SCALING YOUR BUSINESS
How To Hit Your 2020 Sales Targets With Absolute Certainty
Imagine you ’ re on a flight , 30 minutes after takeoff , when the captain comes on over the loudspeaker . He says , “ Folks , this is your captain speaking . We ’ re off and flying at what I hope is 500 miles per hour and about 35,000 feet off the ground . At least , that ’ s my best guess , since none of my instruments are working . We have fuel , but I don ’ t know exactly how much . I think we ’ ll be okay . We ’ re headed north-ish , and my intention is to get us to our destination , but without knowing how fast I ’ m flying and without the altitude or flight instruments working , I can ’ t confidently say we ’ re on track . However , we ’ re making great time up here , so sit back , relax , and enjoy your flight .”
As scary as this would be for you as a passenger , this is exactly how the majority of smaller MSPs run their business , specifically their sales and marketing departments ( if they even have them ). For starters , they have not defined clear goals for themselves about what they want and when they expect to get it . They ’ re headed “ north-ish ” with no final destination in mind and no reasonable time frame for getting there . Even if they do have goals , many don ’ t have accountability or tracking of milestones to determine if they are actually making progress . As Zig often quipped , they ’ re “ wandering generalities .” Is it any wonder they ’ re frustrated by how long and hard they have to work for such little pay ?
While I don ’ t have the space in this article to get into all the aspects of hitting a company ’ s goals , what I can provide you with is a blueprint for how to track your sales activities and pipeline so that you have credible , trustworthy metrics that allow you to accurately and confidently execute a marketing plan to hit any sales goal you ’ ve set for yourself — or to quickly determine you ’ ve overshot on your expectations and need to dial in the goals a bit . You ’ ll also be able to hire sales reps with confidence , knowing you can get them up and selling fast or quickly determine if they ’ re not going to make it and fire them fast to avoid paying them for months with no return .
Begin With The End In Mind
Covey was right when he made “ Begin with the end in mind ” one of the habits of highly effective people . One of the primary reasons people don ’ t hit their goals is simply because
they haven ’ t clarified them . Do you want to generate more sales or ( more specifically ) a 20 % increase in new MRR by June 2020 ? The latter is , of course , far more specific and focuses your efforts and your sales team ’ s efforts .
With a clear goal , you are able to work backward from that goal to create milestones and metrics that reveal if you ’ re on track or off track and ( more importantly ) determine where your progress may be in trouble . Without a clear goal and a plan to hit it , you ’ ve simply got a wish — and if you ’ re a leader in your organization , you don ’ t want to be wishy-washy , unfocused , or unclear about where your company is headed and how you are going to get there . That ’ s your job . None of your good employees will take you seriously or rally behind you if you fail to have clear goals and standards that you ruthlessly pursue . Only the duds will be happy you ’ re unfocused and sloppy because they ’ ll blend in and get away with mediocre performances . Only top performers crave a challenge and a fearless leader who will push them to get better , perform at a higher level , and win .
However , my experience has shown that many people lack confidence in their ability to set goals . They feel like they ’ re simply throwing a dart or making a wish . They don ’ t know if they ’ re setting their goals too big — which sets them up for failure — or too low so they hit them but are still unhappy with their progress . Here are some general guidelines .
Profitability comes first . If your business is not profitable and you start adding more clients , you ’ re throwing gasoline on a fire . A 10 % EBITA is the new breakeven , and that 10 % is not what you pay yourself . If you are a CEO , you must pay yourself a fair market salary first , then shoot for at least 10 % net profit . ( Go online to PayScale . com to see what the average salary and compensation are for a CEO of a small business in your city .) More mature MSPs may get to 20 % -plus EBITA due to efficiencies of scale , operational efficiency , and a productive sales and marketing team . Smaller MSPs may choose a lower EBITA because they are feeding the fire of marketing to acquire new clients , which is the most expensive and difficult aspect of running any IT services business ( or any business , for that matter ). The levers that move profitability are 1 ) pricing your services correctly , 2 ) operational efficiency , and 3 ) a labor efficiency ratio ( LER ), of at least 3 – 5 on your techs and 6 – 10 on