Shownotes
What Does a Sales Plan Look Like for a Small Business?
You’ve probably heard that you should have a sales plan—but what does that actually look like? Why is it important, and how do you go about setting meaningful sales targets?
These are big questions, and I have the perfect guest to help answer them: Catherine Erdly of the Resilient Retail Club. Catherine specialises in helping independent retailers and e-commerce brands grow their profits and take control of their cash flow.
In this episode, we discuss:
- Why a sales plan is essential for every business, no matter its size or stage.
- How to set realistic sales targets.
- The importance of avoiding perfectionism—making educated guesses and refining them over time.
- How to use your sales plan to track performance and adapt your business strategy.
If you often feel like you’re constantly putting out fires in your product-based business, this episode is for you. Learn how to shift from being controlled by your business to being in control of it.
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Catherine's Previous Podcast Appearance: Preparing To Sell Your Products At Christmas
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Transcripts
Welcome to the Bring Your Product Idea To Life podcast. This is the podcast for you if you're getting started selling products or if you'd like to create your own product to sell.
I'm Vicki Weinberg, a product creation coach and Amazon expert. Every week I share friendly practical advice as well as inspirational stories from small businesses. Let's get started. Hi.
So today on the podcast I'm speaking to Catherine Erdly. Catherine helps independent retailers and e commerce brands grow their profits and get a handle on cash flow.
he podcast to talk all things:We are fast approaching the end of the year and it's great to have plans in place for next year and you might have already thought about some of the things you might want to do with your business, but have you thought about how much you want to sell and actually gone into the numbers?
In this episode, Catherine is going to tell you why you need a sales plan, what needs to be on your plan, how to use your plan and everything else around it.
So if you've never before set sales goals or sales targets for your business, hopefully Catherine will convince you this is a really wonderful episode. It's very actionable. So do take some time to listen and then set aside some time to actually go and do what Catherine is suggesting.
And I would love to know what you think. Always get in touch with me. Vickyweinberg.com Enjoy the episode. So hi Catherine. Thank you for joining me on the podcast again.
Catherine Erdly:Thank you so much for having me. It's great to be back.
Vicki Weinberg:Oh, I love returning guests.
But for anyone who hasn't listened to your first episode, or even anyone who has and just needs a little refresher, can you please give a reintroduction to yourself at your business and what you do?
Catherine Erdly:Yeah, sure. Hi everyone, I'm Catherine Erdly. I'm the founder of the Resilient Retail Club, which is my membership group and mastermind for product businesses.
This is my 24th year in the retail industry. I'm a small business and retail expert.
I spent nearly two decades working in big retailers on their stock management, sales strategy, profitability, and now I work exclusively with independent startup retailers and brands to help them to do the same. Have more sales, have more profit, manage their stock effectively, feel less stressed, more. Yeah. More cash, less stress. That's the idea.
Vicki Weinberg:Thank you so much. And I'm glad you touched on sales. That's exactly what I've invited you on to talk about today and in particular, sales planning.
Catherine Erdly:Yes.
Vicki Weinberg:So let's get straight in. If you don't mind, Catherine, with why do you need a sales plan and why do you need a sales goal? Why? Why is this important?
Catherine Erdly:Yes, absolutely. So people often say to me, well, my goal is just to sell as much as I possibly can, which I totally understand. I'm sure we all feel the same.
But how do you know when you've hit that goal? There's lots of different reasons for having sales plan, but one of the top ones really is because when you. When do you know when to celebrate.
When do you know when to actually say, right, I did what I was going to do. Whereas if you say, oh, I just want to sell as much as I can, like, you'll just never know.
Basically, you'll never really know whether or not you've hit that. So I think that's the first thing, just to have that real tangible sense of achievement.
The second reason is that imagine if you were trying to hit an actual goal or an actual target. Like if you had a bow and arrow, for example, and you couldn't see the target, then there's no way that you'd ever be able to hit it.
