It’s the most wonderful time of the year. The time when we wrap up the remainder of 2023 with a nice little bow, and CEOs and executives start talking about “the number” for 2024.
If you’re the head of sales, you already know what gift you can expect from company leadership heading into the holidays. A shiny new sales number for 2024 that makes you scratch your head and think:
“Where did they come up with that?”
It’s an all too common scenario in small to mid-sized companies. A number is chosen based on how much the business “should” grow next year rather than being selected from data and actual sales numbers from the previous year.
Much like an unwanted present, once the executive team hands down an unrealistic sales number, it’s hard to return it. As a sales manager, how can you give yourself (and your company!) the gift of a realistic sales plan heading into the new year?
Follow the steps below to create a bottom-up forecast for 2024 and proactively manage expectations by presenting a sales plan backed with facts and figures – no regifting necessary!
STEP 1
Study What is Going On in Your Specific Industry
Creating a realistic sales plan for 2024 involves researching and considering the current and future demand for your particular product or service in your specific niche.
Future sales and business growth depend heavily on the overall health of the industry in which your business operates. Some questions to consider when creating your forecast for 2024 include the following:
- Is demand increasing for the product or service we offer in our specific industry?
- Do we anticipate our industry will continue to grow and evolve?
- Could demand for our product or service decrease over time as the industry ages?
STEP 2
Understand Your 2023 Sales and Pipeline Metrics
You can’t create a sales plan for the future without first understanding what happened in the past. Key metrics you’ll want to review before making your 2024 sales plan include:
- What is the average size of deals that closed in 2023?
- What is our close percentage rate for qualified opportunities?
- What is our average sales cycle time?
- How big is our current sales team?
Understanding your 2023 sales and pipeline metrics will give you the facts and figures required to create a realistic overview of your sales team’s achievements over the current year. It can also identify areas of struggle where opportunities for additional sales revenue may have been missed.
STEP 3
Review Your Current Sales Pipeline for 2024 Opportunities
The end of the year doesn’t mean the end of qualified opportunities in your current sales pipeline. Reviewing your existing pipeline to identify and generate opportunities into 2024 can create a strong starting point for the new year, help determine a new overall sales goal, and provide a general indication of where you should expect to land by December 2024.
STEP 4
Manage Up
Taking all the data and metrics you’ve gathered in the previous steps, it’s time to manage up.
Managing up is not about going above your boss’ head to have your voice heard or creating tension in the workplace. When done correctly, managing up makes the executive team’s job easier by clearly presenting the facts and data they need to make an intelligent, informed decision for the company’s benefit.
Good decision-making comes from good data. Presenting facts and figures to your leadership team based on the reality of 2023 and using that information to decide on a new number for 2024 creates an obtainable sales goal for the new year.
Summary
Creating a successful 2024 sales plan requires a bottom-up forecast to make future projections based on historical data. By studying your current industry, your 2023 sales metrics, and your existing pipeline, you can present your leadership team with a sales number for 2024 that is both realistic and achievable.