Avoid This Costly Mistake When Setting Your Sales Goals

A sales goal is crucial for your business’ success. Today we’re going to be talking about finding your true sales goal. 

Have you ever gone to a build your own pizza place? I am a blaze girl myself, that barbecue chicken pizza is so good! Have you ever gone to your pizza place and seen the base menu price for $10 and thought, “Oh, wow, that’s a great deal.” So you go through the line and you add your toppings like mushrooms, crushed garlic, a little pepper, a little black olive, and maybe some pineapple. You get to the checkout and realize that the cost of your pizza is $25. 

What happened? You thought it was $10, but you forgot some things. You forgot about the toppings and how that’s an extra charge. All those little extra charges add up. This is what business owners do over and over. They forget about the toppings when they start to price their services and create their sales goals. Often I see business owners think, “My sales goal is just going to be what I want to pay myself.” Well, no, because you’re forgetting the toppings of things like taxes and your expenses and investments. All of those pieces, all of those toppings are really important when we talk about creating your true sales goal.

So today we’re going to pull all of these things together. Now, if you’re thinking this sounds like a lot of calculations and a lot of math and you don’t like it, go check out my new tool Take Home Target because it’s going to do all the calculations for you, which is really awesome. It makes it simple so that you only have to plug in a few boxes and then it just auto populates from there. 

Your hope for the future

We are going to do a little projecting here. This is a fancy term for forecasting – or your goal or hope for the future. What I want you to do is start with the amount that you want to pay yourself for the month that you’re working on. Let’s say you’re working on your March sales goal. First, I want you to think about how much you want to pay yourself. Now, this truly is how much you want to transfer from your business bank account into your personal checking account. If you run payroll, this is how much you want to pay yourself gross for this month. 

Let’s say for example, that this amount is $5,000. You want to pay yourself $5,000. That’s what we’re going to start out with. Then the next step is to add in your taxes. A good average to use here is 25% of that. If you have a better number from your CPA, go ahead and use the most accurate percentage that you have. If you don’t have one, that’s okay. 25% is pretty much industry standard. So that is an okay average to use. So we need to add 25% in for taxes on our $5,000, which comes to $1,250. As you can see, we already have over $6,000 that we need to account for in our sales to pay ourselves $5,000. But we’re not done yet. We still have more toppings to add to this pizza. 

The next step is to grab your average monthly expenses and add that back into this calculation. If you know that your average monthly expenses are about $250 for this example, then that is what we’re going to add also into our sales goal, as well as your average investments that you want to make. Let’s say you have big dreams and goals for this year, that number for you is  $1,750 average per month that you want to invest into your business. So, as you can see, we are already at $8,250 as our sales goal for this month. That’s a lot different than $5,000, which is what you wanted to pay yourself. 

Now, one other thing I like to note here is that this isn’t a foolproof calculation. You might be thinking, ”Well, I had some of the investments on my wishlist, but I really want to make that first payment this month.” You may want to go ahead and add $1,000 or whatever that first payment is, if that’s what you choose to sign up for, for that specific investment, if you don’t have the cash saved for it already. Then you’ll be able to add that end to your goal and be able to make sure it’s covered.

Once we have this sales goal number, it is helpful to have that number in front of you as you are having discovery calls, are launching something, or as you have packages that you’re selling. It’s so much simpler to have the goal number just right there in front of you. I’ve seen clients write this down. Some print this off somewhere. I’ve seen clients then go back and write down how much revenue they made in a day based on the number of contracts that were signed or the number of products that were purchased. It makes it even more exciting and empowering that you have a goal, but then two, to start meeting that goal. 

Go ahead and work through your take home pay, your taxes, your investments, and your expenses, and see what number you come up with as your monthly sales goal.

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