Make a Sales Plan

Context

By now, you have sketched your business model and built and refined your prototype. Now, you need execute yo
with a series of steps to achieving that particular goal. For example, if your goal for the next year is to sell 6,000 t-
achieve it — how you will procure the raw material, what will it cost, price of the t-shirts, and your sales target fo

Business planning begins with Sales Planning. A sales plan consists of a sales forecast and a plan to achieve the fo
sell in a given period. Sales planning is divided into two parts:
 

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1. Forecast your sales for the next one year. This is an activity, and you have 50 minutes to complete it. In this

2. Plan the number of leads you will need to meet your sales target. This will be an assignment, and you will ha
Funnel.

Instructions for Part 1: Sales Forecasting (Activity)

1 Regroup into your venture teams of five. You have 50 minutes to complete this activity.
2 Refer to the second tab, Sales Forecasting. Read up the different methods of sales forecasting from row 7
3 Start filling up the orange colored cells. Do not type over the gray colored cells; these are formula-driven.
4 Fill up row 6 with the year for which your are forecasting. You can refer to tab 3, Sales Forecasting Examp

Use your preferred method of sales forecasting and fill up rows 7, 8, and 9 with the revenue targets for ea
more than one kind of product or service. For example, if you have a t-shirt business, round neck t-shirts c
5 also differentiate between your products or services based on the customers. For example, if you had B2B
perhaps different print from your B2C customers. The t-shirts you will be selling to your B2B customers co
you have more than three kinds of products or services, copy row number 9 and paste it before row 10 w

After you forecast the annual sales for each of your products or services, break the annual forecast into m
split up your estimates between cash sales and invoiced sales. Cash Sales are where you collect cash paym
pay for the coffee and are then served the coffee. The other example is an online store where customers
6 where you send an invoice to customers after a sale and wait for them to make the payment. Typically co
(a travel agency, an equipment vendor, etc.) send their goods or services to companies and collect money
Put your estimates for payments to be received in cash sales and invoiced sales for each month and for ea
lesson. While splitting the total forecast into months, account for the fact that depending on your busines

7 Fill up rows 36 and 37 with the total cash sales and total invoiced sales for your business for each month.

Next, you need to split the month-on-month sales forecast for each of product and service amongst your
you may want to split it between two salespeople with a target of $20,000 each. Or, you may split it as $1
8 on the geographies they will be handling. If some geographies are more likely to buy some product or serv
geography. Enter your monthly estimate of the total sales each of your sales team members are expected
 

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months.
 

Advanced Course in Entrepreneurship

Make sure that the month-on-month sales forecast adds up to the total forecast you have placed at the b
9
Sales Plan - Part 2.

Instructions for Part 2: Customer Acquisition Funnel (Assignment)

You have completed your sales forecasting and now you need to fill up your customer acquisition funnel.
1
you had forecasted. You have 60 minutes to complete this assignment.

2 Start with arriving at your total target market. A target market consists of customers with similar characte

Refer to tab 4, Customer Acquisition Funnel. You need to create a month-on-month estimate of your lead
with the number of paying customers (rows 31 and 32) you need to fulfill your sales target for the year. Y
3
determine is how many paying customers you need to meet that forecast for the month. For example, if y
$1,000, then you need 100 paying customers.

Next, estimate the number of prospects you need to find that many number of paying customers (rows 2
4 with to get one customer for your product or service. For example, let’s say you need to follow-up 10 lead
to follow-up 10 multiplied by 100 = 1,000 prospects.

Now, estimate the number of leads (rows 27 and 28) you need for 100 customers and 1,000 prospects. Le
5
you need to send out 50 multiplied by 1,000 = 5,000 emails.

