Step One: Setting Targets.
Creating a realistic and measurable plan for your agency’s new business is critical, and what better time than the start of the year to get one down on paper or review your current one and see if it is still fit purpose.
As the old saying goes “He who fails to plan is planning to fail”.
The first stage in any plan is setting a target. Targets are the foundation of a new business plan for blindly obvious reasons, and they are also the reason that so many of them, into which pour blood sweat and tears are discarded before the clocks go forward.
We see many occasions when targets are set simply by looking at what was achieved the year before, then adding on a bit – say 25%, then handing this figure to new biz and/or account teams and saying “go get ‘em, tiger!”.
This is wrong. The first targets set should be qualitative ones. Achievements that will clearly bring in new revenue and which tie in closely with the overall vision of the agency. Examples could be winning a strategically important account, growing a number of existing high potential clients, winning an international client, moving to a retained model, entering a new market, or moving upstream and offering more strategic services to clients.
Once you have a realistic number of these qualitative targets, you can then start to break down what that is going to mean in detail.
For example, you might have a plan that looks something like this:
- Grow one of the accounts a, b and c – we’ll achieve this by cross-selling our digital services into them which is likely to take 3 – 6 months. So we’ll target 8 months of increased revenue at an average rate of £25,000 per month or £200,000 per year.
- Win an automotive brand – our experience in automotive is great, but we have no live clients. We don’t have any current conversations or opportunities, so we’re starting from scratch. It’s going to take us 6 – 9 months to convert one but if/when we do it will bring in £100,000 by year end.
- Win an additional 4 clients for our core service – a big one, two medium-sized ones and small but high potential one. We’ve got a healthy pipeline, reputation and case studies in this are, and it is likely we’ll land one a quarter which will deliver £300,000 in new revenue over the year.
From this, you can then create a best case (nearly everything going right), realistic (many things going to plan) and pessimistic sales forecast (OK).
It’s much easier to judge how plausible a target is by breaking it into events. Numbers alone rarely tell you what really needs to happen to achieve growth, and for a new biz team or anyone else who is focused on it, there is nothing more demotivating than an unrealistic target.
Then it’s all about ongoing pipeline measurement and forecasting, month-on-month. Targets should be living and breathing, so its OK to adjust them if things go to plan, market situations change or if you bring in more resource.