Tool Box
Issue No. 42 - August/September 2008
Let’s get that sales budget
by Craig Stubing
While this article should be of interest to others it was written primarily with the needs of the ‘sales boss’ in an SME in mind, whether the sales boss is the business owner or an employed manager.
The achievement of sales budgets in any business is critical to that business’s profitability and longevity.
A sales boss can do several things to help salespeople achieve their sales budgets. Here are some of them.
Break their budgets down in to achievable ‘chunks’ of activity
We all know the way to eat an elephant is one bite at a time. Similarly with sales budgets; the easiest way to achieve them is one chunk at a time. Here are some tips that will help:
Firstly, allocate a portion of the annual sales budget to each month of the year. This is rarely as simple as dividing the year’s budget by 12 and allocating the result to each month as that month’s budget.
In most businesses there is a seasonality that applies to sales results. For example in some businesses January may be a traditionally quiet month while June may be the biggest sales month of the year.
Other month’s results may also reflect seasonality. The sales boss in such a business would be wise to allocate each month’s budget accordingly.
Secondly, convert each month’s budget into a number of sales (or orders) to be achieved. This is as simple as establishing the average sale value likely to be achieved - taking into account past results - and dividing that value in to each month’s sales budget.
The result is the likely number of sales that will need to be achieved in each month.
Thirdly, establish the number of proposals (or quotes) that will need to be presented to customers to achieve the necessary sales. For example, if a business ‘closes’ half of the proposals it presents it will need to present twice as many proposals as it expects to make sales.
By now your salespeople should have a budget broken do...
