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A Sales Business Plan helps identify critical factors impacting sales team performance. Pipelines are leading indicators of sales success.



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Calculating Sales Quotas for Small Businesses

Sales Quotas are the Foundation of a Successful Sales Plan

Sales Quotas are calculated selling targets for sales individuals and teams.  When establishing new quotas, follow four simple steps:

1: Determine the performance period that will be used. 

  • Monthly quotas
  • Quarterly quotas
  • Annual quotas

Combinations are commonly used.  Performance periods may be broken down into daily or weekly targets.

2: Establish the lines of business for the assigned quota.

  • Some or all lines of business
  • Growth and/or retention for an installed base of business
  • Growth for new clients only
  • Growth and/or retention by a segment of the business or customer base

3: Select Key Performance Indicators (KPI's) to measure effective performance.

Limit the number of KPI's that will be measured to ensure the sales team is focused on priorities.

  • Revenue new/recurring
  • New customers
  • Customer retention
  • Customer attrition
  • Gross margin
  • Net profit
  • Accounts receivable
  • Quantity
  • Seats
  • Contracts
  • Renewal rates
  • Price increases

4: Build the quotas by sales representative and by territory, including:

  • The expected overall growth of the organization
  • Historical sales performance
  • Anticipated or known business losses
  • Competitive impact on sales
  • Industry trends

Sales representatives should be forecasting their individual territory sales performance with their management team, and managers with their executive team to build an overall sales strategy.