Many sales leaders don’t plan at all. They want to plan, but there’s never enough time. Taking the time to plan would mean less time in the field with customers and sales staff — or, more important, less personal time at night or during the weekend. Dedicating time to planning leaves you less time for your other sales leadership responsibilities.

Planning for the upcoming selling year starts months in advance of the actual selling year. Good sales leaders not only have a plan for the selling year, but they also dissect the annual plan into smaller quarterly and monthly segments. They also break the annual plan into team- and rep-specific plans. They have a plan for each product within the portfolio. Good leaders even plan at the account level.

Make no mistake: Planning is hard work. But when you understand its importance and learn how to do it effectively, it can not only be the difference between hitting and missing a year’s sales target, but can also elevate you above your peers. For the next few pages, we will explore aligning the sales team’s efforts with the business plan, planning for the unexpected, and planning for success at the account level.

Understand Business Objectives

When you approach a new selling year, it’s essential that you understand the goals of the business. I doubt your CEO has told shareholders to expect the same results as last year. Even if last year was stellar, no two years are the same. Like your personal goals, the goals of the business change from year to year. When it comes to business goals, most sales leaders only think about sales targets and revenue. If you were to ask your CEO or board of directors to define business goals, you can expect a more comprehensive answer. When you think about business goals, it’s important to have a perspective broader than just sales targets and revenue. Most companies have stated goals for each of the following metrics. These are only a few of the common areas with stated business objectives:

  • Revenue per employee
  • Cost to acquire a customer
  • Employee turnover
  • Offering/product expansion
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA)
  • Debt-to-income ratio

Sales leaders must align their team’s selling efforts with the short and long-term business goals of the company. If you don’t adjust your sales plan to mirror the business goals, expect trying times in the future. It’s not enough to build your annual plan around sales targets. Other important factors that influence the how of your sales plan must be included.

You need to know how the business plans to be successful in the selling year.

  • Does the business have goals of expanding into new markets?
  • Is this year’s growth planned from selling a new product to the accounts we already have vs. acquiring many new accounts for your existing markets?
  • Maybe the business is maturing and this year’s plan is focused on improving earnings over aggressive revenue goals. How does your plan support this objective?

You need to know what your team needs in order to achieve success as the business plan defines it.

  • If the business plan shows growth from a new product, then do you need to consider building a speciality sales team for the new product OR is your existing sales team capable of selling the new product, too?
  • If the company plans to enter new markets, then do you need to hire additional sales people OR can the existing team maintain both existing accounts and the new markets?
  • Will you need new resources to be successful this year? Perhaps you need to attend a conference that wasn’t in last year’s budget? Will you need to invest in data that wasn’t required last year?

Spend time with the executive team to learn what success looks like in the upcoming year. Schedule a series of meetings with the finance and operations teams to participate in creating the annual budget. You must know the route the business will take in the next year, three years, and five years. If you don’t have a copy of the strategic plan, then get one. If a formal plan doesn’t exist, then challenge the executive team to create one.

When you engage with the executive team during the budget and planning season, they will see you as more than just “sales.” It will build your credibility as a leader, a team player, and a strategic thinker.

Once you know what needs to be accomplished in the upcoming selling year, and how the business plans to accomplish these objectives, then you can start mapping out your annual, quarterly, and monthly sales plans.

Build a Step-by-Step Plan

In Great By Choice, Collins introduces the concept of the 20 Mile March — dissecting a huge goal into incremental steps, and committing to taking those steps consistently. Similar to a 20 Mile March, a good sales plan has these requirements:

  1. Clear performance markers
  2. Self-imposed constraints
  3. Assess your available resources, only keep what you need
  4. Largely within your control to achieve
  5. A proper time frame long enough to manage, yet short enough to have teeth
  6. Imposed by yourself, upon yourself
  7. Achieved with high consistency

Take your annual sales targets (revenue and expense) and start breaking them down into smaller tranches. How granular can you get? Can you establish a quarterly target? Monthly targets?

Then assign your sales targets to each offering and different teams (even down to the rep level). Take your annual revenue (sales) goal and expense budget, break them down by month, and assign these targets to products and selling teams.

As you create your sales plan, pay special attention to the following traps:

Account for Seasonality

Does your business have slow periods during the summer or around certain holidays? If so, then take that into consideration when setting sales targets. Don’t sign off on a forecast that calls for the most sales in December, if you expect (and the data shows) that the holiday season has an adverse effect on sales. Commit to lower targets. This isn’t a sign of weakness, this is prudent and professional. In the restore chapter you will learn how to use the slower periods to restore your and your team’s energy, rebuild the team with training and development, and plan for the next selling year.

Be Aggressive, but Be Realistic

Don’t sign off on a 40% revenue growth if you don’t have the resources to achieve it. If you need additional budget dollars to hire more sales reps or upgrade systems in order to achieve a 40% growth, then fight for the resources. The planning phase is the time to ask for what you need. Don’t get halfway through the year and find out that you need more capacity on the team. This will erode your credibility.

Build a Buffer

Before you communicate the plan to the team, add some margin. You want to build a buffer between what the executive team or board expects and what you expect from the sales team. This isn’t being dishonest; this being prudent. In the next chapter we will cover communicating the plan to the team, but for now focus on building a buffer into the budget. Keep the buffer at 5%–10%; anything more than that isn’t realistic. It’s far better to miss the benchmark you’ve established for your team, and still hit the target promised to the board. Remember that the buffer doesn’t have to be equally distributed each month. As you account for seasonality, maybe some months require more buffer than others.

Plan for the Unexpected

Disruption is going to happen. Unforeseen circumstances will arise. How are you going to prepare and respond? If you deplete yourself and run your team to exhaustion, and adversity comes, you will be in serious danger. Don’t let your team push so hard to close business at the end of a quarter that they become run down, burned out and exhausted at the start of the next quarter. Hitting a quarter’s sales target at the expense of the next quarter is dumb. Remember that virtually nothing goes according to plan; we can’t possibly predict the things that will go wrong. Assume the plan will take longer and cost more than you expect.

Consistency over time is key. By sticking with your plan’s elements in good times and bad times, you reduce the chances of getting crippled by a big, unexpected shock. Instability favors the planner. This is when they really shine.

Have you ever pushed too hard when things were going well? What happened? Did you get burned out at exactly the time when you needed discipline and focus the most? Did your eagerness ever cost you dearly?

In a setting characterized by unpredictability, with both threat and opportunity, you can’t afford to leave yourself exposed to unforeseen events. If you’ve ever struggled to hit your sales plan, or if you’re tempted by a new opportunity, having a clear sales plan focuses the team. When you know the objective and understand its importance, you will be able to stay on track and win.