Why your sales plan isn’t a sales plan (and how to write one that is)
Most business leaders have a sales plan of one type or another. Some are sophisticated, detailed documents that provide an accurate forecast of the year’s outcomes. At the other end of the scale you have the company owner who says their sales plan is “in my head”.
Some, obviously, are better than others. Some aren’t sales plans at all. So in this post we’ll look at how to write a sales plan that works, whether you’re a small business owner or leading a sales team.
My sales plan is in my head
If your sales plan is in your head, it’s not really a plan. Not that there’s necessarily anything wrong with your thinking, but if it’s in your head you can’t…
– Take it to a bank for investment
– Make financial predictions for your accountant
– Ensure your team understand it, believe it and are working every day to deliver it
It might feel liberating not to have to commit to a structured sales plan. But that sense of freedom today can come to feel like handcuffs tomorrow when you can’t access the funds you need or deliver the customer growth you promised yourself.
As we call ourselves Untangled we really do encourage people to keep things simple, but putting in place the right amount of structure and goal setting is a recipe for success.
When is a sales plan not a sales plan?
This is a client conversation we come across quite frequently. To give credit where it’s due, it’s a step up from taking delight in not writing anything down.
People in this situation have a business plan in the sense that they can explain to a listener the hockey stick growth curve they expect to be on over the next three years. “This year we’ll grow 20% again and in three years we’ll have doubled our turnover!”
Great. Except that’s a target, not a plan.
It’s a financial outcome without the activity inputs that will ensure it becomes real.
How to write a sales plan: the six essentials
Of course a sales plan needs to end up with a financial aspiration. But a target only becomes a plan when these six things are in place:
1. The growth is attributed to specific customers or channels
2. It has the necessary resources of people, investment and time
3. The activities needed to make each win quantifiable are clearly defined
4. The plan is timed, with revenue broken down at least by quarter
5. Contingency is built in, with regular reviews and corrective processes
6. Marketing and sales activities are connected, so that generating X new leads results in Y new orders
Sales target vs sales plan: examples
Let’s look at each of these planning challenges and illustrate what the difference could look like:
| Sales target | Sales plan |
| We’re going to grow 20% this year | We’re going to grow our existing customer base by 5% through introducing new services A and B. Then we’ll deliver new business of 15% through opening up 20 new customers with an average value of £100,000 |
| We might need to recruit another sales person next year and invest more in marketing | To deliver the growth we need we’ll need to upweight how we service our existing customers. We’ll also need someone who can find and onboard our new customers. They’ll spend 50% of their time prospecting so we’ll need a hunter. In turn that will need marketing support through materials and exhibition stand attendance |
| If we can improve our conversion rate by 10% we’ll be halfway to our target | If we target new customers our conversion rate will decline. To keep it the same we’ll need to invest in sales training for our team [link to Sales Training page]. It’s important we track each stage of our pipeline for these new leads to understand the length of the sales cycle and to establish customer lifetime value |
| We hit £800k this year so next year it will be £1m | We’re averaging £200k per quarter but we always have a big summer. To ensure we’re on track for £1m we’ll need to start the year fast and still need to deliver £600k between July and December to make that goal |
| We always find new business from somewhere | With the detailed customer plan we’ve built for next year then £1m looks achievable. There are a few projects we’ve not built into budget so that gives us contingency to offset any unexpected problems we hit during the year. We’ll hold full review meetings every quarter so we can see which initiatives are on track and what new initiatives we need to accelerate |
| We want to bring in one new client per month next year | We’re currently generating about 10 new enquiries per quarter and the sales team convert maybe two of those. To hit our plan this needs to be a minimum of one per month so we’re investing more money in Adwords at the same time as aiming to improve conversion rates via our sales training |
In most businesses, the quickest growth opportunity is from nurturing new clients rather than from pinning all your hopes on new business development. A sales plan built on the principles above helps you think through where growth is really going to come from.
What does a good sales plan look like?
A sales plan doesn’t need to be a weighty document. If you’re in a small business it might run to just a few pages.
It needs to be more than just a number, though.
By all means take that number and place it in a highly visible position on your office wall. It’s always good to have a motivational target.
But to maximise your chances of success that target needs to have a documented plan behind it.
That sets out what customers the growth is coming from, the activities and skills needed to make it happen and the tools and measures to track it.
It’ll take a bit more work at the start of the year, but it will save a lot of stress when month end comes around. And if you don’t have the bandwidth to build it yourself, a part-time sales director can do the heavy lifting with you.
Remember the sales target is your destination. The sales plan is your route map.
Not sure where your sales plan is letting you down? Take the Untangle Your Sales scorecard and find out in under three minutes.
Sales plan FAQs
What should a sales plan include?
The customers or channels your growth will come from, the people and budget needed to win them, the specific activities involved, revenue broken down by quarter, contingency for when things slip, and marketing measures connected to sales outcomes.
How long should a sales plan be?
For a small business, a few pages is plenty. It needs to cover the six essentials above, not fill a binder. A one-page plan you review every quarter beats a 40-page plan nobody opens.
What’s the difference between a sales plan and a sales strategy?
Your sales strategy sets out where you’ll compete and why customers will choose you. Your sales plan sets out the specific customers, activities, numbers and timings that will deliver it over the next 12 months.