6 Repeat this exercise for every product or service.

Now, you need execute your business model, and for that, you need a plan — your business plan. A business plan is a goal
next year is to sell 6,000 t-shirts and make $10,000 in profit, the business plan will describe the steps on how you "plan" to
ts, and your sales target for each month.

nd a plan to achieve the forecast. A sales forecast is a projection of the number of units of products or service you want to

utes to complete it. In this activity, you need to fill up tab 2 of this spreadsheet - Sales Forecasting.

ssignment, and you will have 60 minutes to complete it. In this assignment, you will fill up tab 4, Customer Acquisition

activity.
ales forecasting from row 75 onward and choose a method that works best for your business.
these are formula-driven.
3, Sales Forecasting Example, to see what a filled up sales forecast looks like.

h the revenue targets for each of your product or service. Now, irrespective of your business, you are most likely to make
iness, round neck t-shirts could be one kind of product, whereas collared t-shirts could be another type of product. You can
or example, if you had B2B or corporate customers, the t-shirts you will be selling them will have different prices and
g to your B2B customers could be one kind of product and the t-shirts for your B2C customers could be another kind. In case
d paste it before row 10 with your total sales forecast for the year.

the annual forecast into months. Fill up the month-on-month sales forecast for each product or service. Here, you need to
here you collect cash payment from the customer at the time of the sale. One example is a coffee shop where customers
ne store where customers pay upfront using credit card or Internet banking for the items they order. Invoiced Sales are
the payment. Typically companies wait for 30-45 days for the money to come in. This is typical in a B2B sale where suppliers
mpanies and collect money later.
for each month and for each product or service. You will learn more about cash payments and billed payments later in this
depending on your business, some months are likely to have more sales than the others.

business for each month.

and service amongst your salespeople. So, if your target sales for product or service 1 for the month of January is $40,000,
h. Or, you may split it as $10,000 and $30,000. How you split the monthly targets for each of your salespeople may depend
o buy some product or service than the others, then set a higher target for that product for the salesperson handling that
am members are expected to sell. Based on review of each month's actual performance by the sales team, adjust the future
 t you have placed at the beginning of the sheet. Retain this filled up spreadsheet; you will use it in the assignment Make a

stomer acquisition funnel. A customer acquisition funnel is a plan for how you want to go about achieving or exceeding what

omers with similar characteristics such as age, location, income, or lifestyle and is most likely to buy your product or service.

month estimate of your leads, prospects, and customers for every product or service. Refer to rows 27 to 32. You will begin
sales target for the year. You have already created your sales target for the year in your previous activity. What you need to
he month. For example, if you expect sales of $100,000 in the month of January, and on an average each customer pays

paying customers (rows 29 and 30). You need to come up with an estimate for how many prospects you need to follow-up
u need to follow-up 10 leads to get one customer who will buy your product or service. So, to get 100 customers, you need

ers and 1,000 prospects. Let’s say for every 50 emails you send out, 1 person expresses interest. So, to get 1,000 prospects,
 Part 1: Sales Forecasting - Blank Template

Sales Forecast for the Year 2020

Total Annual Sales Target for
30,000,
Product/Service 1
Total Annual Sales Target for
_
Product/Service 2
Total Annual Sales Target for
_
Product/Service 3
Total Sales Target for the Year 300000

Month-on-Mon
 

Advanced Course in Entrepreneurship

Product/
Month Jan Feb Mar Apr
Cash Sales 1800000 2400000 2400000 2400000
Invoiced Sales
Total Sales 1800000 2400000 2400000 2400000
Yearly Total for
Product/Service 1 30000000

Product/
Month Jan Feb Mar Apr
Cash Sales
Invoiced Sales
Total Sales 0 0 0 0
Yearly Total for
0
Product/Service 2

Product/
Month Jan Feb Mar Apr
Cash Sales
Invoiced Sales
Total Sales 0 0 0 0
Yearly Total for
0
Product/Service 3

TOTALS FOR ALL PRO

Month Jan Feb Mar Apr
Cash Sales 1800000 2400000 2400000 2400000
Invoiced Sales 0 0 0 0
 Total Sales 1800000 2400000 2400000 2400000

