Revenue growth is vital to your small business. Setting sales goals lets you monitor progress, develop focused selling strategies and improve overall performance. Your objectives motivate salespeople and provide accountability, allowing you to give individuals and teams better support.
Your sales goals should be viable yet challenging and break down into smaller objectives relating to specific sales activities. Ensure revenue growth with structured goal setting that delivers incremental wins at the team and individual level. Take these steps to set goals, track progress and hit milestones.
Identify baseline and profitability objectives
How much annual revenue from sales do you need to stay in business? Your baseline or break-even point accounts for all financial obligations, including operational expenses and salaries. It represents the minimum number of sales you need to balance your books.
From there, think about how much revenue you’d like to earn above the break-even point. Profitability goals can be expressed as a percentage or dollar amount. Use hard data to set profitability goals, such as sales records, historical growth rates and direct competitor performance.
Plus, consider your market growth rate, recurring customers and current sales activity and resources. You may want to increase sales by 50%, but this figure could require adding more salespeople and resources, affecting your baseline number. Combine your annual baseline and profitability figures and divide by 12 to determine monthly revenue goals.
Consider using forecasting tools to predict income by month more accurately. Templates or sales technology software can better account for seasonal sales differences based on industry-specific data.
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Segment sales goals to increase incremental wins
Now you know how much monthly revenue sales must generate, so it’s time to turn this larger number into incremental steps. Announcing to your team that you need $10,000 in sales this month doesn’t have the same effect as saying every rep needs to make 100 calls or close 10 deals monthly. Segment your sales goals to improve progress tracking and motivate your team to increase sales activity.
Goal segmentation uses timeframes, revenue sources and activity-orientated objectives to create actionable steps for individuals and teams. You may want to evaluate additional information about your sales funnel conversion rates or individual sales rep performance.
Your sales goals should be attainable, but it’s also essential to assess your revenue and activity-based objectives in real time.
The key is to be specific. Use an exact number and deadline. For instance, time-based sales goal setting should consider how many selling days your salespeople have during the week, month, or quarter. Don’t forget to exclude holidays and paid time off (PTO). Another example is prioritizing products or services. Set a sales goal to sell 40% of one product and 60% of another. Or sell 80% of services to leads and 20% to current customers.
You can also base sales goals on:
- Leads generated.
- Emails sent.
- Deals closed.
- New business sales.
- Product or service category.
- Calls placed.
- Appointments scheduled.
- Recurring sales from current customers.
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Explore sales goals to increase overall revenue
According to HubSpot, “over 40% of sales leaders missed revenue targets” in 2020. Your sales goals should be attainable, but it’s also essential to assess your revenue and activity-based objectives in real time. Analyze sales, customers and channel information to find opportunities for improvement. Turn your insights into smaller goals that move your team towards larger objectives.
Gather data about your:
- Closing ratio: Compare how many quotes were sent, demos completed or initial meetings held with sales leads versus total sales.
- Sales cycle length: What’s the average amount of time it takes to close a deal, and how does this vary by channel, product or service?
- Connection ratio: How many warm or cold calls, emails or instant messages turn into two-way conversations?
- Effective channels: Look at the costs and conversion rates on multiple channels to determine whether you prioritize one platform over another.
Use the above information to adapt your approach and adjust your objectives. Regularly meet with your team to ask for feedback and let them know when you incorporate their ideas into a new goal or sales activity.
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