Setting your sales goals is a fundamental step in being able to set up day to day efforts – whether it is just you or a team of people – to take actions that improve your chances of success. There is nothing more indicative of a well run – or poorly run – company than how it sets its goals and manages to these goals. Setting sales goals is not only setting your revenue goals for the year. You’ve likely already done that in your financial plan. Setting sales goals breaks those annual numbers into goals that drive the activities on a daily basis.

“Sales goals and metrics are the first step to giving yourself the best chance to hit your sales targets.” 

Break Down Annual Into Monthly. The first thing you should do is break your annual revenue numbers into monthly revenue numbers. This gives you a good idea of the revenue need to generate on a monthly basis. If you are targeting $120,000 for the year, the monthly amount ($12,000) is what you are managing to.

Number of Customers and Revenue Per Customer. Think about things like having a certain number of customers have a certain average amount of revenue per customer. Take your average revenue per customer and determine how many customers you need each month. If your average customer is $1,000 and you need to generate $12,000, you need 12 customers.

Pipeline Coverage. We discuss this in more detail in another course but the idea of a “pipeline” is simply the concept that if you want to have two customers, you likely will need ten customers in the “pipeline”. Pipeline coverage simply refers to the amount you need to have in the pipeline to have a chance of hitting your numbers. So if you need $12,000 per month, you need $60,000 of potential sales in your pipeline.