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Setting unrealistic or inaccurate sales targets can have a major impact on a business. Not only can it affect cash flow, but also it can ruin management’s credibility and leave sales teams lacking motivation, either because they consistently underachieve or easily over-achieve.
In order to accurately set sales targets, organizations should consider adopting a variation of zero-based forecasting, where each period is treated independently, free from strong historic biases. While it can be initially more difficult to implement, its results outperform other methods and the process becomes much easier in subsequent years.
Consider the following five factors to set realistic sales targets:
If your revenue expectations are not in tandem with what you can reasonably expect from your sales force, you will of course have to consider hiring new staff. With this comes a series of other factors that need to be considered, such as ramp-up time.
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
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