So it's the same in business. If you don't know what you're aiming for, how do you know how to hit it?
And I think also something else that happens during the sales planning process, which is a really wonderful, can be wonderful, creative process for small business owners, is it forces you to look at things like your seasonality. So, for example, if you're going to make a plan for the year, it allows you to see, right, which are my busy months and which are my quiet months.
And it can be as simple as saying, well, actually, I know that August is always my quietest month.
So if I'm setting myself a sales plan, I can actually go ahead and assign less sales to the month of August, because actually, I want to be on holiday for two weeks. I want things to be a bit quieter. And that's actually a real positive.
And it feels much more controlled than getting to August and thinking, oh my goodness, why am I not getting as many sales? And it all just feels a bit hectic. So sales plans, they help you with your motivation.
They help you with that clarity, making sure that you can hit those goals. They can also help you be really realistic about the overall seasonality of your business.
And they can also just help you feel much more confident and calm and in control.
Vicki Weinberg:That's so helpful. Thank you. And I just realized I should ask an even more basic question, Catherine. When we talk about a sales plan.
Are we really talking about thinking how many sales am I aiming for in any given quarter? Maybe months.
Catherine Erdly:Yes.
Vicki Weinberg: year. So we're recording this:So is it looking at the year and saying I would like to get X amount of sales and I predict I'll get this many in Q1, this many in Q2?
Catherine Erdly:Yeah, yeah. I personally like a monthly sales plan.
I mean if, when I worked in big retailers we had weekly sales plans that then got taken by the store teams and broken down into daily hourly plans. I mean in big retailers they would break it down by, but literally by, to, by hour and then they'd even assign it by member of staff.
So how many sales is each member of staff going to do per hour per shop in order to roll that back up to the main overall plan? So big retailers get really, really super granular.
I think for small business owners, you know, a weekly sales plan can be trickier than a monthly sales plan because you, we all know you can have a quiet week and then a good week and it's probably not good to really stress about it too much because there are just, you know, there are mysteries in this world and one of them is why says one day you'll have a really quiet day and one day you'll have a busy day. And in a way the days and even the weeks don't really matter. What matters is the longer term chunks of time. So like those, the months.
So when we're talking about sales plan, I would, I would like to see it by month, I would like to see it ideally by sales channel. So for example, if you do your website and wholesale, then you would probably want to do yourself a plan for both of those.
If you sell on Amazon and on Etsy and on your own website, have a plan for each one of those that you can then add all together so you know what you're overall aiming for. So I would say ideally, sales plan by channel, that then adds all up to a number per month and then that will give you your number per year as well.
Vicki Weinberg:That makes a lot of sense. Catherine, thank you. And because I think you're right, a month seems much more achievable than a week.
Especially as a small business owners, lots of us might want to be flexible, we might not, you know, there might be a week where we can work less because there's something else going on or whatever it is. And I think you're right if you're sort of, if you're aiming for targets every week and you're for any reason not hitting them.
That can feel really demotivating. Whereas a month is a pretty good chunk of time.
Catherine Erdly:Yeah, a month helps you kind of even out a few of those like idiosyncrasies that you get on the day to day and the week to week. So it allows you to just have an idea of how you're doing.
When I work with people one on one, I do a lot of so people in my mastermind, for example, I work with them very closely making their sales plans and things like that. I would say the majority of people will work on a monthly basis.
There will be a few exceptions for people who have, for example maybe fashion where they have a fashion drop and it's going to come in and hit and then they're going to see their sales over a certain period of weeks and that we might want to look at the weeks because we need to react quickly if something's doing well. But I'd say for the vast majority of people that work with a monthly plan is better.
And I'm a big believer as when it comes to plans that simple and used is way better than complicated, complex and nobody ever looks at it because you can create all kinds of very, very complicated sales plans. And I have in my life created many, many very in depth and detailed sales plans when I worked in big retailers.
