“What are smart goals in sales?” Smart goals are clear on:
- What your business wants to achieve
- How your business will know when it’s achieved them
- Your business’ power to achieve them
- The realistic possibility of achievement
- The timeline needed to make the achievement
As a (soon to be) small business owner, you’re going to learn that meeting goals is critical to your success. Appropriate objectives allow you to orient yourself. They let you know where you are in relation to where you want to be. They also help you track your progress and keep your business growing.
Sales goals shouldn’t be so lofty that the reader of your business plan thinks you are trying to deceive them. On the other hand, you don’t want them so modest that your business looks like a bad investment.
The acronym SMART is, admittedly, overused. Though it’s cliché, it does serve as a good starting point for goal creation. If you adhere to the SMART guidelines, you should have worthwhile sales goals. Goals that will motivate you and show the world that your business has a plan for growth and success.
Specific sales goals
Goals are no good if they’re not specific. Abstract or subjective goals aren’t clear enough to provide motivation.
Which of these sounds better to you?
Increase sales every quarter.
Or…
Increase sales by 15% monthly in the first six months. 10% monthly in the second six months. And, 8% monthly in the second year of business.
The reader of your business plan is going to want to see something more like the second example. Concrete speculation about how you’ll grow your business.
Specific goals let you know when you reach them, and when you’ve fallen short. It also helps to divide goal achievement into manageable chunks.
Measurable sales goals
Specific goals can be measured. If you can’t measure your progress towards a goal, then you’ll never know if you’ve achieved it.
Which of the following gives you more confidence in a business?
“We plan to put ourselves in a position for success”?
Or…
“We plan to have 20% referral business by the end of our second year”?
The second example can be measured. The business can track referrals and will know if it’s progressing. If you can’t measure your sales goals, you’ll never know if you achieve them.
Attainable sales goals
Yes, everybody who launches a small business wants to be successful. Most have big dreams about achieving awesome levels of success. And that’s all okay.
However, if your goals aren’t realistic, they’re little more than dreams.
Which of the following seems more attainable for a startup cleaning business?
100% market share in their city?
Or…
After 3 years, obtain a 50% market share within the ZIP Codes that they operate in?
Theoretically, I suppose, 100% market share as possible. But, the goal of 50% market share (in the immediate vicinity) is much more attainable. It’s a stepping stone, in fact, to 100% city-wide market share.
Attainable goals bring milestones down to a more reasonable level. Meanwhile, they should be aspirational enough to translate into business success. The reader of your business plan will appreciate “stepping stone” goals over lofty visions of success.
Realistic sales goals
While stepping stone attainable goals add up to big-time attainable goals, unrealistic goals don’t lead anywhere. They’re so over-the-top that they’re just not practical.
Which of the following seems more realistic for that same startup cleaning business?
$1 million in revenue in its first quarter of operation?
Or…
$3,000 in revenue in the first month, Growing at a rate of 15% for the next five months?
The first goal isn’t going to motivate you. It sure as hell isn’t going to inspire confidence. The reader of your business plan would think that you have a tenuous grasp on reality. Therefore, they are unlikely to invest in your business idea.
Timely sales goals
Finally, goals have to work within the restraints of time. Just like anything else.
Think of it this way…
What if the startup cleaning business has a goal of $3,000 in monthly revenue? Is that good?
It depends, right? It might be good – if it was for month one. It’s not so great if they’ve been in business for five years.
Clarifying a timeline for your goals puts them into perspective.
What are 8 types of sales goals?
The SMART guideline tells you how to create your goals. But, it doesn’t tell you what metrics to use.
Sales affect everything in a business. Tracking total units and/or revenue is okay. However, you can expand upon that and go into more detail. The reader of your business plan will probably appreciate it.
Again, be mindful of the timeline. What’s most appropriate, do you think? Weekly, monthly, quarterly, yearly, or something else?
Furthermore, another thing to consider is breaking your sales goals down. This can be done by detailing products, categories, departments, salespeople, or any other way you deem appropriate.
Here’s a couple of ideas for different types of sales goals to reference in the marketing and sales section of your business plan.
- Income statement-based
- Sales units
- Revenue
- Margins (revenue – expenses)
- Profit margin’s (profit as a % of revenue)
- Conversion funnel-based
- Leads generated
- Prospects converted from leads
- Customers converted from prospects
- Repeat/referring customers
If you’re a brand new business you might focus more on the income statement-based sales goals. If you’ve been in business a while, you might find the conversion funnel-based sales goals more appropriate.
What are SMART goals in sales?
Once again, remember to keep the SMART acronym in mind when creating sales goals for your small business.
Though, you need not specifically reference the “SMART” guidelines in your business plan. The reader will recognize that your objectives are well-thought-out, achievable, and appropriate for your young company.
Furthermore, these sales goals will aid you, as an owner, to make steady, controlled, and healthy growth in your company – helping to ensure its long-term success.