How do you set an appropriate revenue goal for your business?
We hear this a lot from our clients, and you may have asked yourself the same question. Sales and marketing campaigns are driven by your revenue goals. You’re going to judge the success of the campaign by whether you’ve met your goal. The problem is, we at Sales Partners find that these goals are often set arbitrarily.
That’s why we advise our clients to determine where they fall within the 3 stages of business. With an understanding of where you are now and where you’d like to go, you’ll have a better idea of what your revenue goals should look like at each of these stages of growth.
Stage 1: Survive
In the first stage, you’re just starting out and trying to survive. Can your business pay the bills? Can you keep the doors open from month-to-month or week-to-week?
If you make it past this first stage, it means you’re not only covering the bills but covering your own expenses, as well. When you can reinvest your reserves back into the business to grow and improve operations, you’ve reached Stage 2…
Stage 2: Sustain
Your business is now sustainable. You’ve got revenue coming in regularly; you know how to generate more revenue. You have solid business operations. You can deliver and you’re doing good work for your clients or customers.
At this stage, you can continue to do things the way you’ve been doing them for as long as you’d like. The truth is, you’ve got a bigger goal in mind: to thrive!
Stage 3: Thrive
In this third stage, your business is thriving. You are not only sustainable but have the opportunity to propagate. Maybe you expand, open another location, or hire new staff.
Or maybe you’ve reached the point where your business is completely running itself. Your team is a well-oiled machine. Now it’s an investment, and you can go off and do other things.
Revenue Goals at Each Stage
Revenue at each of these stages may look a little different for each of us.
If you’re just starting out, trying to “survive,” maybe your business only needs to make $20,000 – $30,000 in a year to cover expenses. The business may be a new venture you’re nurturing on the side. Maybe your revenue goal for Stage 1 needs to be closer to $100,000 if you’re working full-time and covering your personal expenses, as well.
When you’ve reached Stage 2, “sustainability,” your revenue goal could fall somewhere in the $100,000 – $500,000 range. It will depend on your industry. Of course, everyone wants to reach Stage 3 and break that million-dollar level in their business. The goal may ultimately be $10 million or $100 million.
Again, it simply depends on where things are with your business.
Setting New Goals for Growth
We’ve been running our business for about 10 years, and it’s only in the last 2-3 years that we feel we’ve reached “sustainability.” Now, our goals are changing… we’re looking at increasing revenue and operations to expand the business and hit some other goals.
So, ask yourself: Which stage best describes my business? What is a realistic revenue goal for my current stage? Don’t let anyone else tell you what your revenue goals should look like. Ultimately, it’s about where you are right now, and what you’re trying to accomplish.
If we can help you increase your sales or reach your business goals, send us a message and let us know. Have a great one!
