Business Ideas from Finally Fast
The process of setting sales goals for your business is often challenging, as it involves marketing strategies, participation from multiple departments, and employee morale. But a simple approach to this challenge is to actually determine two sales goals — a “survival goal” and an “optimum goal” – and articulate these goals through the formulation of a sales plan, which is a strategy to achieve these numbers.
First, determine a survival goal. A survival goal is the sales number your business must achieve in order to break even. To set this goal, consider how much in sales you need to close in order to support your company’s production costs for this year, including materials and labor costs. Then add to this figure your estimated marketing costs for the year. It’s often more expensive to advertise your product or service than it is to produce it.
Next, determine an optimum goal. An optimum goal is the sales number you would like to achieve with your business in a perfect world, regardless of available market share or any other factors. The main benefit of identifying an “optimum goal” is to motivating yourself to think bigger and come up with new marketing strategies.
Third, carefully develop a sales plan with benchmarks that illustrates exactly how this growth in business is going to happen during the year. The sales plan will provide a 12-month road map that lays out sales goals such as how a salesperson plans to generate leads, contact customers, follow up with those customers, and produce sales growth. The level of growth that is considered reasonable will vary depending on the age of the business, the type of industry and how well your business is run. The plan should also cite who is to be held accountable for the growth throughout the year.
You may even determine that your business is not going to generate your goals as is. What’s going to give you the leg up? Do you need a larger sales staff? Do you have to merge with or acquire another business? Do you need another sales contract? Acquire better facilities or more warehouse space? Perhaps you need a better system for generating leads, or more products and services to sell or perhaps better internal administration. This planning phase is arguably the most important part of the process, as it will most likely put your people, cash flow and other resources under enormous pressure. Failure to achieve the goals can be devastating to the business, your credibility and the confidence of the people within the business.
Finally, distribute copies of the sales plan to everyone that will be held accountable throughout the year so they can refer to the plans and achieve the projected goals.