I was speaking with one of my long-time clients today, and we came upon the issue of setting goals around sales and business growth. Surprisingly, this kicked off a deep and intensive conversation around whether sales goals were meaningful or relevant.
It turns out that my client has set sales goals in the past, but didn’t come anywhere close to meeting them. As a result, she felt frustrated, and with the sneaking suspicion that she was doing something wrong. Additionally, this gave her such a bad feeling that she’s avoided setting sales goals ever since.
In one way, that’s a very, very wise move.
Why? Because you can’t control your sales. You can only control the actions you take to get those sales. I think this is a really important distinction, because, as entrepreneurs, it seems like we’re always shuttling back and forth between effort and results. Do we applaud ourselves for trying? Or only for succeeding? Do we grade ourselves for effort? Or only outcome?
It’s an interesting question. The “right” answer is – probably- both. We reward ourselves for trying to do better or working to improve- AND we reward ourselves when we attain goals that we seek.
One challenge of effective goal setting related to sales is that we sometimes have unrealistic or ungrounded expectations of what is actually possible for us to achieve. I hear this often when I meet with new entrepreneurs who are just 1 month into their new business and seeking to break the six figure mark in 6 months. Not to say this can’t be done; but usually, it takes a bit longer than this to get enough traction to reach that six figure earning level.
So how can you set more realistic sales goals- one that make you stretch, but not so far that you fall over on your face? Here are a few ideas to consider:
* What Are Your Income Goals? – How much money do you need to earn in order to provide yourself and your family with the lifestyle that you desire? Choose the real number you want and need to earn to stay in business long term. There is no point in underearning or trying to make do with less than you want.
* How Big Is Your Audience? – Is the audience large enough to support the income goals you want to achieve? Keep in mind that reaching six figures can take about 1000 true fans. If you don’t have 1000 true fans, yet, how can you get them?
* What Is the Price of Your Product? – Have you priced your products or services accurately and fairly for your market? You want to provide the most value at the best price. Keep in mind that it is sometimes much easier to sell one person a service for $1000 than it is to sell 100 people a service for $10. I, personally, like and use the boutique model in my own business- where I sell higher priced services, and work with fewer people.
* Do You Have Sales Partners? – If you have joint venture partners or affiliates, you will have to factor in commissions when calculating your earnings. Are you making enough on each sale to make it worth growing those sales? If not, then this needs to be re-evaluated.
* What Are Your Expenses? – How much is your break-even number for only your business without you taking a paycheck? This is an important number, because, sometimes, businesses can become much more profitable simply by cutting a few expenses.
* Are Your Expectations Realistic? – Nobody can complete each and every sale 100% of the time. Keep track of how many potential clients you speak with before one of them hires you. This will give you a sense of how many people you need to reliably and consistently connect with to reach your income goals. If you know that one in three people hires you, you know that you can increase your sales simply by speaking with 6 more people, or 9 more people, or 12 more people- and so on.
* Gamify where you can – Sometimes, there are aspects of entrepreneurship that are just drudgery. You don’t want to do them. You avoid them. Sometimes they just never get done. Yet, for something as important as sales, it’s key that this actually gets done. One trick I use is to gamify my sales process. I set up a system where I get 5 points anytime I make an offer, or follow up with a potential client, or have a sales call. If I reach 20 points in a week, I reward myself! I also do this for things related to marketing- like writing blog posts, developing my newsletter, and so on. And this blog post means another +5 points for me! 🙂
If you feel that you need to set sales goal better than you have so far, these tips will help you. Let me know how you utilize them to grow your business.