Small Business Sales and Activity Planning for Success

Small Business Sales and Activity Planning for Success

“It’s not about ideas. It’s about making ideas happen.” – Scott Belsky

Ideas are a dime a dozen.  Your world changes when you make ideas happen.  And in the for-profit business world, that means sales.

Do I Really Need a Sales and Activity Plan?

Yes.  You start your business because you have great ideas.  When you grow your business through sales, you are getting your ideas out there to a bigger audience, making an impact, realizing your dreams, changing your world and the world of others. You are, in Belsky’s words, “making [your] ideas happen.” You are also reaping the rewards you envisioned when you started your business.

This only happens through sales planning and executing!  You start with a plan, then you execute through activity.  I have found there are two types of business owners:

  • those who love to plan and are afraid to execute
  • those who hate planning and do nothing but execute

As a small business owner, your “happy place” is planning and executing!  That means you need your sales and activity projections as a starting place.  These are key metrics in business planning.

Before we go any further, let’s debunk a myth.  As a small business owner, you often believe if you do enough marketing activities you will miraculously grow your business and be profitable, and therefore you won’t have to “do sales.” Not true.  Marketing will grow awareness of your business, which is very important.  However, you must also…actually…sell.

To increase sales without feeling like a hamster running endless circles on a hamster wheel and going nowhere, you need a sales plan. Your sales plan becomes part of your business plan.

Now that I have convinced you, how do you start to figure out your projections?  The process is to ask yourself these questions:

  • How many units must I sell to realize my desired profit plus expenses and taxes owed?
  • How much time and effort per week/month/year will it take me to achieve my goal?
  • Can I devote necessary resources (time/money) at this point in my life to achieve this goal?
  • Do I want to?
  • By doing this, what other opportunities am I giving up?
  • By doing this, what opportunities am I “growing” for myself?

Sounds like a lot of work, right?  Actually, it is not, with the right planning and support. In this article, we will stick with the basics of making realistic projections and ensuring you can handle the activity to support those projections.  To simplify this, these calculations are based upon a solopreneur business where you are the business owner and the only sales person working in your business.  If you have a sales staff, great! Simply add them to the math calculations below and consider them in the resulting questions you will ask yourself.

Sales Projections and Activity

I am assuming you have projected your annual expenses for your company, including taxes, and your desired profit for the next 12 months.  This is your Annual Sales Goal.  Divide that number by 12 for your Magic Monthly Sales Goal.  [Note: This is where you begin to add those extra sales people in if you have them! If you have 3 sales people, divide your Annual Sales Goal by 3.]

In your business, you will break your monthly goals down into weekly and daily goals.  In this article, to simplify this, we’ll keep it at the monthly level.

To keep the math simple, let’s say your Annual Sales Goal is $120,000 and you are a solopreneur. That means you will need to sell $10,000 per month to reach your goal (120,000/12).  Is that realistic? First, you need to know a couple of numbers. Let’s start with your historical data.

  1. Average Sale Per Client: Let’s assume your revenue for the past 12 months was $96,000 and you had 48 sales. Your average sale/client was $2,000 (96,000/48).
  2. Conversion Rate: If on average you make 50 calls and they result in 2 sales, then your conversion rate is 4% (2/50).
  3. Activity Goal: Using these numbers, if you make 125 calls per month, you will close five sales (125 X .04).  With five sales at $2,000 each, you will have reached your monthly goal of $10,000.

Are These Realistic Projections?

Now, back to our basic question about whether these projections are realistic.  It depends.

You used historical data and math to calculate your key metrics.  Good so far.  But let’s dig deeper. Using our example:

  • Do you have systems in place so that you will have 125 solid leads to call each month?
  • Are you properly qualifying those leads? This is a great area to delve into, so you can achieve higher conversion rates (more sales!)
  • Are you looking for opportunities to upsell?
  • What is your client retention rate? To dig deeper here, ask yourself:
    • Are you in a constant state of client churn? How can you change that? Do you need to?
    • Are you reaching out to existing clients on a regular basis?
    • Are you engaging in conversations with your leads, creating relationships, or are you simply being transactional? Does this fit your business model?
  • Are you receiving word-of-mouth leads from existing clients and referral partners?
  • Are you using the new technology that is available to you (there is always new technology!)?
  • Do you have the proper tools and training already in place to be successful in sales?
    • Have you included time in your projections for training and professional development if you need to get up to speed?
  • Do you have any seasonal fluctuations in your sales? Have you adjusted your projections for that?
  • Are things changing in your business or your industry? (Automatic answer: )  How is that impacting your sales?
  • Are there new competitors in your space? How are they impacting your sales?

Soft Metrics Are Also Important

Now you have the hard metrics (black and white calculations). In our simple example, you need to make 125 calls per month to close 5 sales of $2,000 each, and you will reach your goal of $120,000 per year in revenue.  You have determined $120,000 annual revenue will meet your profit goal plus expenses and taxes owed.

But what about the soft metrics, the “work life balance” and “quality of life” considerations?  How much time and effort per week/month/year will it take you to compile a solid lead list so you can make 125 calls per month with a 4% conversation rate?  How much time will you spend in making those calls and following up on each one, scheduling 1-1’s, doing demonstrations, etc.? Can you devote the necessary time and resources to your sales efforts while also running your business?  Do you want to at this point in your life?

