Components of an Effective Sales Plan

Based on K&A's 25+ years of experience of successfully developing, and executing, sales and marketing plans, below are the components that K&A recommends be in an effective sales plan:    

  • Approved List of Sales Terms and Definitions that are specific to each company. SeeCommon Sales Terms for an example of this list. 
  • Key Management Goals and Performance Measurements that include the major strategic, operational goals, or ownership goals, that apply for the targeted planning time frame. K&A recommends using 3 -5 years as the targeted planning time frame.
  • Summary Financial Plan that includes the summary of the planned sales, gross margin, operating expenses, other expenses, and net margin for each year in the planning time frame. K&A recommends a planning time frame of 5 years backwards, and 5 years forward. We also recommend that sales be planned by major category of customers, and/or by major target markets. This plan should also include the development of key management performance metrics for each major business unit or each major function. 
  • Detail Financial Plan that includes the detailed version of the planned sales, gross margin, operating expenses, other expenses, and net margin for the next fiscal year. K&A recommends developing a detailed financial plan for the next fiscal year.
  • Revenue Plan that includes the shipping plan for the types and size of sales orders that are required to meet the Financial Plan. K&A recommends that planned sales be broken down into these categories: 1) new sales to new customers, 2) add-on sales to new customers, 3) existing sales to existing customers, and 4) new sales to existing customers. It also includes the development of the required sales goals and quotas. 
  • Sales Booking Plan that includes the order receipt plan for the types of sizes of sales orders that are required to meet the Financial Plan.
  • Sales Quota Plans that include the targeted sales plan for each planned sales, and, if appropriate, customer service, resource.  
  • Sales Resource Plan that includes the targeted type and number of sales and marketing resources that will be required to meet the Sales Plan and the Marketing Plan. For an overview of common sales roles see Common Sales Roles and Common Sales Management Roles.
  • Sales Capital Expenditure Plan that includes the new capital purchases that are required to meet the Sales Plan and Marketing Plan.
  • Sales Compensation Plans that include the changes to all applicable compensation plans (management and sales staff) that are required to meet the Key Management Objectives
  • Sales Expense Budget that includes all planned sales expenses including payroll expenses (fixed and variable), travel expenses, staff development expenses, and entertainment expenses.