TOTAL 30000000

Sales Plan by
Sales Pe
Month Jan Feb Mar Apr
Product/Service 1 600000 800000 800000 800000
Product/Service 2
Product/Service 3
Total Monthly
600000 800000 800000 800000
Sales Target
Total Annual Sales
10,000,000
Target

Sales Pe
Month Jan Feb Mar Apr
Product/Service 1 600000 800000 800000 800000
Product/Service 2
Product/Service 3
Total Monthly
Sales Target 600000 800000 800000 800000

Total Annual Sales 10100000

Target

Sales Pe
Month Jan Feb Mar Apr
Product/Service 1 600000 800000 800000 800000
Product/Service 2
Product/Service 3
Total Monthly
600000 800000 800000 800000
Sales Target

Total Annual Sales

9900000
Target

TOTALS FOR ALL

Month Jan Feb Mar Apr
Sales Person-1 600000 800000 800000 800000
Sales Person-2 600000 800000 800000 800000
Sales Person-3 600000 800000 800000 800000
Total Sales 1800000 2400000 2400000 2400000
Total Annual Sales
30000000
Target
Sales Forecasting Methods
1. For existing businesses, forecasting is usually based on the previous year’s sale. For new businesses, forecastin
company’s ability to spend – how many units of product or service can it afford to produce in a year – can also a

2. When doing your market research you can use either a top-down or a bottom-up approach. Imagine your bus
total addressable market and then estimate your share of that market. Total addressable market or TAM is the t
business, you find out that a total of 100,000 people in your geography buy t-shirts. You need to decide what pe
addressable market in the first year, then you would want to sell to 5,000 customers in one year.

3. You can also use the bottom-up approach for your forecasting. Continuing with the example of the t-shirt bus
approach for your sales forecasting, you need to find out how many customers visit the shop for a sale of, say, 1
competitors. But keep in mind that the sales of an established business will be higher than that of a new one.

4. Your capacity and ambition can also affect your sales forecast. Continuing with the t-shirt example, say based
infrastructure and cash needed to make 500 t-shirts? Do you want to start with a sales size as large as 500 t-shir

5. Lead-driven forecasting – Based on your market research or based on data from the previous year, analyze ea
lead sources or data from previous years.

6. Length of sales cycle forecasting – This strategy uses data on how long a lead takes to convert to a sale. The le
on how long a sales cycle can take for your product or service. Going forward over the years, you could combine
takes 4 months and your salesperson has been working a potential client for 3 months. In this case, your forecas

7. Intuitive forecasting – This strategy is based on trusting that your salespeople are the best people for accurate
when. The pitfalls of this method are obvious; there is a risk of forecasting too much or too little. But it can be a

8. Test-market analysis forecasting – This strategy is great for new companies rolling out their product or service
analyze the response. Using the result of your analysis, you can make a near-accurate forecast. The two things t
Second, a limited launch can be expensive – your costs may be more than your revenues. If your company is con

9. Historical forecasting – In this strategy, you use your past sales data to forecast the sales for the next year con
you will sell $15,750 in November next year. The pitfall of this method is that it does not consider market fluctua

10. Each of these forecasting strategies has its own pros and cons. The best approach is to take the best of all th
However, it is important to revisit your forecast every month and see how much your salespeople are achieving
low, they would be achieving the goals effortlessly. In both the cases, you need to revisit your forecast.
Resources:
1. https://blog.close.io/sales-forecasting-strategies
2. https://www.entrepreneur.com/article/77674
3. https://blog.hubspot.com/sales/sales-forecasting
4. https://www.salesforce.com/au/blog/2017/11/9-sales-forecasting-tips-for-small-business.html
 2020

30,000,000

30000000

Month-on-Month Sales Target

Product/Service 1
May Jun Jul Aug Sep Oct
2500000 2600000 2600000 2700000 2700000 2700000

2500000 2600000 2600000 2700000 2700000 2700000

Product/Service 2
May Jun Jul Aug Sep Oct

0 0 0 0 0 0

Product/Service 3
May Jun Jul Aug Sep Oct

0 0 0 0 0 0

TOTALS FOR ALL PRODUCTS & SERVICES

May Jun Jul Aug Sep Oct
2500000 2600000 2600000 2700000 2700000 2700000
0 0 0 0 0 0
 2500000 2600000 2600000 2700000 2700000 2700000

