Goal Setting Is Powerful!
If you are doing it, this will help. If you are not, now is the
time to start.
by Steven C. Bursten
The New Year is the perfect time to plan your goals. (Actually, the perfect
time was last October, but you were probably busy back then). If you are
uncertain how to set goals for your business, this article will tell you
how, step by step. Once you try it and experience the results, you will
never go back.
I have taught this system to hundreds of business owners. Those who use it are
hooked for life. They feel in control of their businesses as never before. Now,
you can make 2006 the best year of your business career and set a foundation
for lifetime growth.
If you are a reader of my articles you know the basis for improving business:
keep records of appointments and customers sold; from your records set benchmarks
for your existing performance; then set new goals to improve yourself; and, finally,
visualize your plans with mileposts to achieve your goals.
Along with this column is a special form—a tool—to help you manage
and measure the three critical factors for building your sales: 1) appointments;
2) closing ratio; 3) average size of customer sale.
The idea of this form is to begin with your current sales performance. It is
essential that you use factual records or the exercise is fruitless. If you are
not now tracking your appointments and number of sales, go back for about 30
appointments and use that as a baseline. Then count how many customers were sold,
total your sales for those customers and you are ready to begin.
This year dozens of small and large businesses have used this tool. The comments
I have heard most often, were like the one from Susan Day in Illinois, “I
didn’t realize how few appointments it would take to have a good business.” When
you set goals correctly and manage the size of sale you will discover that only
two to four new appointments a week will give you an excellent business and high
income. So, let’s get right into it!
GOALS PLANNING FORM
Begin on the top line if you have records from the entire year. If not, use whatever
period of time you have. The important line is the second one: Your current monthly
Step 1: Enter your appointments, closing percentage, number of customers sold,
average sale and total sales for the time period you have available. Let’s
assume you had 100 appointments last year, about two per week. Let’s assume
your closing ratio was about 67 percent or two out of three, and your average
sale was about $1,500. That means your total sales for the year were $100,000.
Step 2: Enter the monthly average. If your sales are for the full year, divide
by 12. If only for two months, divide by two.
Step 3: Enter your sales goal for 2006 at the bottom right. Let’s assume
you want to increase to $150,000 this year. Seems like a big jump. You would
have to have a 50 percent increase in appointments if nothing else changes .
. . but, let’s look at other options. Appointments are not easy to find.
They take time and money, yet maybe it is worth a little effort. Let’s
see how it works.
Step 4: Enter your sales for the second half. My experience is you probably will
sell a little over half your sales in the second half. So let’s assume
that 52 percent of sales will be in the second half and 48 percent in the first
half. Enter $78,000 for the second half sales.
Step 5 and 5a: Enter your fourth quarter sales. Experience tells us that each
quarter in the second half of the year will be about equal. Sounds strange knowing
how strong the fall season is, but with sales falling off in December, it actually
works out for many businesses. So enter $39,000 for your third quarter and fourth
Step 6: Enter first half sales—48% x $150,000, or $72,000.
Step 7 and 7a: Enter first quarter and second quarter sales. Same principle,
divide the quarters equally for $36,000 each.
PAUSE AND REFLECT
OK, we have done a lot already. We have a plan for sales for each quarter. You
can break the months down from here. Just adjust for your busy and weaker months
sales. If we never went further, you could be way ahead for the year just to
have an annual and quarterly plan. But, let’s not stop. Let’s see
how easy it will be to achieve your plan. It is all in the numbers.
Step 8: Set your goal for average size of sale. This is the most important step
of the entire exercise! You may be surprised that increasing closing percentage
is not more important. You will realize why when you fill out the form.
Let’s assume you want to increase your average sale by just $200 per customer.
If you average $1,700 for the entire year, you want to plan steady improvement.
That means you will be less than $1,700 per sale in the first half and more than
that in the second half. While it is not mathematically exact, let’s plan
to improve by $100 each quarter. Since you are starting at $1,500, by the end
of the year you will have a $1,900 average sale and your overall for the year
will be roughly $1,700.
How can you increase your average sale this much? Educate yourself to sell add-ons.
Attend sales training by industry leaders who focus on this one aspect. Also
check out www.windowcoveringsuniversity.com. It can pay giant dividends the rest
of your career.
Step 9: Now, it is simple arithmetic. From here all you do is divide your quarterly
sales by your average sale for each quarter. That will tell you how many customers
Step 10: Same thing, simple arithmetic—divide the customers you need by
your closing percentage and you will see how many appointments you require.
See how simple it is to plan your year? The next step is to visualize your plans
to achieve your plan.
$20,000 MORE NET PROFIT FOR YOU!
Now, look at what you have accomplished: You can see that all it takes to achieve
your goals are two to three more appointments per month and less than 15 percent
increase in average size of sale. Yet the result is a $50,000 increase in sales!
If you earn 45 percent gross profit, you can afford to spend five percent of
your increase on advertising and still earn $20,000 more for yourself. Pretty
good pay for a few hours setting goals and planning how to achieve them.
No question, you can do this. Never again do you have to experience that panicky
feeling that you are out of control. And, here is the best part: when you achieve
your goal for increased average sale and your appointments hold steady at 11
a month, you actually will be above your goal! And, you will be on your way to
$200,000 next year! So, plan for 2006 today and enjoy the benefits the rest of
your business career!
WINDOW COVERINGS SALES CONSULTANT GOALS PLANNING FORM
1. Establish a baseline of three to six months. Set
the baseline numbers in the row for Current Year.
2. Set new sales goals by calendar quarter first. Then divide
sales by average sale to determine customers needed.
3. Set goal for closing rate and divide customers required
by closing rate to determine appointments needed. Do not set goals
too high. Make them achievable first. Then, as you build confidence,
push yourself higher. Goal setting should be a confidence-building
exercise to show that you can control your business.
||No. of Appts.
||No. of Custs.
||Average Sale ($)
||Total Sales ($)
|Total First Half
|Total Second Half
This article is based on Steven C. Bursten’s actual experience
with sales and financial information working with hundreds of window
Whether you are a sole manager who aspires to higher sales, or you manage 50
window fashion decorators in a multi-million dollar business, this series will
help you manage sales better and increase your profitability. Bursten is the
retired founder of Decorating Den Interiors and author of a how-to book on new
business start up, “Bootstrap Entrepreneur,” and is a leading expert
in window coverings marketing, sales systems and sales management through his
company, custEmers.com. Questions and comments welcome: firstname.lastname@example.org or call (888) 333-8981.