How To Set Sales Targets with No Historical Data

 

Setting sales targets is a vital company task. These goals provide you with a defined purpose. They motivate your team.

They also indicate whether you're on right track. What if you don't have any historical data?

Assume you've recently started a business, introduced a new product, or entered a new sector.

It may feel like you're walking aimlessly. Don't panic; it's challenging, but not impossible. This post will explain to you how to build simple sales targets without using historical data.

Why Sales Targets Matter

Sales targets are more than just numbers. They're an essential component of a solid plan. They assist the entire team in establishing a unified agenda.

When the sales team has a clear goal in mind, their everyday tasks become more meaningful. These objectives aid management in revenue forecasting, decision-making, and resource optimization.

Without these objectives, you will be unable to determine how your company is performing or identify areas for improvement.

How to Set Sales Targets: Challenges

When past data is unavailable, the biggest challenge is setting a sales target. Most companies build their plans on previous performance.

For example, they examine previous year growth rates or seasonal trends. If all of this information is missing, we cannot blindly select a target number.

Setting a high aim might demoralize the team, while setting a low target can limit growth. Thus, we must put the past behind us and focus on future potential.

It can only be done by market research and with an understanding of the team's capabilities.

What to Include in Sales Target: Strategy

Setting strong sales targets, even without previous data, involves a few considerations.

Understand The Market (Bottom-Up Approach): Don't simply pick a number. First, figure out the entire market potential for your product or service.

Then figure out about how much of it you can catch in the first year. To get this, conduct in-depth research on rivals and consumers.

Analyze Team Capability (From the Top Down): Begin with your sales team. How many salespersons do you have? How many people can one person interact with in a day or week? How many of them are they able to turn into clients?

The answers to these questions will help you set targets. For example, if a salesperson makes 50 calls per day and closes 2% of the sales, they can get around one customer each day. Then multiply this by the number of your team.

Record Costs and Profits: Sales goals should be related to financial objectives. What is the product's average cost? How much revenue are you expecting?

Make sure that your goals are going to help you to turn into profit or at least prevent losses.

Mistakes to Avoid While Making Sales Targets for Your Company

When defining how to set sales targets without previous data, it is possible to make mistakes. Avoid them.

Randomly Selecting a High Number: Do not select a high number just because it seems good. This could demoralize your team. Targets should always be specific and based on market research.

Neglecting External Factors: Is your market really competitive? Or is the economy struggling? Even a decent plan can fail if these factors are not acknowledged.

Not Engaging the Sales Team: Your team is in the field, and they understand what is possible and what is not. Get them in the process.

At that point, they will see the objective as their own, rather than an order from above.

Avoid the "Set it and Leave it" Mistake: Many people believe they can just develop a plan and then leave it.

However, this strategy can lead to complications. Think about it, will everything fall into place automatically?

No, is that right? You need to keep monitoring it. Things change. Keep an eye on what you want. Make changes as required.

This will make the journey easier. This makes success more achievable.