7 Tips to Create Successful Business and Sales Plans
Business and sales plans are essential to a company’s financial and operational health.
May 15, 2023
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MSPs should build a business plan as soon as possible and have the system in place to nurture it throughout the life of the company. The plan should be based on the company’s current goals and objectives. Those could include increasing profitability and revenue, defining upsell processes and lead-gen strategies, and selling more to existing customers or targeting new customers.
“It starts with a plan and measurements and targets. You have to know those targets to build a sales pipeline,” said Peter Melby (pictured), chief revenue officer at New Charter Technologies, a nationwide MSP. “And everything has to be communicated throughout the entire organization.”
A successful business and sales plan should cover a fixed amount of time. It should be reviewed and updated regularly on set dates, such as one-year and five-year periods, said Scott Barlow (pictured), vice president of global MSP and cloud alliances at Sophos, a security solutions vendor. Barlow also works with a longer-term 10-year plan, which further helps companies predict, manage and plan for headcount across departments.
“A sales plan drives and finds the business,” Barlow said. “It’s going to align the entire company with the overall objectives.”
Comprehensive business plans aren’t easy to develop and maintain, but they are essential to building a healthy company, especially one that’s looking to grow and protect itself during economic swings. Andra Hedden (pictured), chief marketing officer at Marketopia, a provider of marketing, lead-gen and sales solutions for MSPs, works with a lot of small MSPs that follow the same basic plan: Find a referral, close that business, find the next one, and continue to grow. Repeat. While that plan can work when the economy is stable, it doesn’t offer enough to protect company’s during instability
“That’s great, but that’s a business that ebbs and flows,” she said. “That’s where a lot of MSPs find themselves in drought times and surge times, because there isn’t much of a plan.”
Small companies grow and succeed by developing more comprehensive plans that go beyond the basics. They should include the type and size of investments needed to add and support the right resources, the processes and salaries needed to hire the right people, and the systems needed to help those employees hit established KPIs, metrics and other goals.
“There are a lot of things to take into consideration when it comes to growth and the elements that are going to get you there,” Hedden said.
The scheduled review processes Barlow spoke of should include a series of check and balances to ensure the company is hitting its goals. Without them, business and sales plans can run off the rails and wind up a useless heap of wasted effort.
“You can’t just develop the plan one day and then think that it’s going to magically work. You’ve got to continue those checks and balances along the way to make sure that you’re hitting those milestone goals,” Hedden said. “It’s a lot of different pieces that continue to build on each other. It’s all a matter of managing those pieces.”
For the sales piece of the plan, it’s important to identify where new revenue can come from. Upselling existing customers is an easy target, since they’re a lot cheaper to sell to than trying to land new ones.
“If you have room within your current client base to expand your services and get them on the same tech stack, realize that’s a heck of a lot less expensive than going out after new customers,” said Jake Carroll (pictured), vice president of sales at OSR Manage, a developer of sales management services for MSPs.
That certainly doesn’t mean to ignore new customers. MSPs, though, have to properly manage the hunt to avoid wasting time and money.
“The MSP model is revenue-driven; it’s resource and cash intensive,” Carroll said. “That requires MSPs to determine how much revenue can be generated from existing and new customers. You’re going to have to plan that out by asking, ‘What’s my ideal customer? What’s the lowest amount of money I want per customer, how am I going to get there?’”
The sales process plays a huge role in a business plan; lead-gen plays a huge role in the sales process. A lead-gen strategy starts with figuring out the key sales stats needed to grow a business: net new revenue, average deal size, close ratios, etc. The next step is how to land qualified, worthy leads: through marketing or demand gen? It’s important to allocate enough money and resources to acquire leads and close them. They’ll end up generating the revenue needed for real growth.
“That’s where you take that next layer of that sales plan and really start to understand and define where and how you’re going to acquire these leads,” Hedden said.
Figure out who your sales reps are going to focus on. Are they your sub-25 customers, existing customers in the midmarket, or new clients in finance or health care? Make sure your reps know all the compliance and other regulations for the particular vertical. Also ask: What’s the size of the potential clients? How are they going to pay? Will there be one-year or three-year contracts? How much should you collect up front? Is the service a consumption-based model? How much recurring revenue can the contract generate.
“All of that has to align with the plan. You have to put it all together so everybody’s on the same page,” Barlow said. “If you don’t have customer profile, your sales reps will be chasing waterfalls and bluebirds.”
Figure out who your sales reps are going to focus on. Are they your sub-25 customers, existing customers in the midmarket, or new clients in finance or health care? Make sure your reps know all the compliance and other regulations for the particular vertical. Also ask: What’s the size of the potential clients? How are they going to pay? Will there be one-year or three-year contracts? How much should you collect up front? Is the service a consumption-based model? How much recurring revenue can the contract generate.
“All of that has to align with the plan. You have to put it all together so everybody’s on the same page,” Barlow said. “If you don’t have customer profile, your sales reps will be chasing waterfalls and bluebirds.”
MSPs looking to grow must create successful business and sales plans tightly aligned to the company’s goals and objectives. It’s not easy to do, but it is essential to the company’s financial and operational health.
Leaders in the managed services space recently shared their insights and experiences on how to develop a solid, effective plan during the “Accelerate Your MSP” workshop at the Channel Partners Conference and Expo in Las Vegas.
MSP Toolkit’s Len DiCostanzo
A well-built, well-executed plan should increase sales and profit; define customers, revenue streams and related sales strategies; protect the company during economic shifts; and establish the checks and balances needed to keep everything on track, among other goals, said Len DiCostanzo, CEO of MSP Toolkit, who led the panel.
We break down all seven tips that could take your partner business to the next level in the slideshow above.
Want to contact the author directly about this story? Have ideas on how to build a successful business plan? Email Jeff O’Heir or connect with him on LinkedIn. |
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