Planning for the next financial year? Ask yourself these 3 questions
As a sales manager, the end of a financial year and planning for the next one can feel like you’re being dragged across sandpaper in a crowded room: it’s busy, it’s stressful, and it hurts.
We’re not going to tell you that following 3 simple steps is going to make planning for the next financial year a breeze. But, if you think about these fundamental questions, it might help clarify how you can achieve growth and success in the coming year.
Question 1: Where are you now?
You can’t plan for where you want to be unless you know where you are! And yes, looking at your key metrics is essential. Gather data on key performance indicators (KPIs); which ones your choose will largely depend on what you planned to achieve in the last financial year – or what you want to achieve in the next one. Overall, you’ll want to ensure that you consider:
Performance: How much revenue did you generate? What was your average deal size? What were your sales conversion rates? The average sales cycle length?
Markets: Are you selling largely in the academic space or are you doing well in industry? Do you sell mainly to biotech? Or maybe you’ve done surprisingly well in healthcare?
Customers: Are your best customers still your best customers, or have they changed?
Products: which products have sold well and which haven’t?
There’s lots of different frameworks you can use to give you a comprehensive view of the current state of affairs. One of the most useful and popular frameworks is the SWOT analysis, which helps you identify your Strengths, Weaknesses, Opportunities and Threats.
It’s important to remember thar metrics are important, but utterly useless unless you delve deeper. What went well? What didn’t? And most importantly… why? Interrogating your metrics and understanding your performance will help you identify where and how you can plan for growth in the future.
Question 2: Where do you need to be?
It goes without saying - you always have to look for growth in sales and it’s likely that your target will reflect this. If you haven’t got your target just yet, don’t let that deter you from planning for next year. You’ll be able to make a decent estimate from company growth expectations and/or historically, how much your target has gone up by in the past – you won’t be that far out!
Your target essentially represents where you need to be. Use it to define your and your team’s objectives for the upcoming year. This isn’t just a revenue target – it could be market share, entering new territories or new vs. existing customer ratio.
Clearly defined objectives provide direction and purpose for your sales team. To be truly effective, your objectives should be SMART:
Specific: The more clearly and precisely the objective is defined, the easier it is to understand and work towards. Specific goals answer the questions of "what," "why," "who," and "where."
Example: "Increase quarterly sales by 15% in Northern Europe by acquiring new clients and expanding existing accounts."
Measurable: Goals should be quantifiable, allowing progress to be tracked and measured. Including specific metrics or criteria helps in assessing whether the objective is met.
Example: "Achieve a customer satisfaction rating of 90% or higher based on post-purchase surveys."
Achievable: Objectives should be challenging but realistic. An achievable goal motivates and fosters a sense of accomplishment when achieved.
Example: "Increase monthly lead generation by 20% through improved conversion strategies."
Relevant: Goals should be aligned with overall business objectives. A relevant goal ensures that efforts contribute to the organisation's success and are meaningful to the team.
Example: "Launch a new product line to tap into an emerging market segment and enhance overall company growth."
Time-Bound: Goals should have a defined timeframe or deadline. This creates a sense of urgency and helps prevent procrastination. It provides a clear time frame for evaluation and allows for any necessary adjustments.
Example: "Reduce customer response time to inquiries to within 24 hours by implementing a new customer support system within the next quarter."
Question 3: How do I get there?
If you do the same again, you’ll get the same result. So ask yourself – what am I going to do differently?
Your analysis of current performance should give you a good idea of the areas you need to capitalise on… and the areas that could do some work. But now it’s time to make it actionable. If you performed the SWOT analysis, for instance, you can ask yourself the following:
Strengths: How do I leverage?
Imagine your company has invested in state-of-the-art technology which makes your supply chain extremely efficient. You can ensure that your sales team have the knowledge and data to show potential customers you are consistently reliable at supplying goods and are able to respond adeptly to increases in demand.
Weaknesses: How do I mitigate?
For example, if your biggest weakness is prospecting and you want to increase your new customer base next year, then consider how you can motivate your sales team to increase their prospecting efforts. You could set specific prospecting targets, make it a friendly competition and invest in training your team to increase the effectiveness of their prospecting.
Opportunities: How do I exploit?
Let’s say you’ve identified a growing market demand for reagents in sustainable packaging – and while your products are packaged in sustainable materials, it’s not something you advertise. You could organise a training session with your sales team to ensure they are knowledgeable about the your sustainable products and the company's commitment to eco-friendly practices. And, you could collaborate with marketing to develop a targeted marketing strategy.
Threats: How do I mitigate?
For a sales manager, a significant threat could be an economic downturn that negatively impacts customer spending. You could consider offering flexible pricing structures, discounts, or bundled packages to address the price sensitivity of customers without compromising overall profitability.
And finally, if you fail to plan you plan to fail...
Whether your business asks you for one or not, you should always have a written plan. We’ve come across too many sales managers who say they have a plan but it’s just in their head. As a sales manager, your role in planning for the next financial year is pivotal to the success of your team and the organisation as a whole. So make sure it’s clear, specific, achievable, it’s shared with your team your managers and other groups that you rely on for your success – and it’s written down!
Need more inspiration?
Why not give our podcast a listen. Episode 6 - Kick Start Meetingswill give you some insight into how to bring people together, get everyone aligned on business & strategy and get your team geared up for a successful 2024.
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