The 5 Steps of Planning a Sales Budget: A Beginner’s Guide

 

I‍ntroduction

Sales is integral to almost every business. Whether you are trying to sell your product directly to customers, or working with a wholesaler, sales is an essential part of keeping your business running. 

A good sales strategy allows you to focus your marketing efforts and achieve the best results for your company. Within this blog post, we will get you up to speed on planning a sales budget that works for your company – no matter what stage you are at in growing your business. 

Read on for advice on how to create a sales plan that reflects your company’s needs and helps you meet those needs in the future.

What is a sales budget?

A sales budget is a document that outlines how much you plan to spend on sales and marketing. When you create a sales budget, you are deciding how much money you want to invest in growing your business. 

The overall sales budget includes any money you spend on marketing, sales staff and events, as well as any travel expenses associated with attending trade shows or visiting customers. 

 

A typical sales budget includes the following information: 

• How much money you plan to spend on marketing each month. 
• How much money you plan to spend on travel expenses, such as hotels and airfare, for visiting customers. 
• How many salespeople you plan to hire and how much you expect to pay them each month. 
• How much money you plan to spend on marketing events and trade shows, such as creating booths, hiring models and printing giveaways.

Why is creating a sales budget important?

A sales budget allows you to streamline your marketing efforts and ensure that you are spending your money wisely. When you create a sales budget, you are taking stock of your current sales numbers. This allows you to see where you can improve, both internally and externally. 

Creating a sales budget allows you to invest in the right marketing strategies for your company. This will allow you to gain more customers and increase revenue. A sales budget can help you avoid making rash marketing decisions that can be detrimental to your company.

Step 1: Define your sales objectives

Your sales objectives outline why you want to create a sales budget. In other words, what are you hoping to achieve with a sales budget? Knowing why you want to create a sales budget will help you focus your efforts and create a sales budget that meets your needs. 

Here are a few examples of sales objectives: 

• Increase revenue by 10% in the next year. 
• Increase product sales by 25% in three months. 
• Increase sales to a specific industry by 20% over the next year. 

Keep in mind that your sales objectives should be realistic. If you set lofty goals that are unlikely to be met, you will end up feeling disappointed and frustrated. This can negatively impact your company culture and morale.

Step 2: Determine your marketing strategy

Marketing is an essential component of successfully selling your products. Before you can create a sales budget, you must understand your marketing strategy. Your marketing strategy is where you plan to sell your product, who will buy it and what makes your product stand out from the rest. 

Here are a few examples of marketing strategies: 

• Selling your product online – this works best for B2B companies that sell software or other digital products. 
• Selling your product through a wholesaler – this works best for B2C companies that have a high-dollar product and want to focus on one industry. 
• Creating an online ad campaign – this works best for B2C companies with a low-dollar product that want to target a wide audience.

Step 3: Identify your current customers – and why they buy from you

Before you can create a sales budget, you must first understand who you are selling to. This allows you to create a sales budget that focuses on your strengths — not your weaknesses. 

Identify the industries and demographic that you currently sell to. Then, find out why they buy from you. 

• Do they prefer to buy online or in-store? 
• What are their average incomes? 
• What are their interests and hobbies? 

Once you have this information, you can focus your sales budget accordingly. This will allow you to spend the right amount of money on marketing and events that will appeal to your current customers. 

• Do you want to focus on selling online or in-store? 
• Which industries do you want to focus on? 
• What are your strengths?

Step 4: Estimate how many potential customers you have and how much it will cost to reach them

Before you can create a sales budget, you must know how many customers you want to reach. This allows you to create a budget that accounts for reaching the right number of customers. Consider:

• How many potential customers do you have? 
• What is the cost per customer? 

Once you know the number of customers you want to reach and how much it will cost to reach them, you can create a sales budget. Consider:

• How much money do you have to spend on marketing? 
• What marketing strategies will you use to reach your customers? 
• How many salespeople do you plan to hire? 
• How much money do you plan to spend on events?

Step 5 Should you pursue an in-house sales team, ad campaign or both?

By the time you reach step five, you will have a detailed sales budget in hand. Now, you must decide if you want to invest in an in-house sales team, an ad campaign or both. 

• Will hiring an in-house sales team be cost-effective? 
• What are your campaign goals? 

When you have an idea of what you want to accomplish with your ad campaign, you can create a sales budget for the campaign. You can use the budget to determine how much you will need to spend on the ad campaign. 

• How much does it cost to hire an in-house sales team? 
• How much does it cost to run an ad campaign? 

By now, you should have a clear understanding of what goes into creating a sales budget. Creating a sales budget is an essential part of growing your business. 

A sales budget allows you to strategically invest in marketing and advertising so that you can reach more customers and sell more products.