Responsible for a Sales Budget? Here Are The Best Ways to Spend Your MoneyLivespace
Sales budgeting is crucial for any business. In fact, companies with accurate sales forecasts are more likely to grow their revenue year-over-year and hit quota. Basically, the more accurate your sales forecast, the better for the whole company—as everyone can easily check whether the sales team is on track to reach the targets and increase revenue.
That’s not the only reason behind preparing sales forecasts, though. Businesses use sales budgets for different purposes: mostly to estimate earnings, set department goals and estimate production requirements.
No matter the exact reason, one thing is certain—sales forecasts play a big role in the overall budget of every company.
How to prepare a sales budget
Typically, sales forecasting is the first stage in preparing a master budget for a business. In order to start the whole process and create a proper sales budget, you should figure out a few things first:
- Select a timeframe for your sales budget. It’s quite common to prepare an annual sales budget, but some companies still prefer to have quarterly or even monthly sales budgets.
- Collect data on your company’s past sales. This step won’t work if you’re just starting out—but if your company has been on a market for some time now, you should be able to access past sales records and draw conclusions from them.
- Do your research. Take a closer look at the state of the market, current trends, your competitors, and customer preferences to have a full picture before you come up with a sales budget.
- Listen to your customers. Collecting customer feedback should help you identify any potential issues and areas for improvement that might be worth investing in in the near future.
- Consult the sales forecast with your sales agents. Getting insights from the whole team can be extremely valuable when preparing a sales budget, as your agents might see things a bit differently.
- Write all the numbers and insights down. You can simply use a spreadsheet for listing deals that are guaranteed, likely, potentially, and unlikely in the upcoming months.
All these details should help you estimate your sales budget. Nevertheless, it can be quite difficult to take everything into account, especially at first. Plus, since your sales forecast actually contributes to the master budget of your company and helps to manage the business more effectively, sales budgeting might seem overwhelming.
In order to make it easier for everyone who’s responsible for creating a sales budget, we’ve listed a few important matters that you can take into account to spend your money wisely.
What should you be investing in?
1. Sales team training
Developing and maintaining a successful training program for the sales team should be one of your priorities. Basically, the more engaged your sales team, the better for your business—and 65% of employees say the quality of training and learning opportunities positively influence their engagement. Given that in the US alone companies spend $15 billion each year training sales employees, and $800 billion on incentives to retain talent: you might want to put some money aside for the training program as well.
Speaking of staff training and incentives —a reward program could definitely help your sales team reach the business goals faster. An example of this could be ranking and rewarding the top few monthly sellers with a small prize. Think your rewards through, though, as they can turn out to be costly and irrelevant. Find a solution that many people can take advantage of without breaking the bank —most of the time all it takes is a small change to bring better results.
3. Powerful sales tools
From lead generation to closing deals—information and communication are crucial to making data-driven decisions that influence your business (and your budget). Luckily, implementing cloud-based solutions can make it all much easier. For example, with an advanced CRM platform, you’re able to facilitate collaboration and essentially support all the efforts of your sales team. It’s not the only software that’s been popular—actually, sales agents tend to use six tools on average. Since dedicated software can truly make a difference for the sales team, you shouldn’t be hesitant to include at least a few tools in your forecast.
4. Research & monitoring
If you’ve been paying attention, you should already be aware that doing your research and keeping an eye on the market trends often accompany the sales budgeting process. Knowing your industry and your competitors can definitely do you more good than harm—and you should keep an eye on them at all times. You can constantly collect customer feedback, follow the news, and observe your competition to stay up-to-date. All of them are capable of influencing your sales forecasts, so the more thorough you are with your research, the better. Once again, you can invest in powerful tools meant for monitoring and competitors’ analysis to stay on top of things without doing much.
5. Customer satisfaction
While on the subject of customer feedback—as already mentioned, it can play an essential part in sales budget preparation as well. Attracting new customers is often difficult and expensive, which is why it’s important to keep the ones you already have satisfied. With the right set of tools and an experienced team, you can easily track all interactions with your prospects and customers, and figure out how you can meet (or even exceed) their expectations. This, however, might require some time and money from your business.
6. Effective time management
Time is extremely valuable—which means that you can’t afford to waste it. The time you spend on planning, balancing your budget and typing invoices could be put to better use, for example to finding new prospects. Your resources should be balanced, and you should keep an eye of your staff to know who, when, and for how long is handling each task. Managing everyone’s time well can definitely bring you more profit and less pressure on your sales budget in the long run.
Prepare & stick to your sales budget
Once you manage to prepare a sales budget, it’s time to stick to it. If you follow the above-mentioned tips and keep your goals in mind, you won’t be tempted to make purchases that aren’t exactly necessary for your company.
You can’t always win—sometimes you lose or waste money, but at least you’ll learn a lesson on what you shouldn’t invest in.
All in all: It might take some time, but preparing a sales budget carefully will be worth the effort in the end. Don’t forget that sales forecasts help keep businesses up and running, and form an important part of the companies’ general budget. Notice what works best and what might be worth the investment—have your bookkeeping, accounting, and customer details stored to compare monthly results and see where and how you can improve.
Remember that the right set of tools can make it much easier for your team. Try Livespace CRM to increase conversion at every stage of the sales process and plan your sales budgets more wisely.