Sales growth is the percentage change between two sales figures, calculated as (Ending Sales − Starting Sales) ÷ Starting Sales × 100. If sales rose from $40,000 to $50,000, that’s a $10,000 increase and 25% growth.
How to calculate sales growth
- Enter your starting sales for the earlier period.
- Enter your ending sales for the later period.
- Read both results — the dollar increase and the percentage change.
Use the same length of period on both sides. Comparing a full quarter against a single month produces a growth figure that means nothing.
What is a good sales growth rate?
It depends heavily on your industry, size, and stage — a mature business and an early-stage startup are not measured against the same bar. As general guidance:
| Annual growth | Typically indicates |
|---|---|
| Negative | Contraction — worth investigating before the next cycle |
| 0–5% | Flat; often tracking inflation rather than real growth |
| 5–15% | Healthy, sustainable growth for an established business |
| 15–30% | Strong expansion, usually needing added capacity |
| 30%+ | High growth; common early on, hard to sustain at scale |
One period tells you little. A run of three or four consecutive periods is what reveals a trend.
Sales growth vs revenue growth
Sales growth tracks income from selling products or services. Revenue growth covers all income, which can include interest, licensing, rentals, or one-off gains.
For a business whose only income is sales, the two are identical. Where other income exists, revenue can climb while sales stay flat — which is why lenders and investors usually want both figures.
How to calculate growth over multiple periods
The percentage above compares two points. To annualize growth across several periods, use the compound annual growth rate:
CAGR = ((Ending Sales ÷ Starting Sales) ^ (1 ÷ Number of Years) − 1) × 100
Sales rising from $100,000 to $150,000 over three years is 50% total, but about 14.5% per year compounded. Quoting the 50% as an annual figure overstates performance by more than three times. The same compounding logic drives our holding period return calculator.
How to project future sales
Apply an expected growth rate to your current figure:
Projected Sales = Current Sales × (1 + Growth Rate) ^ Number of Periods
At $50,000 with 10% expected annual growth, year one is $55,000 and year two $60,500. Base the rate on your own historical growth rather than a target, or you’ll build a budget on optimism. For pure percentage moves between any two numbers, the price change calculator handles the same maths.
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