Sales Plan by Sales Person

Sales Person 1
May Jun Jul Aug Sep Oct
800000 900000 800000 900000 900000 900000

800000 900000 800000 900000 900000 900000

Sales Person 2
May Jun Jul Aug Sep Oct
800000 900000 900000 900000 900000 900000

800000 900000 900000 900000 900000 900000

Sales Person 3
May Jun Jul Aug Sep Oct
900000 800000 900000 900000 900000 900000

900000 800000 900000 900000 900000 900000

TOTALS FOR ALL SALES PERSONS

May Jun Jul Aug Sep Oct
800000 900000 800000 900000 900000 900000
800000 900000 900000 900000 900000 900000
900000 800000 900000 900000 900000 900000
2500000 2600000 2600000 2700000 2700000 2700000
. For new businesses, forecasting is based on market research, your competitors, your company’s capacity, and your ambition. Your
o produce in a year – can also affect your sales forecast.

up approach. Imagine your business is making hand-printed t-shirts for teenagers and adults. In the top-down approach, you determine th
ressable market or TAM is the total number of people in a geography who can use your product or service. Now, in case of the t-shirt
ts. You need to decide what percentage of this total addressable market you want to capture. Say, you want to sell to 5% of the total
ers in one year.

h the example of the t-shirt business, let's say you have identified a popular clothing store for selling your t-shirts. Now, to use a bottom-up
sit the shop for a sale of, say, 100 t-shirts in a month. As a part of market research, try to find out the sales numbers of your nearest
gher than that of a new one.

the t-shirt example, say based on your market research, you learn that you can achieve a monthly sale of 500 t-shirts. But do you have th
sales size as large as 500 t-shirts? Or do you want to test the waters by starting smaller with, say, 200 t-shirts?

m the previous year, analyze each lead and assign a value to that source. This forecasting is ideal for companies who have clear data on the

akes to convert to a sale. The length of a sales cycle depends on your industry. For the first year of your business, you could do some resea
r the years, you could combine your research data with past sales data to determine your sales cycle. Now imagine your sales cycle typica
onths. In this case, your forecast might suggest that he or she has a 75% chance of closing the deal in the fourth month.

are the best people for accurately forecasting their own sales. Start by asking each one how confident he/she is about closing the sale and
uch or too little. But it can be a good option for companies who are just starting out and don’t have their own past data to fall back on.

ing out their product or service for the first time in the market. As the name suggests, you do a limited launch of your product or service a
urate forecast. The two things to remember for this strategy are: First, what happens in one geographical area is different from another.
evenues. If your company is considering a soft launch, a test-market forecasting may be useful.

t the sales for the next year considering a stable growth rate. For example, if you sold $15,000 in November last year, with a 5% growth ra
oes not consider market fluctuations.

oach is to take the best of all these strategies for your forecasting. It is important to keep in mind that there is no exact science to forecasti
your salespeople are achieving. If the goals are too high, most of your salespeople would be struggling to achieve them. If your target is to
o revisit your forecast.

all-business.html
Nov Dec
2500000 2700000

2500000 2700000

Nov Dec

0 0

Nov Dec

0 0

Nov Dec
2500000 2700000
0 0
 2500000 2700000

Nov Dec
900000 900000

900000 900000

Nov Dec
900000 900000

900000 900000

Nov Dec
700000 900000

700000 900000

Nov Dec
900000 900000
900000 900000
700000 900000
2500000 2700000
city, and your ambition. Your

p-down approach, you determine the

vice. Now, in case of the t-shirt
want to sell to 5% of the total

ur t-shirts. Now, to use a bottom-up

ales numbers of your nearest

e of 500 t-shirts. But do you have the

t-shirts?

