No matter how skilled you are, you only hit a target if you aim.

How do you set your annual sales targets? If you are like most business bosses, you just use the same number as last year, or perhaps the same number plus 5 or 10%. It works – you know it works because most of your sales people hit their targets. But are you leaving money on the table? How were last year’s targets set? The same as the year before with perhaps a little adjustment? And how were these prior year’s targets set? Go back in time and check: When were your original sales numbers set and how were they established? Are these parameters still relevant?

In today’s fast paced business world, things change rapidly. It’s a rare business sector where nothing significant happens over the course of a year – and in many sectors, change occurs more rapidly. Much happens that can affect your business, ranging from natural disaster, changes in government legislation, new competitors and key customers facing cuts backs, which can all impact your bottom line. Not all changes are negative – some may offer you increased opportunity. Do your business systems allow you to capture and quantify these changing opportunities?

When you keep on top of your market, the benefits to the business are considerable and setting sales target appropriately should reflect your understanding of this market. In response to change, you can finely tailor your products or services to suit the new needs – lower or raise prices in accordance with market trends and focus your efforts where you have the potential to realize greatest returns.

It’s not just your business as a whole that will benefit. Good sales people like to succeed; it motivates them. If you regularly set sales targets that are ‘easy’ to achieve, the challenge disappears. Not only do you make less money than you might, but your sales staff lose motivation. Conversely, setting unachievable targets is also demotivating and you may lose your sales staff as well as potential income.

Getting it ‘just right’ can be a challenge – but it’s well worth regularly assessing and fully understanding your market, your customers and the competition in order to get it right. It takes regular application and practice. Think about it. What would have happened to William Tell and his son if he hadn’t practiced and become an expert archer? Isn’t it worth making the same effort for your business?

How do you set your sales targets?

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