But there's no point doing that in this in a small business.
I'd rather you write on a poster note, I want to take 5k this month and stick it on your monitor than to have a hugely convoluted, complex plan that just never gets looked at.
Vicki Weinberg:That makes sense. Thank you.
And we'll talk a little bit more in a moment because I have got some questions actually about what could we, should we include in our sales plan? Because I'm thinking that we can probably be as simple as I want to make X amount a month or we could maybe get slightly more detailed.
So definitely go into that. So something else I'd really like to know is, so some of my listeners have maybe been running their business for a number of years.
Some might be just starting out, in fact, perhaps, you know, product hasn't even launched yet. Yet is launching early next year. Super, super exciting.
Catherine Erdly:Yeah.
Vicki Weinberg:Does it matter what stage your business is at when it comes to creating a sales plan? So firstly, should you know, would you have one right from day one?
And secondly, I guess on the other side, if you've been in business for a couple of years and you sort of, you know, you know, you're forecasting, do you still need one?
Catherine Erdly:So it's a great question. So I think when you are first starting out, you should still set yourself a sales plan.
And the reason that is, again, it helps you with your motivation. It helps you get really clear about things.
The reason that what's going to be different though, when you first start out, you're going to have to be working on some basic assumptions. So from that, I mean, and this is one of the things that people find really tricky about sales plans.
They're like, well, how do I come up with a forecast? Well, a forecast is basically an educated guess.
And also the other thing to say about sales plans, and I'll come on to this a bit more later, is the purpose of a sales plan is actually not to be right, because you're never going to get it right. You know, we used to have this game that we used to play when I worked in one particular retailer.
And every week we would guess the num, the exact number that our department was going to take that week. And the person who got the closest got to use this disco calculator for the week, which looked a bit like the dance floor from Saturday night Viva.
And then you could press the buttons and they all lit up different colors. So, you know, as you can imagine, this was hotly contested. Who got the disco calculator?
But the point was, is that we would all guess, like who could get the closest to the amount of money we were going to take. And of course, nobody ever got it completely right. Nobody was ever on the nose.
So when you are doing a sales forecast, you are, you're never going to get it right. You're never going to say, I'm going to take £3,000 this month and take exactly £3,000.
You're just looking for an educated guess of an amount that you think is about right, so that you can make other plans in the business accordingly. So when you're first starting out and you maybe haven't really got going yet, you can still forecast.
It's just you're going to have to be building out on based on some assumptions. So, for example, you might say, right, I think I'm gonna make. I'm gonna get.
I don't know, I reckon let's say I get 50 people coming to my website, or let's say 100, 100 people coming to my website a week.
Let's say I'm gonna, that's gonna be my goal that I'm gonna go for, to start off with, right, conversion rates, the Number the percentage of people buying compared to the percent. The number of people coming is around 2% for an average E commerce business.
Okay, let's assume I do 2% then, okay, I'll get two sales and I reckon most people will buy, I don't know, two items. They're 30 pounds each. I think it's going to be 60 pounds a sale. I think that I'm going to take 120 pounds a week to start off with. Right.
So that's built on loads and loads of assumptions.
You've assumed your web traffic, you've assumed your conversion rate, you've assumed your average transaction value, you've assumed your number of purchases. So you've got all of these different assumptions, but you can put them in and you can start creating a plan.
Now when it actually starts, you're going to see different things happening. Maybe you were wrong about the web traffic, maybe you were wrong about the conversion, maybe you were wrong about all of it.
But you've suddenly now got some data that you can start feeding into these assumptions so that as you go forward and as doing more forecasting and more, more planning, you can actually say, all right, well, actually do you know what? My, my conversion rate is generally around 4%.
So I think I'm, you know, this is, this looks more realistic and over time you refine it and you get better and better at it. So if you're, if you've been going for a while, you're going to have loads of that data in your back pocket.