mpanies who have clear data on their

r business, you could do some research

Now imagine your sales cycle typically
he fourth month.

he/she is about closing the sale and by

ir own past data to fall back on.

launch of your product or service and

al area is different from another.

mber last year, with a 5% growth rate,

here is no exact science to forecasting.

to achieve them. If your target is too
 Part 1: Sales Forecasting - Example

Sales Forecast for which Year 2019

Total Annual Sales Target for
363600
Product/Service 1
Total Annual Sales Target for
Product/Service 2
Total Annual Sales Target for
Product/Service 3
Total Sales Target for the Year 363600

Month-on-Mon
 

Advanced Course in Entrepreneurship

Product/
Month Jan Feb Mar Apr
Cash Sales 240000 240000 240000 240000
Invoiced Sales
Total Sales 240000 240000 240000 240000
Yearly Total for
Product/Service 1 3030000

Product/
Month Jan Feb Mar Apr
Cash Sales 240000 240000 240000 240000
Invoiced Sales 0 0 0 0
Total Sales 240000 240000 240000 240000
Yearly Total for
3030000
Product/Service 2

Product/
Month Jan Feb Mar Apr
Cash Sales 240000 240000 240000 240000
Invoiced Sales
Total Sales 240000 240000 240000 240000
Yearly Total for
3030000
Product/Service 3

TOTALS FOR ALL PRO

Month Jan Feb Mar Apr
Cash Sales 720000 720000 720000 720000
Invoiced Sales 0 0 0 0
 Total Sales 720000 720000 720000 720000

TOTAL 9090000

Sales Plan by
Sales Person 1 (Sells only CASH SALES and
Month Jan Feb Mar Apr
Product/Service 1 8000 8000 8000 8000
Product/Service 2
Product/Service 3
Total Monthly
8000 8000 8000 8000
Sales Target
Total Annual Sales
101000
Target

Sales Person 2 (Sells only INVOICED SALES and

Month Jan Feb Mar Apr
Product/Service 1 8000 8000 8000 8000
Product/Service 2 0 0 0 0
Product/Service 3 0 0 0 0
Total Monthly
8000 8000 8000 8000
Sales Target
Total Annual Sales
101000
Target

Sales Person 3 (Sells bot CASH and INVOICED SAL

Month Jan Feb Mar Apr
Product/Service 1 8000 8000 8000 8000
Product/Service 2
Product/Service 3
Total Monthly
8000 8000 8000 8000
Sales Target

Total Annual Sales 101000

Target

TOTALS FOR ALL

Month Jan Feb Mar Apr
Sales Person-1 8000 8000 8000 8000
Sales Person-2 8000 8000 8000 8000
Sales Person-3 8000 8000 8000 8000
Total Sales 24000 24000 24000 24000
Total Annual Sales
303000
Target
 2019

36360000

36360000

Month-on-Month Sales Target

Product/Service 1
May Jun Jul Aug Sep Oct
240000 240000 240000 270000 270000 270000

240000 240000 240000 270000 270000 270000

Product/Service 2
May Jun Jul Aug Sep Oct
240000 240000 240000 270000 270000 270000
0 0 0 0 0 0
240000 240000 240000 270000 270000 270000

Product/Service 3
May Jun Jul Aug Sep Oct
240000 240000 240000 270000 270000 270000

240000 240000 240000 270000 270000 270000

TOTALS FOR ALL PRODUCTS & SERVICES

May Jun Jul Aug Sep Oct
720000 720000 720000 810000 810000 810000
0 0 0 0 0 0
 720000 720000 720000 810000 810000 810000

Sales Plan by Sales Person

n 1 (Sells only CASH SALES and is responsible for 50% of total cash sales)
May Jun Jul Aug Sep Oct
8000 8000 8000 9000 9000 9000

