Eighty percent of companies will have higher sales quotas than the year before, but 40 percent of sales reps are going to miss their number.
Of all reps, 19.4 percent will be out of the job by year’s end.
Your products, prices, and competitors are all changing.
How do you plan to make the number amid such uncertainty? What head count do you need to account for turnover, missed numbers, ramp time, and more?
Sales planning starts with having the right model to track head count, costs, and projected revenue. The cost dimensions must inform the production needed from each rep in order for sales to break even; and the model must be dynamic enough to test all assumptions. The output of this work will not only answer the question of head-count planning, but also tell you what sales budget you need in order to meet your revenue goals.
The model you create should be informed by your CFO’s budgeting method (percentage of revenue, competitive benchmarking, objective-based, affordability, etc.), because that will determine the budget questions it needs to answer. You must continue updating the model throughout the year as the assumptions you have made give way to new realities and raise additional questions.
Regardless of which budgeting method you do use, the sales planning model should serve as a financial playbook for creating and executing your strategy.