It’s simple math to divide an annual revenue goal by 12 to create monthly goals. Smart leaders understand that when people can put their arms around a goal, they’re more likely to meet it. And doing the math in reverse, logic tells you that those smaller goals will add up to the annual goal you set. Makes sense.
After years working with business owners to accelerate revenue growth, I find myself disagreeing with the practice of every monthly goal being the same. Too often the pursuit of the monthly revenue goal precludes the company from spending any time devising and designing new ways to generate that revenue. Creative thinking, experimentation, and other applications of ingenuity that could change the game are pushed to the side or rejected because of the pressure to meet the monthly goals.
Consider a different approach. One company set their year-end goal, $1.8 million. This is $150,000 per month. Instead of setting monthly goals at $150K for all 12 months, they started with $100,000 in the first month. Each subsequent month’s goal was somewhat higher than $150,000 in order to reach $1.8 million.
During the first month, the sales team (CEO and 2 account managers) spent about 20% of their time:
- analyzing their past year’s activities;
- evaluating them on a scale from 10 down to 1, in terms of effectiveness
- asking what should we stop doing
- asking what else can we do
While they continued with their typical sales activities during the remaining 80% of their time, having the 20% (8 hours per week) specifically designated for creative thinking and developing new ideas, freed them to invest in these new ideas. This team of 3 devoted 24 hours collectively per week to create new ideas, experiment, plan and detail implementation for the months ahead. It was exhilarating and energizing.
At year’s end, the company’s revenue was $1,902,600, which is 5.7% more than goal. That $102,600 represents the value of that investment in creativity early in the year—a whopping $1020 per hour! Reducing the first month’s revenue goal in order to make time for creativity and planning paid off big.
Set non-equal goals for your company
You can begin setting non-equal goals at any time. Why not this month? What is your revenue goal for the next 12 consecutive months? Divide by 12, then take 15, 20, or 25% off the first month. Spread that out over the remaining 11 months. This does not have to be scientific or pass muster with a financial guru. Do your best.
What is most important is how you spend your time in the first month. Assuming a 40-hour week, set some of it aside for creativity, planning and implementation. I recommend 8 hours, spread over two or three blocks each week. That keeps everyone comfortable about the rest of their work getting done, and it ensures that you meet at set times.
When I facilitate meetings like this, I start by asking:
- What are your typical revenue generating activities?
- How much time do they consume?
- How do you measure and track results?
- What is the typical sales cycle?
- Do you have a profile of the perfect fit client or customer?
- How well do you know your current buyers?
- How well do you leverage your current buyers, asking them to buy more, buy bigger, or both?
Then the group ranks activities by effectiveness and decides what to kill and what to keep.
The next step is the most exciting: creating new ways to generate more revenue. I emphasize thinking inside the box—that is, using the company’s resources intensively and often before going outside.
As the month comes to a close, we write a plan that includes the best new techniques; who, when and how, and benchmarks for activities.
It’s Your Turn
You know there are creative and inventive ways to generate revenue, if only you “had the time.” Make the time to design and implement them and enjoy exceeding your revenue goal in 12 months’ time.
If you’re open to a conversation about how I could work with you to set non-equal goals and make the time for creativity and inventiveness in sales, I would love to hear from you. 703-801-0345.