8000 8000 8000 9000 9000 9000

Sells only INVOICED SALES and is responsible for 50% of total invoiced sales)
May Jun Jul Aug Sep Oct
8000 8000 8000 9000 9000 9000
0 0 0 0 0 0
0 0 0 0 0 0
8000 8000 8000 9000 9000 9000

ls bot CASH and INVOICED SALES and is responsible for 50% of both such sales)
May Jun Jul Aug Sep Oct
8000 8000 8000 9000 9000 9000

8000 8000 8000 9000 9000 9000

TOTALS FOR ALL SALES PERSONS

May Jun Jul Aug Sep Oct
8000 8000 8000 9000 9000 9000
8000 8000 8000 9000 9000 9000
8000 8000 8000 9000 9000 9000
24000 24000 24000 27000 27000 27000
Nov Dec
270000 270000

270000 270000

Nov Dec
270000 270000
0 0
270000 270000

Nov Dec
270000 270000

270000 270000

Nov Dec
810000 810000
0 0
 810000 810000

Nov Dec
9000 9000

9000 9000

Nov Dec
9000 9000
0 0
0 0
9000 9000

Nov Dec
9000 9000

9000 9000

Nov Dec
9000 9000
9000 9000
9000 9000
27000 27000
 10,isthezofnc
TARGEMK
10,wercontadshi
LEADSOportunities/Pc
customer
0becampying1
CUSTOMER

Part 2 - Fill up the Customer Acquisition Funnel

 

Advanced Course in Entrepreneurship

Plan to Ge
Total Target Market

Jan Feb Mar

Leads to follow 1000 1000 1000

Prospects 750 750 750

Customers 500 500 600

Plan to Ge
Total Target Market

Jan Feb Mar

Leads to follow

Prospects

Customers
 Customers

Plan to Ge
Total Target Market

Jan Feb Mar

Leads to follow

Prospects

Customers

Tips to fill up the Customer Acquisition Funnel

1 Losing some prospects at some stage of the funnel does not mean that you have lost them forever; you
2 This is a crucial step in your venture creation; hence, do analyze your target customer very well. Make s
3 Make sure you have enough prospects/leads at each stage of the funnel so that enough remain at the n

4 At the product/service front, once the prospective customer signs up with you, you must ensure that y

5 About 80% of your customers will come from your target segment or niche, but some may be from out

6 Make sure you follow up with your customers and take feedback to make further enhancements to you

If your conversion rate is high, then what you should concentrate on is to increase the number of peop
7
her early days, Nancy focuses on the conversion rate, i.e., the total number of customers at each stage

8 The last stage in the funnel, "customers,” is very crucial as this is the stage where you get paid. So, ensu
 Plan to Generate Leads and Follow-up Prospects and Customers - Product/Service 1

Apr May Jun Jul Aug Sep

1000 1000 1000 1000 1000 1000

750 750 750 750 750 750

600 600 700 700 700 700

Plan to Generate Leads and Follow-up Prospects and Customers - Product/Service 2

Apr May Jun Jul Aug Sep

 Plan to Generate Leads and Follow-up Prospects and Customers - Product/Service 3

Apr May Jun Jul Aug Sep

n that you have lost them forever; you can return to them later and try to convert them again.
our target customer very well. Make sure that you are clear about your goals.
funnel so that enough remain at the next stage.

up with you, you must ensure that your customer is able to connect with the actual product and the promises made in the Unique Value

t or niche, but some may be from outside the target segment also, so keep your ears and eyes open.

to make further enhancements to your product or service. This delights the customer, and there are chances that you get more customer

on is to increase the number of people entering that stage of your funnel. So, you can track or measure your target segment. In the Nancy
al number of customers at each stage of the funnel.

he stage where you get paid. So, ensure you have enough numbers at this stage of the funnel, which will ultimately generate the revenue
Service 1

Oct Nov Dec

1000 1000 1000

750 750 750

700 700 700

Service 2

Oct Nov Dec

Service 3

Oct Nov Dec

omises made in the Unique Value Proposition block of your business model are met.

ances that you get more customer referrals.

your target segment. In the Nancy's Day Care example mentioned in the video, Customer Acquisition, during

ll ultimately generate the revenue for your business.