The Goldilocks Paradox: Setting Smarter Small Business Sales Goals That Are Just Right
by Shawn Karol Sandy, on Sep 13, 2023 12:06:00 PM
There is a predictable pattern to the evolution of a small business’ sales progress—starting with those scrappy bootstrapping days of a business starting up—to achieving growth and success. Along the way you realize that scaling means producing consistent sales results and needs a concerted team, structure, tools, and metrics and, yes, GOALS to work towards. That’s not a linear path, though. The path to setting sales goals usually tracks more like this:
The Evolution of Small Business Sales Goals
- Sell something!
- Sell as much as we can!
- Sell everything!
- What did we sell?
- Did we make money?
- Can someone else sell these things?
- Let’s hire someone to sell this stuff!
- How much could they sell?
- I know a guy/gal we can hire! Here, go sell as much as you can!
- Let’s sell a billion dollars (misses goal and shrugs)
- Let’s see how much we sold last year and slap on 20%
- Let’s see what we sold last year, what the market outlook is, and assess the skills of our team…
Sound familiar? Or maybe you’ve lived this.
It’s a common pattern we’ve seen play out before Sauce clients come to us to help them build a solid and repeatable sales process for their sales program.
Any type of goal setting is a delicate balance of historical outcomes, hypothetical guesses, and ambitious stretches. It’s a bit like being Goldilocks and finding the porridge temperature that’s juuuuust right for your company right now.
It’s easy to swing the sales setting goal pendulum too far in each direction—playing it safe inhibits ambition and stretching your team. Unrealistic reach goals crush dreams and motivation when they aren’t reached.
So, how does Goldilocks set sales goals for the company?
Most any search of “goal setting” will have you start with the beloved acronym SMART:
Specific. Measurable. Achievable. Relevant. Time-bound.
Those are always excellent guardrails, but for sales goals—the fuel for propelling your business growth—we’re going to challenge you to go a little more in-depth with how you set and measure these critical numbers. First, you need to:
Build infrastructure for your goals
Which sounds a lot like saying, “You need goals for your goals?”—to which Team Sauce will nod our heads, “Yes, just like you need to document the process to document your processes” (real conversations overhead at Team Sauce HQ). Your goal criteria need to be documented so that you have some consistent anchor points with which to measure the WHY and HOW of achieving sales goals.
Trust me when I tell you that the WHY and HOW of sales goals matter almost more than the numbers you choose as the goal. Whether it’s you as the business owner or you have a sales, marketing, and customer service team—understanding WHY achieving the goals matters to keep the motivational fires stoked and articulating the HOW of achieving the sales goals gives you or your team a focused plan to keep on track and power forward.
With 20 some years of experience being a sales leader and then working with organizational sales teams, I can tell you that:
Without the WHY and HOW, sales goals can feel like a random number plucked out of a hat. Sales teams (and their counterparts) will struggle with connecting to the goal and internalizing it as their own—and even the smallest amount of indifference can lead to lackluster results.
So when building your sales goals, don’t forget to share the WHY and HOW with the teams that are going to be accountable to getting you there!
Next step, define the criteria to start building those sales goals.
Key criteria for defining your organization’s sales goals
- How do these sales goals align with our 1 year, 3, year, 5 year, and 10 year growth plan? (Hint—they usually determine how quickly you scale—leveraging cash flow and profit)
- What defines success? Is it hitting 100% of the goal or more? Is this a stretch and 90% is acceptable?
- What determines growth? Are we measuring revenue, profit margin, or both? (Hint—yes!)
- What will be measured? Number of deals, total revenue, growth of existing business, number of leads generated, outbound calls, conversion rates, leads to meetings/to proposals/to close? (Hint—you should probably be measuring all of these too)
- When will it be measured? Weekly, monthly, quarterly, annually?
- Who will measure? Directors? Managers? Owners? (Hint—also consider who will review and disect these numbers, such as other departments that collaborate and coordinate wth sales)
- What data source will be used? (HubSpot CRM…what else is there? Kidding, keep using those convoluted spreadsheets or industry-specific CRMs that limit your growth, or Quickbooks, NPS Surveys...)
- How will sales goal outcomes impact the future? This determines capital investments, hiring, upgrades, equipment, celebrating wins, putting snacks in the break room (or upgrading to 2-ply TP).
- How often will the goals be evaluated? Weekly, monthly, quarterly, annually?
- What will happen if it becomes clear the sales goals were set too high, or too low? When do you adjust or do you “do or die” with these goals?
- Do we have lagging and leading goal measurables? (Hint—you need both! Lagging: did we hit the goal? How far off or far over were we? Leading: are we converting at a rate high enough to hit goals? Are we making enough touches? Do we have enough targets?)
- What is ahead that could impact our sales efforts? Think forecasting market trends, industry seasonality, learning curves of new hires, new products or offerings.
- What has happened historically that could impact sales efforts? Delivery or production issues, last month/quarter/year’s sales results, loss of clients/attrition, new clients ramping up…the list goes on.
We know it would be much easier to say that setting sales goals is as easy as picking a percentage that makes sense compared to last quarter or year. Then after the quarter end or year end, you see if you hit the goal, exceeded it, or fell short.
Yes, that would be easy but that doesn’t give your business or your teams the inspiration to charge head first into achieving those goals—and you’re lacking the insights that provide agility to make adjustments to achieving your goals or know when to move the goalpost.
Crush Your Sales Goals With Sauce Agency
If you find yourself in this Goldilocks paradox and aren’t sure how to build inspiring goals that will propel your business into the next stage of scalability—reach out to one of Sauce Agency’s certified Growth Guides, who will help you build your sales goals that are juuuust right. Click here to schedule a connect call!