How do I set revenue targets?

Dear Aunt,

I am trying to set my revenue targets for the year. I am finding it more difficult than ever before because of the economic uncertainty. I have set quite high targets which, in a normal year, I would be confident we could achieve. But this year it feels like I am firing at a fast moving target. I also don’t want to demoralise the team.

Aunty, can you look into your crystal ball and tell me how I should approach this vexing problem? I sell B2B.

Vexed in Vic

Dear Vexed in Vic,

When you set revenue targets you need to feel confident you can reach them. But you also need to set targets that stretch you. And then you need to set separate targets that stretch your sales team.

So to answer your question, you need to feel comfortably stretched but not come up with revenue figures that you think will be impossible to reach.

Hopefully you know your business well enough to do that. The B2B market is going to be hard in the next six months so I would plan a little conservatively, with a bit of a pick up in November when activity will increase as people restock empty inventories.

It can also be a good idea in this environment to get your accountant to do a contingency line so that you have a little wiggle room.

I know things are tough now but it’s important to hold your nerve. And do you know something? I get the feeling that you can reach those high targets. So go for it.

Your Aunty B

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