Creating a sales target might seem like a very simple task for some who work from home. After all you can just pick a figure and work towards it can’t you?
Actually, there is a bit more to consider when setting yourself a sales target.
Why Create A Sales Target?
Knowing why it is important to set yourself a sales target is the first step in the process. If you don’t know why you are doing it you are less likely to take the process seriously. A common mistake that new business owners frequently make is to simply aim for “as many sales as possible”. However, the number and frequency of sales you make is probably one of the best indicators as to how your business is going. If you just aim for as many as possible how can you access your business properly?
As well as being able to monitor your progress sales targets help keep you focused on achieving your goals. Those who set targets are generally more motivated and more likely to succeed.
A well set sales target will also enable you to build your business over time.
How to Choose A Sales Target?
Firstly the amount of sales to aim for should be based on some calculations. What is the reason for you making the sales in the first place? Is it to help you pay your bills for example? If so you need to know how much these bills are. Is it to replace an income? If so how much is that income?
Of course many people start a business for reasons other than financial reward. A sales target however is directly related to the financial income side of the business.
Is Your Target SMART?
With any goal you want to work on it is a good idea to make sure it is a SMART goal, and the same goes for a sales target. A SMART goal is one that is:
Specific – With a sales target it is easy to be specific. A monetary amount is already specific as long as you choose a single figure. By this I mean not saying I want to sell around £500 – £600, instead make a clear decision. My personal sales target for example is £250 per month. Alternatively you could use a specific number of sales you want to make, such as 100 items per month, or indeed a certain number of customers. Any of these options are fine.
Measurable – Again a sales target is already measurable. You know when you have reached halfway to a sales target because it is a number.
Achievable – A good sales target will stretch you a little, but still be achievable for you. Make sure you consider any barriers such as other obligations.
Relevant – Is your sales target relevant to you? This takes you back to the reason you are making the sales in the first place. Does it cover a bill? Or replace your other income? What will it mean to you to reach this sales target?
Time Constrained – It is important to have a time limit attached to reaching your sales goal as this will help to keep you motivated to achieving it. Is your target per month? per week? per day? Only for one month? Do you want to reach £x.xx level of sales within the next 3 months?
What is Your Current Sales Level?
Knowing what your current sales level is will allow you to make sure your new target is achievable. It will also provide you with the information about what is required to hit your next target.
You should work out what your average sale value per customer is. The fastest way to do this is to make a list of the value of your last month’s sales, and then divide that number by the total number of sales.
Making this calculation will allow you to work out how best to reach your new target. For example, lets assume your average sales value is £8 per customer and you want to increase your sales by £100 per month. This means you need to aim for at least 13 new customers per month. 13 x £8 = £104.
If you are completely new to the business you can give yourself a target of 1 sale per day, or 10 sales in the first month etc etc.
Reviewing your sales target and your progress towards it on a regular basis will help you to stay on track. It can also be helpful to write a list of things that worked well or not so well after your time limit has expired. What helped you to reach your target? What got in the way of you reaching your target?
Setting yourself a sales target that is achievable means you can work on an ever increasing basis. Remember to nurture relationships with current customers as well as adding new ones so you are not simply replacing 1 customer with another. Pay attention to what it is that your customers are buying. Letting customers know if there is an offer available on their favourite product for example will help them to feel important to you. Everyone likes it when they are made to feel important!
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