I had a boss (the company Founder) several years ago who would set the annual sales goals for our company… without much regard for what was really happening in the marketplace. The trouble was – and no surprise here – that he set ridiculously high goals (think 50%+ growth or more). Then, the rest of the team would jump through hoops to re-do all of the plan and budgets… all the while knowing that there was no way in hell we would come close to achieving those goals.
That’s NOT how to do it.
Fast-forward 15 years… I was with a client a few weeks ago and chatting with the President about her 2017 sales goals. While she wants to achieve 20% growth next year, the prospect of a jump that large really scares her. So, we decided to break it down like this…
Imagine you manage a $1 million business. A 20% increase would take you to $1.2 million. That’s a pretty big increase. So, let’s drill down a bit…
- Revenue = $1,000,000
- Average project size = $30,000 (about average in our industry)
- # Projects required to achieve $1,000,000 = 33.3 or a little under 3/month.
- Additional revenue goal = $200,000
- Average project size = $30,000
- # Projects required to achieve $200,000 = 6.7 or about .5/month
So, assuming you can maintain you existing book of business (not a sure thing, of course)… you only need to pick up 1 new project every 2 months to enjoy a 20% increase in revenue next year.
Not nearly as scary, huh?
How do you pick up those 6 projects (or the additional $200k)? Good news… there are three ways to do it:
- NEW: Develop some new clients. Your marketing & sales machine should never stop working.
- MORE: Work with your existing clients to bring you additional projects.
- BIGGER: Work with your clients to develop a few projects that generate significantly more than $30k.
And here’s the other thing to think about… can you manage one additional project every two months without taking on additional staff or additional resources? Probably. Which means that this incremental revenue growth is very profitable!
Growth is never easy… but when you break your sales goals down into manageable pieces, they become much less daunting. And much more achievable.
Good luck and good selling.