Recharger Magazine

The Sales Budget Has Been Set … Now What?

This guest blog was contributed by Brad Roderick.

The holidays are over. The last of the fruitcake is gone. Trips to the mall are less frequent. Some of those New Year’s resolutions have already been broken. All of the hustle and bustle is over, and you’re left staring into the face of the number … the 2012 sales budget!

After a couple of decades of watching reactions, hearing comments and generally observing the “I just got my new quota” blues, it is possible I may have learned one or two things that could be helpful for my Revenue Generator friends and their coaches (sales reps and managers). Since one of my resolutions is to share more with others (I read about the importance of sharing tips and guides through social media), here’s a straightforward process for laying out your 2012 sales plan:

1. Stare directly into the new number. Do not look away; do not flinch. Repeat, “It’s going to be OK. I’ve done this before. It’s going to be OK.” Repeat as frequently as necessary.

2. Own the new number. It’s just a number. Use it to work for you, not against you.

3. Put together all of your sales records for 2011.

4. Determine your current run rate.

5. Determine your attrition/defect rate in 2011.

6. How much additional revenue is significantly at risk? Put a number to it.

Let’s quickly look at steps 4, 5 and 6. In 2011 your sales were $1,000,000, with 20 percent of the beginning of the year’s business disappearing by December 31 (20 percent attrition). Additionally, you find that your best accounts are printing about 10 percent less due to fewer employees, focus on cost-cutting, environmental reasons, etc. You started with $1 million and then backed out attrition of 20 percent and another 10 percent due to the consumption declines to come up with a base of $700,000 that you can bank on for 2012. Uh-oh – this means that just to stay flat, we will need to find another $300,000! And on top of that, we need to add whatever growth is required for 2012. Egads! A simple 15 percent growth number means we need to find at least $450,000 in new business! This is horrible! OK, not really. Chances are pretty good that this year’s math is no different than last year’s or the year before, and you survived that, right? And now you have a big advantage over last year: You really understand the numbers and what is needed to succeed. So what do we do next after hanging up the crying towel?

1. Go back to 2011 sales records.

2. How much of the revenue came from new products?

3. How much came from new customers?

Your records show 25 percent of 2011’s revenue came from new products your company launched and 30 percent came from bringing on new customers. Great news! Not only are your normal sales activities going to cover the attrition and other possible losses, but you start off the year with a map that indicates you’re already well positioned for success. The only thing left is to plan out those activities that will close the gap between where you are already headed and any incremental growth needed.

Now that you have a firm number that is based on facts instead of reaction, determine how much time you need to spend in four areas:

1. Existing products for existing customers – easiest.

2. New products for existing customers – easy.

3. Existing products for new customers – harder.

4. New products for new customers – really hard.

Personally, I find this to be one of the most freeing exercises of the year because once this is complete, I know exactly where I stand and exactly what I need to do. I will confess that this wasn’t always the case; like the majority of salespeople, I spent time worrying over the numbers (fear) instead of taking the time to see exactly where I was and creating a sales plan for success.

One closing comment: Spend one day on the plan, and then focus the next 364 on execution!

Contact Brad at BRoderick@inkcycle.com.

Posted by Brad Roderick on Feb 10, 2012