True sales planning is one of the most important things that a business can do each year. It forces business leaders to think through – in significant detail – what is necessary to accomplish their business goals.
Sales planning is more than a tactical plan set from on high: “Your quota is $1MM, now go sell!”
Instead, it’s about planning to sell profitably.
Selling profitably is something that is not as straightforward as it seems. We see examples all the time, in companies big and small, that believe they are selling profitably and selling well–but simply are not.
There are examples of strategic decisions to sell certain products or services at lower margins or even at a loss. These may include gaining traction in a new market, gaining a marquee client in a new industry, or an initial sale with high likelihood of highly profitable add-on services.
But these examples should be few and far between and only done based on a specific plan, not because you didn’t realize it was an unprofitable sale.
5 Sales Planning Steps to Profitability
True sales planning is one of the most important things that a business can do each year. It forces business leaders to think through – in significant detail – what is necessary to accomplish their business goals.
Sales planning is more than a tactical plan set from on high: “Your quota is $1MM, now go sell!”
Instead, it’s about planning to sell profitably.
Selling profitably is something that is not as straightforward as it seems. We see examples all the time, in companies big and small, that believe they are selling profitably and selling well–but simply are not.
There are examples of strategic decisions to sell certain products or services at lower margins or even at a loss. These may include gaining traction in a new market, gaining a marquee client in a new industry, or an initial sale with high likelihood of highly profitable add-on services.
But these examples should be few and far between and only done based on a specific plan, not because you didn’t realize it was an unprofitable sale.
Importance of Sales Forecasting
The single most important element in the forecasting process is the Sales Forecast. Generally, Sales drives everything else; it is what determines the expense spending plan. If the company is a manufacturing company, the sales forecast will drive the production plan.
There are several different ways to approach Sales Forecasting. Typically it starts with the Sales Department figuring out how much product they can sell in the following year. Sales people are naturally optimistic by nature, usually overestimating achievable sales. There are several factors that can impact the forecast:
Sales and Accounting – They make a great team.
Sales and Marketing is a far more regular team than sales and accounting. CEO Matt Garrett outlines the many ways that sales and accounting are actually on the same team.
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