Setting Sales Goals
Sales Goals Are Different Than Other Business Goals
For $1M–$10M ARR founders whose team's numbers are a wish, not a plan. Here's how I set sales goals that actually get hit, and how to make every rep on your team do the same.
Miss one and you don't have a goal. You have a hope. All five have to be in place for every rep on your team.
A vague goal is a broken goal. "Grow revenue" isn't a target, it's a direction. Your rep needs a precise, defined number. $20,000 in commission this month. 8 new logos this quarter. $250,000 in new bookings by year end. When the target is exact, the rep can build a plan against it. When it's fuzzy, they flail and hope they land somewhere good. As the leader, your first job is to make sure every goal on the team is specific enough that there's no argument about whether it was hit.
This one sounds soft. It isn't. If a rep doesn't believe, all the way down, that the number is reachable, they won't do the work that reaches it. They'll quietly write it off in February and coast. A goal has to be a stretch and it has to be credible. Part of your job is calibration. Set it too low and you leave money on the table. Set it so high the rep gives up before they start, and you've killed the goal before the quarter even began.
A goal that lives in a spreadsheet nobody opens isn't ingrained. It's filed. People who write their goals down are far more likely to hit them, and the reps who review theirs every day are a different animal than the ones who look once a quarter. Have your team write the number where they'll see it daily and say it out loud. It feels silly for about a week. Then it's just how they operate, and the number starts driving their calendar instead of the other way around.
This is where most sales goals fall apart. If a rep wants $20,000 in commission this month, that number is worthless until it's broken into the activity that produces it. How many calls from the list make a qualified prospect? How many qualified prospects become an appointment or a demo? How many of those turn into a real opportunity? How many opportunities, at what average value, add up to the commission? Every stage has a conversion rate, and if you don't know yours, you're not managing a pipeline, you're watching one. If a rep measures anything other than dollars, they have to know exactly how that metric turns into money in their pocket.
Sales goals live in the future, not the present. If your average sales cycle is 90 days, it's already too late to set a goal for this month. The deals that close this month were started a quarter ago. That's the piece founders miss when they set a number in January and expect it in February. As the leader, you have to set goals against your real cycle length, so the activity your reps do today is aimed at the month it will actually land in.
Sales goals are different than other business goals, and treating them the same is why so many teams miss. You can set an operations goal or a hiring goal as a flat target and steer toward it. A sales goal doesn't work that way. It has to be reverse-engineered from the dollar figure you want all the way back to the number of calls a rep makes on a Tuesday. Skip that math and the goal is decoration. It looks like a plan, but there's nothing underneath it, and the rep has no way to know on any given day whether they're winning or losing.
The fix is to do the math once, then inspect it on a schedule. If you want the mechanics of turning a target into a quota your reps can actually carry, start with How to Set Quota for a Small Sales Team →. And once the goals are set, the forecast built on top of them is only as good as the conversion data underneath. For that, read Sales Forecasting for Small Business →. Set the goal right, and the forecast starts telling the truth.
The words can look identical on a slide. The difference is whether there is math underneath.
This is the exercise I run with every rep. Start at the dollar figure and work back to the activity. The order matters.
Begin at the end. Pick the exact number the rep is going after this period. Say it's $20,000 in commission this month. If the goal is measured in something other than dollars, new logos, expansion revenue, whatever it is, translate it into commission first. If a rep can't tell you how their goal turns into money in their pocket, the goal isn't finished yet.
Work backward from the commission to the deals that produce it. How many opportunities do you need to close, and at what average value, to hit $20,000 in commission? Now factor in your win rate. If you close one in four qualified opportunities, you need four times the opportunities in the pipeline to land the number. This is where a soft goal becomes a hard pipeline requirement.
Keep going back up the funnel. How many appointments or demos does it take to create one real opportunity? If it takes three good discovery calls to produce one opportunity, and you know how many opportunities you need, you now know exactly how many appointments have to happen this period. The math compounds at every stage.
Finish at the top of the funnel, where the rep actually lives. How many calls or touches from the list produce one qualified prospect, and how many qualified prospects produce one appointment? Divide it across the working days and you've turned a $20,000 goal into a number of calls the rep makes today. That's a goal a person can actually execute. Everything above it was just arithmetic.
I'm Louie Bernstein. I have 50 years in business experience, including 22 as a bootstrapped founder. My Fractional Sales Leadership business has been helping founders since 2017.
I've set sales goals for my own teams and for the founders I work with for decades, and the process is always the same. Start at the dollar figure, work back to the daily activity, write it down, and inspect it every month. When I come into a $1M–$10M ARR company, this is one of the first things I install, because a team without real goals is a team that's guessing.
Because a sales goal has to be reverse-engineered, and most business goals don't. You can set a hiring or product goal as a flat target and manage toward it. A sales goal only works when you start at the dollar figure and work all the way back to how many calls a rep makes in a day. If there's no activity math underneath the number, it's a wish, and wishes don't close deals.
Set them annually, then break them down to quarterly, monthly, weekly, and daily. Once you've done the math one time, it's the same formula at every level. The annual number is the destination. The daily activity number is what the rep actually controls, and it's the one that gets them there.
Use your top performer's numbers as the starting point. If a rep is brand new and you have no data on them, borrow the conversion rates from your best salesperson and adjust as the rep's real numbers come in. A rough model built on your best rep beats no model at all, and you refine it every month.
It changes your timing. If your average deal takes 90 days to close, the revenue you want this month depends on activity that happened three months ago. So you can't set a number for the current month and expect the pipeline to produce it on demand. You set goals ahead of the cycle, so today's calls are aimed at the month they'll actually close in.
Monthly at least, even if the goals themselves are quarterly or annual. The whole point of the math is that it lets you catch a rep who's off pace early. If you only look at quarter's end, the miss is already locked in. A monthly review turns the goal into a live instrument instead of a scorecard you read after the game is over.
In 30 minutes I'll show you how to reverse-engineer your revenue target into activity numbers every rep can carry, and how to review them so nobody's surprised at the end of the quarter.