With the New Year comes new goals and planning. This past month I have been focusing on my sales revenue projections for 2017. As a bookkeeping firm our services are broken down between flat fee (write-up work/QBO/remote bookkeeping), on-site bookkeeping services, set up and implementation, and training. Because we provide different kinds of services, it doesn’t make good financial sense to provide them at all the same rate — different levels of services must be provided at different rates. So how do I budget the sales for each level? Most people use flat fee projections to plan their sales each year. Well, I take a different approach to planning my sales: I base my projections on people and sales history. Here is an overview of the three different approaches:
Here are three strategies in planning sales projections for revenues:
1. Planning sales based on sales history
Analyze a three year sales history to see:
- How many new clients you brought on in a year (what type of clients are these? ie training, flat fee, hourly)
- How many clients you lost in a year
- The different types of clients you service (i.e. training, flat fee, on-site)
- What industries are you servicing
2. Planning revenues based on people
For this, use the old equation: Hours per billable work × billable hours × weeks per year.
For example, there are 40 hours in a work week, but not all hours can be billable. Generally in my office my team is expected to bill at least 30 hours a week. They get up to 4 weeks off each year (e.g. sick, vacation, holiday time, education).
Hours × Rate per hour × Weeks per year
30 × $75.00 = $2,250 × 48 = $108,000
My experience has been that a new person not used to tracking time and billable hours is about 25 hours productive in their first year.
3. Planning based on flat fee accounts
Think about what you want your yearly goal and divide it by average client size to determine the number of new clients you can attain. For more information see Seth David’s blog on http://blog.bqe.com/2017/01/04/planning-2017-time-to-set-your-goals-for-the-year/
No matter what your revenue strategy plan is, make sure it is realistic and attainable. If you are not delivering, you may have one or more areas out of whack — you may be estimating too high, or there could be an issue with your selling strategy. Last but not least, take a look to see if you have the right people in the right roles so they are achieving their revenue goals.