How to Make a Yearly Sales Target Plan

Save

An annual sales target should be high enough to be a challenge but realistic enough to be attainable. Craft your initial sales target with historical information about revenues, transactions and customers. Then, adjust the target based on your individual sales representatives' skills and abilities.

Step 1: Forecast Company-wide Sales

Estimate annual sales based on historical accounting data. Accounting firm Inspire CA recommends that companies setting sale goals forecast revenue using the process goal method. To project sales revenue using this method, multiply your company's average transaction value by the average number of transactions you earn per client by the total number of clients your company has. For example, if the historic average sales transaction is $1,000, each client makes an average of 10 transactions a year and you have 50 clients, projected sales revenue is $500,000.

Step 2: Adjust Target Based on Staff Abilities

Vanessa Merit Nornberg, president of Metal Mafia, explains that when she sets sales targets, she considers the skills and abilities of her current sales staff. Using her method, review last year's sales numbers, broken down by sales representative, and consider how much each salesperson contributed to total sales when you set goals. For example, if your top salesman was responsible for 10 percent of sales revenue last year, it's fair to set his goal at 10 percent of $500,000 -- or $50,000 -- for this year. If you have new staff on board, consider how much other sales representatives earned their first years and set the new staffer's goal accordingly.

Tip

  • Increasing expectations across the board without considering each individual's unique skills and abilities can result in unrealistic goals.

Step 3: Ask Employees What They Think

Nornberg points out that it's important to consult with sales staff about their sales targets. An easy way to find out what sales reps think is to simply ask them what they think their target should be for the year. Nornberg noted her sales staff were more motivated to meet sales goals knowing they had a role in setting them.

Step 4: Revisit on a Regular Basis

A year is a long time. Markets can shift, demand can change and certain products and services can go out of fashion. The QuickBooks Small Business blog suggests that managers revisit annual sales targets regularly. Allow sales staff to provide feedback on goals and market changes so management can adjust expectations accordingly.

Promoted By Zergnet

Comments

You May Also Like

  • What Is a Sales Budget?

    A sales budget is management's estimate of sales for a future financial period. A business uses sales budgets to set department goals,...

  • How to Exceed Monthly Sales Targets

    Sales people are always trying to exceed their last month's sales target. In theory it's not tough to do if you have...

  • How to Develop a Sales Incentive Plan

    Create an atmosphere and expectation among sales professionals that rewards will occur when goals are met and initiative is taken. Implement a...

  • How to Set Sales Quotas

    A sales quota is the target or minimum sales volume expected from a sales employee, sales team and/or department, during a defined...

  • How to Set Targets for a Sales Force

    Keep your sales force motivated and focused on growing the business by setting measurable, attainable sales targets. Sales targets are put into...

  • How to Create a Business Plan for Sales

    Creating a business plan for sales is a necessary step for any business owner, regardless of the size of the business. Most...

  • Techniques for Achieving a Sales Target

    A challenge for virtually every salesperson is to continually reach sales targets she sets for herself or in conjunction with her sales...

  • Sales Forecasting Techniques

    Small-business owners can forecast future sales using a mix of quantitative data and qualitative research. Analyzing past performance and discussing potential trends...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!