Sales Planning that Doesn’t Suck

Sep 28, 2017, Written by Jim Miley

Sales planningHow do you draw up your sales plans for next year?  Do you have a solid process to develop sales targets or is it more of a pep rally for everyone to “get out there and hustle.”

We’re in the middle of our business planning cycle preparations and as Sales Planning is a critical piece of the planning puzzle, I thought to post some ideas for structure in the process.

It can be challenging to find the right blend of direction to your sales team through planning versus inviting creativity from your staff in targeting the best opportunities.  In most cases I believe it is a mistake to be overly directive in telling a sales team what, how and to whom they should sell.  You are more likely to get a good sales plan that is well integrated with your overall business if you provide helpful guidance that leaves the team room for their market knowledge, experience and ideas.

Conversely if you leave a sales team to simply put up a forecast or feed you a list of potential sales for the coming period, the likelihood of executing your plan is not high.  You haven’t developed a plan so how can they execute it?  “Go out there an sell something” is not a good plan.

There are obvious benefits to a good sales planning process and there are some not so obvious but equally valuable reasons to take it seriously.

The Obvious:

  • Sales Planning increases business revenue
  • Sales Planning is the basis for a budget
  • Sales Planning supports accountability

Sales planning in many small businesses will focus on how much a given sales person can produce.  Add up the individual sales forecasts and the sum is what you hope for.  Since increasing revenue is the common goal, we tend to have good years when our market’s rising and tough years when our market’s falling.

Budgeting from a typical small business sales plan is often limited to filling in the top line revenue number.  The bulk of the other budget numbers come without much consideration of any good data from the sales plan.

Many view the sales department accountable for the top line sales number as the one main goal.  If a sales person hits their number, success; fall short of their number, failure.

The Not So Obvious:

  • Good Sales Planning targets your most valuable opportunities
  • Good Sales Planning considers your overall business strategy
  • Good Sales Planning develops good sales people and business leaders

A good sales plan will consider not only the sales volume of an opportunity but also the value of that opportunity to your business.  The value is not always measured in current sales dollars.  You may be looking for improved market share with a new product line or have particularly strong margin on a less expensive service.  A sales plan simply targeting the top line number will ignore these important values to you as a business owner or leader.

Strong sales planning considers the overall direction of your business strategy.  Does your sales plan actively support execution of your strategy or does it simply feed the top line revenue as a bulk number?  Does the sales plan emphasize emerging markets where growth will explode year after next but produces lower volume today?  Are there costs you could better manage with a different product or service sales mix?

Good Sales Plans support the development of good sales people.  Strong sales staff development feeds your need for future business leaders.  Sink or swim is too common in the sales world, especially in small business.  Training the sales staff and helping them develop through good planning discipline improves your overall talent pool in a strategic way beyond simply growing sales revenue.

Keeping the Process Simple

While you should look for much more from your sales plan than a hope for more sales dollars, it’s good to keep the process simple.  I look to minimize creative writing assignments for the sales staff and focus on basic targets with simple action plans in support.

Here are the basic steps that have worked well for me in laying the foundation for good and solid sales plans:

  1. Provide target guidance. Communicate any targeted products or services you know need emphasis to support your overall business plan to the sales team.  Clearly identify any target markets, products or services that must have focus to deliver the planned results beyond simple top line growth.  If you need help on how to identify focus areas, see our Planning post here.
  2. Ask for input. Have each sales person prepare a minimum of three Sales Business Initiatives for their assigned territory or area of accountability.  The number of plans required may vary depending upon the nature of your business and market.  Three worked for my teams but you should determine the number of plans to properly support your business. The Sales Business Initiatives should include a definition of the target, any key obstacles to successfully selling to the target, basic action steps to overcome the obstacles and a three-year sales growth forecast.  Download a free template below that you can use for your team.  It’s easy to customize the template for any specific needs in your business.
  3. Review and comment. Once you have received all the completed Sales Business Initiatives from the team, review them carefully.  Challenge the team to adequately complete the individual sales initiatives.  Scrutinize the targets for integrating the step one guidance for areas of emphasis, the obstacles and action steps as practical and the sales projections as realistic.  Return any initiatives that are not up to the sales representatives capabilities for some additional work.  Note:  it is unusual to get all plans completed satisfactorily on the first pass as it often takes some guidance and encouragement.
  4. Discuss and choose. After you have received what you feel is a best effort from each member of your sales team, review and schedule a meeting with each person to discuss and critique together.  This conversation can take place in a group setting to encourage collaboration and some healthy competition on quality of work product.  There may be some last minute tweaking as a result of good challenging discussion.  Now choose as many of the plans as necessary to support your overall business plan and adequately challenge the sales staff. A major deliverable of this step is to solidify ownership and accountability for each plan chosen.
  5. Establish a periodic review schedule with each team member with a pre-set agenda to report progress, identify any new obstacles and make required adjustments throughout the year including sales projections. If you are using a CRM system, it may be suited for tracking and managing this whole process.

The process outlined above is really pretty simple but has provided strong results for my sales teams over many years.  As the operational leader, I would include in my plan review notes any support the sales plans may require from other parts of the business.  Our discussions would include some rudimentary scratch pad ROI estimates for plans that might require special resources and the operations managers would participate where they needed to commit to support of a given sales target.

Helping our clients develop sales plans that work for their specific business is very rewarding.  We customize the steps and plan details based upon our client needs and organizational capabilities but this process is scalable whether you have one sales person or a team of fifty.  If you haven’t found a process or tools that are driving strategic sales growth in your business, try this a time or two and make it yours. sales planning

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Jim Miley

As a Business Coach, Jim brings a broad background of operational and sales management skills and expertise to help small business owners grow their business and reach their highest potential. He has 30 years of field-proven professional experience.