5 Steps to Setup Sales Goals for Your Salespersons

Having clear sales goals is important for your small business and your success as an entrepreneur.

Why? If you have sales goals you will organize your business resources to achieve them. Setting up sales goals will force you to think about your cash flow, your income, and profitability.

These are important things when you manage your company. The success of the company will depend on these elements.

On the other side, when your sales team will know what is expected from them and what they need to do to achieve the goals, they will put their efforts to succeed. Tell me what I must to do, and I will do it. The same is for sales goals. If I hire a salesperson for my business one of the first things that I must tell him is what I will expect from him.

Do you have sales goals? How you measure the performance of your salespersons?

Here are five simple steps that will lead you through defining the sales goals and setting up tangible and measurable measures of the performance of your sales team.

1. Clearly Define Each Stage of Your Sales Funnel

Sales funnel is a way of visualization of your sales process. Simply you visualize how your customers become a part of your sales funnel and how they move through the funnel until they spend money in your company. Additionally, the sales funnel will help you to get a feedback and analyze all the different stages related to the success of the conversions.

If you want to set up clear sales goals of your salespersons you must to clearly define all the stages or the processes that are required from one potential customer to become a real buyer.

Defining the Sales Funnel

2. Look at Your Annual Business Goals

Probably you already have the business goals that you want to achieve. It is important for your sales goals to help in the achievement of your general business goals.

The second thing that you must to do is to look at your annual business goal to find how much income your business must generate to achieve those goals. Maybe you have a goal to increase profit for 6% from the previous year. How much income you must to generate to achieve that goal? This and similar questions will help you to start drawing the contours of your sales goals.

accomplish great things - sales goals

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3. Calculate Needed Sale That Must Be Generated From Each Salesperson

How many sales you must generate from an average salesperson if you want to achieve your business goals from the previous step. For example, if you have a goal to make $60.000 monthly and your business has three salespersons, each of them must generate $20.000. This can be a good start position for the future development of your sales goals.

4. Look at Sales Funnel Conversion Rates

Look at different stages of your sales funnel to define the conversion rate of each separate stage. The conversion rate between different stages in the sales funnel will give you information about what action steps you must develop to be taken from each salesperson.

Sales Funnel With Conversion Rates

5. Now It is the Time to Play With the Numbers

Now when you know how much sales in the form of income each salesperson must make, and you know the average income from one customer you can continue with the calculations to find how much leads must be transformed into the sales funnel. Here we start with the last process into the sales funnel and finish with numbers for the first process.

Sales Funnel Calculations

Now if we have a sales cycle something like this:

  • Prospect calling – Awareness
  • Conversation with decision makers and meeting with them – Interest
  • Demonstration – Desire
  • Buying

each salesperson need to make:

  • 835 prospect calls
  • 167 conversation and/or meetings with decision makers
  • 50 Demonstrations
  • 20 Sales.

If you know individual goals for each salesperson you can measure the performance of each of them.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan