2012 Business Planning – Do you know how you are going to grow?

By Brent Bonine, Managing Director, Sales Insights, Inc.

For Sales Leaders who work on a calendar business year, Q4 is a challenging time. We have just come out of summer and we are trying to get the troops motivated to finish strong and hopefully hit our numbers. We are also facing the reality that our efforts are going to be interrupted by at least 2 major holidays before we get to the finish line.

If this wasn’t enough to keep us awake at night, we will soon begin the process of budgeting and planning for the New Year. If your experience is like mine, the conversation goes something like this:

CEO: – We need to begin planning for next year. It all begins with sales and I think we should budget for an increase of 15% in our sales plan for next year.

Sales Leader: OK, that sounds good (trying desperately to sound positive and upbeat). How are we planning on achieving that growth?

CEO: I don’t know – that’s why I hired you!

As the CEO walks away you realize two things: 1 – never ask that question again. 2- you have no idea how you’re going to meet this year’s objective much less an increase of 15% for next year.

So, to help you avoid these situations in the future, let’s look at what our options are.

 

THE FORMULA FOR GENERATING REVENUE:

Your ability to increase revenue is tied to one of these 3 variables. By addressing each variable, you can formulate your strategy to meet next year’s target.

Opportunities –How many additional opportunities would you need to generate to increase revenue to meet your target? What % of the increase is marketing responsible for in the form of leads? What % of the increase is the result of the business development efforts of your sales team? What resources are required to generate this additional activity?

Close Ratio –First you must know what your current close ratio is for the organization and for each individual on your team. If the current close ratio is 25% of all opportunities, what % increase do you have to reach to your revenue target. Let’s assume that a 5% improvement in Close Ratio will generate a 15% increase in revenue. What strategies would you have to engage to improve your team’s close ratio? Do you need to invest in training? Can you package your product or service differently to improve close ratios?

Average Deal Size –Like Close Ratio, you must first begin by defining what your current average deal size is at the organization and individual level. Is there a noticeable difference in the average deal size between reps? If so, can you identify why some reps deal size is higher than others? Is there an opportunity to increase average deal size across the organization? Are your reps targeting their efforts on the right prospects?

Once you have analyzed all of the areas above, you are now ready to present a plan to your CEO to reach your goals. You may decide to focus on one or all three of the areas. The key is to be able to communicate to your CEO what will be required to meet your goals.

This straightforward approach allows you to align yourself with the CEO’s vision while providing him with information needed to reach the target goal. Your position shifts in the eyes of your CEO and you are seen as a valuable contributor on the team.

About the Author:
Brent Bonine is the Managing Director for Sales Insights. He has spent his entire professional career in the field of sales. For the past 20 years,  he has held VP and Executive Director Sales Leadership positions in several organizations in a variety of industries including; Financial Services, Information Technology, Construction and Technical Services, Training organizations and Marketing Service firms. This breadth of his experience provides a unique understanding and knowledge of how to manage and direct sales organizations who are selling tangible and intangible products and services. For more Sales Leadership Development Strategies visit- www.salesinsights.net

 

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