Learn to set realistic sales targets in 9 min 🎯

What are sales targets?

Are they numbers on the sales report?

Or are they goals you set your eyes on?

They're both!

Good sales targets will help your business clarify what to achieve and set up the milestones to guide the business towards development and growth.

By setting up realistic and achievable sales targets, you can:

• plan and arrange cash flow management

• improve management's credibility

• strengthen sales motivation

Some say sales targets should be ambitious. But it's important to be realistic!

Goals that are too big will lead to unnecessary frustration and wasted assets. Set up sales targets that can motivate your salespeople to fight for growth, yet never too unrealistic to accomplish.

Put past, current, and forward-looking data into your targets:

• Business situation

• Economic factors

• Revenue per sales represenative

• Solicited feedback

Consider all factors that will affect future revenue.

• What do the past and current revenue numbers tell you?

• Do you think you're at a good starting point for growth?

• Do you see high COGs (cost of goods sold) or high profit margins?

• Do you have a strong recurring revenue stream?

Predict upcoming market trends and determine your market potential.

• What's happening in your industry and in the wider economy?

• Do you think it's a booming business that will reap more opportunities in the future?

• Are you in a highly competitive industry?

Take a look at the revenue each of your sales representatives brings in.

• Do you think some training can increase their sales numbers?

• Do you think more hires can successfully increase your revenue?

Before and during sales forecasting, talk to your frontline employees for opinions and feedback.

• Do they have any objections to your targets?

• Can they highlight variables that you haven't considered, like poor product value propositions or end-user feedback on the product line?

• Look at your reports from the last few years or quarters, and make graphs for visual impact.

• Look at your previous sales goals. Were you accurate in the past? Why or why not?

• Create 3 targets:

  • 1) Safe: a target based on current projections

  • 2) Moderate: a target for increased but realistic growth

  • 3) Stretch: a target that requires investment in incentives, new software, or other options to increase sales

Here's an example:

Company: Boots Inc.

Information we have:

Over the last 5 years, we have had a 16% growth in sales with moderate investment in marketing or advertising.

The economy is in decline, with sales down 5% across the entire shoe industry.

Possible Sales Targets

Safe: 11% accounting for the economic climate.

Moderate: 14% with a low-cost plan to increase targeted advertising.

Stretch: 22% with a large investment to shift to online sales and social media influencer marketing.

Get ready for a fun ride through the past, present, and future of your business!

Set your business navigation to realistic sales targets so that they can be challenging and inspiring, instead of discouraging and negative.