{"id":526,"date":"2022-08-17T14:21:15","date_gmt":"2022-08-17T14:21:15","guid":{"rendered":"http:\/\/321-growth-academy-2023.local\/growth-math-are-you-doing-what-you-need-to-do-to-hit-your-revenue-targets\/"},"modified":"2023-11-02T21:12:03","modified_gmt":"2023-11-02T21:12:03","slug":"growth-math-are-you-doing-what-you-need-to-do-to-hit-your-revenue-targets","status":"publish","type":"post","link":"https:\/\/321growthacademy.com\/growth-math-are-you-doing-what-you-need-to-do-to-hit-your-revenue-targets\/","title":{"rendered":"Growth MATH: are you doing what you need to do to hit your revenue targets?"},"content":{"rendered":"\n

What can we say, we like math. (Okay, we confess. We \u2764\ufe0f math.)<\/p>\n\n\n\n

But even if you don\u2019t like math, we encourage you to dig into your numbers to understand how you can grow your business. At 321, we call that \u201cgrowth math.\u201d<\/p>\n\n\n\n

<\/strong><\/h3>\n\n\n\n

<\/strong><\/h3>\n\n\n\n

What\u2019s your growth math?<\/strong><\/h3>\n\n\n\n

Well, start with your overall revenue target<\/strong> for the year. Let\u2019s say it\u2019s $100,000. Just for fun.  Next, think about your average deal size<\/strong> \u2013 let\u2019s say it\u2019s $10,000. (Nice!)<\/p>\n\n\n\n

So, now you can determine how many deals you have to close this year <\/strong>to hit your target. We can do that math together: $100k revenue target \/ $10k deal size = 10 deals\u2026 that doesn\u2019t sound too hard.<\/p>\n\n\n\n

But wait.<\/p>\n\n\n\n

What\u2019s your estimated close rate<\/strong>? Very few of us have a perfect batting average.<\/p>\n\n\n\n

 So, how many qualified prospects do you need in your pipeline to actually close 10 deals this year? Let\u2019s say your sales process isn\u2019t yet firing on all cylinders, so you close about 1 in 10 qualified prospects, or 10%.<\/p>\n\n\n\n

So, based on that, we now know how many qualified prospects you need in your funnel<\/strong>, to hit your target. That\u2019s calculated as 10 deals \/ 10% close rate, or 100 qualified prospects.<\/p>\n\n\n\n

Okay, now how many prospects do I need at the top of my funnel<\/strong>? What we mean by that is how many leads do you need that come from both your marketing campaigns (like paid search or email campaigns) and from your outbound sales efforts?<\/p>\n\n\n\n

First, we need to understand the proportion of your leads that become qualified<\/strong>.<\/p>\n\n\n\n

You may get a ton of inbound leads. But they may not all be a good fit with your Ideal Customer Profile (ICP in 321 lingo). Or, they may not be a buyer (hopefully they aren\u2019t tire kickers, or \u201cprofessional learners\u201d ). Perhaps they are interested, but have no immediate plans to buy \u2013 so it\u2019s a good idea to nurture them along, but you can\u2019t count on them converting soon. Or, they just don\u2019t have a burning problem you can solve right now.<\/p>\n\n\n\n

What\u2019s your estimate for the proportion of your leads that end up being well qualified?<\/p>\n\n\n\n

Let\u2019s say 20%.<\/p>\n\n\n\n

That would mean, you\u2019d need 500 prospects at the top of your funnel. (Do the math: 100 qualified prospects \/ 20% of your leads that end up as qualified prospects = 500).<\/p>\n\n\n\n

Hmm. Now this is looking tougher.<\/p>\n\n\n\n

<\/h3>\n\n\n\n

So \u2013 how many prospects do you have to reach every week?<\/h3>\n\n\n\n

We know that consistent sales and marketing efforts is key to growth (and to smoothing out your revenues and cashflow.) So, if we take the 500 prospects you need at the top of your funnel and divide that by ~ 50 weeks in a year (minus a few that you\u2019re hopefully spending on a beach or the ski slopes to recharge), then you need to be reaching about 10 prospects a week.<\/p>\n\n\n\n

Note, that we say, REACHING. That doesn\u2019t mean calling and leaving a voicemail. Or sending an email. I mean actually connecting with the prospect and having some type of back-and-forth dialogue.<\/p>\n\n\n\n

So, next is how often do you actually connect with a prospect <\/strong>on your first try? That\u2019s pretty rare \u2013 so let\u2019s say it takes you about 10 touch points to connect. (And those touch points can be calls, emails, meetings, social DMs, and all the other ways we try to engage them.)<\/p>\n\n\n\n

In other words, you connect with a prospect about 10% of the times you reach out.<\/p>\n\n\n\n

That means you\u2019d need to have about 100 attempts to reach your prospects each week.<\/p>\n\n\n\n

So your growth math would be:<\/p>\n\n\n\n