When you are focusing on growing or scaling your business, a key piece of your strategic planning is goal setting and establishing your sales and growth targets. After doing strategic planning, specifically lean strategic planning, for more than 2 decades now, there are a few things I have found work especially well when establishing your targets.
How to Set Effective Sales Targets
I always recommend you set 3 sales targets rather than just one:
- BASE: This is the amount you need to make to run your business (and includes ALL expenses including payroll and paying yourself)
- TARGET: The is the amount you want to make to both run and grow your business
- STRETCH: This is the amount you dream of making to transform your business (it may be a stretch but it's possible)
As you define your plans and the specific projects and marketing campaigns you will be focused on, you will want to ensure you will hit your TARGET and build in ways to achieve your STRETCH.
It sounds simple in theory (and the best business strategies and tactics usually are!) but when entrepreneurs take the time to set their targets and build their strategic plans properly, they often realize one of two things:
- They have no idea IF or HOW they are going to reliably achieve their TARGET, or...
- Their current business model and their marketing and launch plan for the year doesn't even have them covering the BASE amount they need to keep their business running and meet payroll, including paying themselves
There are also key things that can get missed like understanding PROFIT when setting sales targets instead of just considering revenue.
Pro Planning Tip: Be sure you factor in your profit margin when setting your sales targets.
How to Set Effective Growth Targets
Growth targets are just what they sound like - where you will focus your efforts to grow your business. I recommend that you:
- Identify which specific channels you want to focus on growing
- Capture your starting baseline
- Incrementally track your progress in 30 day increments and re-assess your targets every 90 days
Pro Planning Tip #1: Many business owners set surface level growth targets like number of followers on social media, or number of people on their email list, and while these targets can translate into revenue for the business, there are other targets and KPIs that are much more meaningful and more directly tie to measurable results.
When setting growth targets, it's important to understand what your overall goals are so you know which channels and measures to focus on growing.
Pro Planning Tip #2: Always remember to K.I.S.S. - keep it super simple. Don't focus on growing everything. Pick the 1 - 3 growth targets that are going to have the biggest impact on your business and focus your efforts there. You can adjust as needed and should revisit at least every 90 days.
What you measure grows, so leverage the Dashboard in the 90-Day Lean Out Planner to establish and track your sales and growth targets, or create your own dashboard.
What are you focused on growing this year?
by Crista Grasso
Crista Grasso is the go-to strategic planning expert for leading global businesses and online entrepreneurs when they want to scale. Known as the "Business Optimizer", Crista has the ability to quickly cut through noise and focus on optimizing the core things that will make the biggest impact to scale a business simply and sustainably. She specializes in helping businesses gain clarity on the most important things that will drive maximum value for their clients and maximum profits for their business. She is the creator of the Lean Out Method, 90 Day Lean Out Planner, and host of the Lean Out Your Business Podcast. She is also the founder and CVO of the Profitable Planner Co and Criscara Jewelry.