible pricing could make your business agile and well-positioned to thrive.

5. Build a “big brand” presence

Marketing is often more important than ever when it comes to standing out from the crowd. How the marketplace perceives your business is sometimes just as important as the consistent value you deliver. We live in a digital world, and a strong online presence is often table stakes in the current economy. Perhaps it’s time to refresh your brand presence.

A revamped website, more social media interaction, launching a customer loyalty program, and even communicating your company's story and mission can help build your reputation. As word gets out and the business becomes more recognized, you might just see your sales pick up simply as a result of building your brand.

Investing In the Future

Taking your small business to the next level often requires a steadfast commitment and willingness to be bold. A reputable business bank may be able to help you secure the financing you need to spur new growth. Some examples:

  • An unsecured small business loan could be the right fit if you seek capital for a variety of purposes.
  • A secured small business loan is often ideal for one-time business expenses that require longer-term financing, such as property, plant, and equipment capex.
  • Small business commercial real estate loans are available from some banks from $100,001 and up to cover mortgage-borrowing needs.
  • A secured vehicle financing loan for new or used passenger vehicles for business-use purposes.

Business loans, lines of credit, invoice financing, and equipment financing are potential funding resources at your disposal to breathe new life into your small business.

Ready, Set, Grow

When your business stops growing, it’s no time to fret. Often a measured approach, including evaluating your expenses, leveraging flexible labor, investing in your tech stack, analyzing price trends, and owning your brand can all be part of a strategic growth plan to overcome flat-lining sales. Reach out to one of our PNC banking experts for help tapping financial resources, such as the right loan type, which might provide the critical capital needed to push forward.