As a small business owner, your ability to set and achieve your sales targets will determine whether you will be tomorrow’s big business owner.
So here is your simple 5 step guide to setting and achieving your sales targets. We know it works because we increased our own sales 6x between 2012 and 2013. Who knows where it will take us in 2014!
1. Who Are Your Best Customers?
Your accounting software will generate a report of your best customers by sales income. Not using cloud accounting software? Up to information is essential to make the best decisions about your business. Read our guide to cloud accounting software here.
In Xero, the report you need is called ‘Income By Contact.’ If you rely on repeat customers you should look at a longer period eg 1 year by month, but if each sale usually to a new customer a shorter period eg the last 3 months by month will be more relevant to determine the next 3 months. If your business is seasonal you need to look at each season individually.
Once you have your report for the relevant time period, sort your customers by sales per customer from top to bottom. And there you have at the top your 10 best customers by sales value.
2. Sales Per Source
In an extra column next to each customer name, add the source of the referral, eg word of mouth, printed advert, social media, google. There are a variety of ways such as filters, a formula or a pivot table to total sales spend and number of customers by source. You should then be able to work out what percentage of your total sales each source provided.
3. Setting Sales Targets – Qualitative
It’s not just the numbers that matter. I’ll give you an example. In our first year we gained over 50% of our sales from word of mouth referrals from friends and family. It was incredible to receive such a lot of support from people we know and we are hugely grateful. However, our friends and family are finite and setting targets to increase our friends and family was not an option. So we had to ignore this source in terms of our sales targets and concentrate on gaining customer referrals instead. Another good example is a customer referral where that customer by sales income is not one of your best customers. Obviously they are still one of your best customers and you need to develop that source if you want more like them.
4. Set Actions For Each Sales Target
Look at each of your top referral sources for your total sales income and your top sources for your best customers for each one set 5-10 actions for developing that source. Say one of your top sources of sales was your website. You could set actions such as blogging each week, as per the example shown.
5. Record Your Success
Your spreadsheet with your actions on will act like a project worksheet. Each week record your success including number of enquiries and number of new sales. If you provide a service rather than a product it is a good idea to record the name of each person who enquires and the name of each new customer.
So there you have it, a finite number of your top sales sources, and targets for each that are Specific, Measurable, Achievable, Relevant and Time bound. All you need to do now is take action! Good luck!
By Claire Georghiades FCA, Co-Founder of Accounts Resource.
Accounts Resource is a pro-active accountancy practice based in South West London. Accounts Resource are specialists in providing Accounting and Tax solutions to small and startup businesses and won The Best New Startup Award at the Richmond Business Awards 2012 and Best Website at the Richmond Business Awards 2013.