Your Decision

The answers to these questions are subjective.  One person will say, “Heck, yes, I can’t wait!” while another person may not be so sure they are willing to pay the price to achieve their desired sales level.  We are all at different points in our lives, with different responsibilities and personal goals in addition to our career goals.  That is okay.  What is not okay is to make excuses or let fear rule your decisions.

After careful consideration, you may decide that your sales goal is too aggressive for now, that you are not willing at this point in your life to give up other life opportunities open to you to achieve those goals.  You may choose to adjust those sales goals and grow your business more slowly.  That is fine!

Or you may feel now is the time and you are more than ready! Great!  However, there could still be something stopping you.  Are you afraid of sales?  Many people are (just saying!).  If so, schedule some sales coaching or training.  We have a video in our Startup to Growth Video Library entitled Sales 101.  It is fun and will get you excited about sales! Or you can take a seminar, a workshop, or hire a small business coach to work with you on your business sales goals.  You can do this, if you are willing to devote the time and resources to making it happen.

Make the choices that best fits YOU and YOUR circumstances, but don’t make excuses. In setting your sales goals and making them happen, you are choosing between the time you devote to current opportunities (including life activities) and the time you devote to growing future business opportunities for you and your company.  Grow at the pace you desire.

If you have any questions or comments about this article, of if you would like to schedule a free consultation, please contact me at [email protected].  Together, we’ve got this!

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About Robin Suomi, MBA, Owner of Startup to Growth, LLC.  Robin is a small business coach, consultant and trainer who has worked with thousands of small business owners for over 10 years, helping them start and/or grow their small businesses.  She combines her combines solid technical knowledge with her coaching and listening skills to help clients achieve their goals. In addition to teaching business courses as an adjunct professor, she created her own Business Plan Boot Camp and Customized  Individual and Group Business Plan Boot Camps for her clients. Today, she delivers most of her coaching/consulting/training services to clients across the country through a live, video meeting platform.  She has also developed an online small business training and professional development video Library, where experts in the fields of marketing, sales, insurance and law, to name only a few, present their expertise to Library Members 24 X 7 X 365 by a recorded video format.

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Who are your Business’ Key People? Think Outside the Box!

Who are your Business’ Key People? Think Outside the Box!

Every business has at least one Key Person, of course (hint:  if it’s your business, that person is you!), but as you continue to grow, expand your reach, expand your revenues, and expand your workforce – be careful not to lose sight of who your key people are!

What is a Key Person?  According to the Business Directory, a Key Person is “an Individual whose knowledge, creativity, inspiration, reputation, and/or skills are critical to the viability or growth of an organization, and whose loss may cripple it.”  But does this fully cover the realm of who should be considered a key person?

Most companies identify key personnel as being purely those in management  and/or ownership positions.   This is often correct, but can miss many of the valuable people that may not be in these positions.

For example, there’s a sales-based company I know of that had 3 different departments and department heads who reported to the Owner/CEO.  There were multiple other salespeople working within the departments, and over the years the sales force would turn over periodically, with people moving onto other careers, and new people coming in.   The company properly identified the department heads as being key personnel and properly planned for the possibility of their departure.

However, one of their “rank and file” salespeople happened to be with the company for nearly 20 years, and while she never had aspirations for management, nor did she typically post the highest sales totals in the company in any given year, she accumulated a client-base in the hundreds, and due to being somewhat “old fashioned” was much stronger in her customer service and client relationships than she was in her record-keeping. Clients were happy, performance and sales numbers were great, and so on they went.

You can imagine how this story ends – one weekend day a phone call came to the owner of the company who found out that their longtime employee had suddenly and unexpectedly passed away.    An emergency meeting was called and the beginning of the corporate nightmare began – unravelling 20 years worth of handwritten/paper files, determining which clients were active, prioritizing active open clients who needed immediate service or were in the middle of the sales process.   Two full years later, after hundreds and hundreds of man-hours spent by other salespeople (taking time away from their own sales) , untold numbers of lost clients who slipped through the cracks or found other vendors due to lack of followup, the cost to the company was unimaginable.

Did this person fit the classical definition of a “key person?”  Not in the classical sense.  She was a “rank and file” salesperson, not in management, not even one of the “star” salespeople of the company.  Her loss did not “cripple” the company.  However, what made her so key to the company was the accumulation of clients over a long period of time, as well as the lack of transparency in the record-keeping on these clients that made it ever so much harder for any replacement or colleague to pick up where she left off.   And the business suffered hundreds of thousands of dollars of losses in revenue, additional personnel costs, and opportunity cost of what their other salespeople could have been doing instead of unraveling a tangled web of clients and products left behind by their tragically lost colleague.

It is essential to look at your entire employee base and take the difficult step of considering business life without that person.   Can you hire a replacement of equal or near-equal experience easily and at a similar cost to what you were paying the current employee?   Or Is their position requiring of a unique level of experience, education, personal connections or rare personality traits?   These issues, among other, can help to determine whether some level of “key” exists for that employee.

Why is it important to identify the key employees in your organization?  We’ll cover this in next month’s blog entry, Key Person Insurance Planning.


Michael S. Feinberg, ChFC has been working in the insurance advisory and brokerage industry since 1995. His clients include both individuals/families, and small to mid-size businesses both locally and nationwide. Michael joined forces with McLean Insurance in 2013 and through this affiliation adds value to both individual and commercial clients by offering them not only his income replacement and business planning expertise but also valuable consultation on personal and commercial insurance protection through his experienced agency colleagues.