Plan for Next Year, Starting with Next Quarter
As a small business owner, you likely have a critical sales target that you want or need to achieve next year. This number may be framed in terms of revenue, customer accounts, new territories, or some other metric.
Still, the underlying challenge is the same - how to break down that overarching goal into concrete, actionable steps?
The universal truth is that your "number" is composed of various moving parts and components. Understanding these individual factors is key to devising an effective sales strategy and forecasting model.
So let’s discuss not just how to understand what you need to do, but actionable steps you can take to put it all together for your best sales quarter yet!
Understanding Your Business Components
To really crack the code of effective sales forecasting, budgeting, and quota-setting, you need to dig deeper into what drives your business. Start by looking at the different market segments that impact your revenue targets.
If you’re in a professional services business, for instance, the productivity and performance of these segments can vary widely, and that can have a big effect on your overall results.
Don’t forget about the geographic territories where you operate. The performance in these areas can also play a crucial role in hitting your goals. Plus, it’s essential to recognize that not all of your sales reps perform at the same level.
Some may consistently outperform others, and understanding these differences is key. It’s much more helpful to see your goal as a collection of moving parts rather than just one big number.
Breaking down your "number" into its component parts is a smart move. Look at revenue by product or service; this gives you insight into what’s working and what might need a little extra attention. And let’s not overlook individual rep performance—each salesperson has their own strengths and weaknesses.
By understanding these nuances, you can create a more realistic and achievable plan that sets everyone up for success. So, take the time to really understand these components; it’s the foundation for crafting a solid quarterly plan that aligns with your overall business objectives.
Crafting Your Quarterly Plan
Here are ten steps to create an effective quarterly plan:
Analyze Past Performance: Review your previous quarter's results to identify trends and areas for improvement.
Set Realistic Goals: Based on your analysis, set achievable targets for the upcoming quarter.
Break Down Your "Number”: Divide your overall goal into specific targets for each component of your business.
Account for Team Capabilities: Recognize that a brand-new sales rep will likely contribute less to your overall target than a seasoned veteran with deep industry experience and an extensive network.
Create Individual Quotas: Set personalized quotas based on each rep's experience and past performance.
Develop Action Plans: For each component of your business, create specific strategies to achieve your targets.
Allocate Resources: Ensure each area of your business has the necessary resources to meet its goals.
Establish Metrics: Determine how you'll measure progress towards your goals.
Schedule Regular Check-ins: Plan for frequent reviews to monitor progress and make adjustments as needed.
Prepare for Contingencies: Develop backup plans for potential obstacles or missed targets.
Avoiding Common Pitfalls
When it comes to setting your quarterly plan, there are a few common pitfalls you’ll want to steer clear of. One major mistake is equating all sales roles equally. This can lead to unrealistic expectations and disappointment, especially when you consider that each team member brings different strengths and levels of experience to the table.
“It’s crucial to recognize that a seasoned sales rep will likely contribute more than someone who’s just starting out. ”
Another trap is relying on broad, sweeping targets that don’t take into account the unique realities of your business. Instead of setting vague goals, focus on creating sales forecasts, budgets, and quotas that are grounded in the specifics of your operations. This way, you avoid overwhelming your team with arbitrary or unattainable goals, which can be demoralizing.
Finally, don’t shy away from embracing the complexity of your business. Understanding that there are many moving parts is essential for success.
When you take the time to appreciate these complexities and recognize the individual components that drive your success, you’ll be much better positioned to build a roadmap that not only helps you achieve your "number" but also sets you up for exceeding it.
Putting it into Action
By taking this granular approach, you can create sales forecasts, budgets, and quotas that are grounded in the realities of your business. This, in turn, empowers your sales team to focus on the activities and strategies that will truly move the needle, rather than feeling overwhelmed by an arbitrary or unattainable goal.
Ultimately, cracking the code of sales forecasting, budgeting, and quota-setting is about embracing the complexity of your business, not shying away from it. When you truly understand the individual components that drive your success, you can build a roadmap to achieve your "number" - and exceed it.
Remember, this process is ongoing. Regularly review your plan, adjust as needed, and always keep your eye on the bigger picture of your business's long-term success.