You may not even need to get that granular. You might just say, okay, well actually I've been on like 10% up on the year for the last couple of years.
I think that's going to keep going this year. Therefore I'm going to plan in my sales like this. Roughly speaking, I reckon I'm going to be 10% up on every month. But now you've got a framework.
The key thing is, is that you can kind of intelligently explain where that number came from. When I talk to people about their sales plans, I'm not looking for them to have, you know, and really nailed it super precisely.
But if I say, if people, somebody says to me I'm going to be up 50% on the year. And I'm like, what are you basing that on? And they're like, I don't know, I just think I might be. Then that to me is a bit of a red flag.
Vicki Weinberg:That's really helpful. Thank you. And I liked what you said as well about the Data.
Because it sounds like if someone is fairly new, maybe this is, you know, they've just launched their products and they're. They're forecasting out the year. They can. Well, as all of us, actually, the plans can change if the data dictates it.
So, for example, you think you're going to get 100 people come to your website per month? Let's say the first month you have 200 visitors.
Catherine Erdly:Yeah.
Vicki Weinberg:And you double your sales target. You could, when you're looking at future months, you could take that into consideration. And of course, the same thing goes the other way.
So, yes, it sounds like this is very much something you need to be on top of reviewing, not creating in December, looking again next December.
Catherine Erdly:Yeah. And just not the magical thinking. Because if somebody says like, I'm going to be 50 up on the year and yeah. And they.
There's no base to that, then that's, to me, suggests that there's risk in the plan.
Whereas if they're like, well, because I've been 50 up so far and every year I've been 50 up, or, you know, I'm going to spend more ads or I'm going to start a new sales channel and this is how much I think it's going to generate or all of those things, then those are all ways that they've got something to back up that plus 50%. So, yeah, I think you can.
If you give five people who are very talented and experienced in forecasting the same number to forecast, they'll come up with five different answers and that's okay. What you're looking for is the kind of rationale behind it.
You're looking for people to have a logical reason for why they think they're going to take what they're going to take. To put a number in that seems reasonable and then to react to it as you go along, which is really the purpose of having sales plan.
Vicki Weinberg:Thank you, Catherine. And we'll definitely talk about how we use it going on, but that makes, that makes a lot of sense.
I think the key thing I'm taking away here is that whatever number you put in, you have to be able to justify that. And when I say justify that, I don't mean you have to be able to say, I deserve this amount of money.
I mean justify it as in you're looking at the data or what you think the data might look like and you can explain where you got to the numbers. And actually that sounds to me like a really sensible test. Once you've done your sales plan, yeah.
Is to maybe explain it to somebody else or even talk it through to yourself, but just to be able to say where those numbers came from. Because I think it can be really tempting. And I've certainly done it. Not with sales, but, you know, with, I don't know, numbers for things.
It can be really easy to just put a number out of thin air, can't it? I think we've all been guilty of that. At some point, I'm sure I want X amount of followers or I want whatever it is.
Catherine Erdly:Yeah.
Vicki Weinberg:And sometimes those numbers are very realistic, sometimes not. But I've definitely been in a situation where I know I've just picked a number out of thin air and it hasn't been based on anything factual.
Catherine Erdly:Yeah.
Vicki Weinberg:And that's quite dangerous.
Catherine Erdly:And that's, you know, and that's okay. And there's an element of that. Although often that happens. But what, as I said, like, the real joy of doing it that way is that once you. If you.
If your number does vary from that, you get to kind of really dig in and go, well, why? And if it's based off a series of assumptions, you can see which one of your assumptions was correct or incorrect.
And that then helps you refine it going forward. And so you get better and better. The more you do sales planning, the better you get at it.
Vicki Weinberg:And hopefully as well, if you are making assumptions based on data, I hope as well that would mean your assumptions might be more achievable, which would also give you more to celebrate because I think that's really important as well. I think part of having a sales plan is, as you said right at the beginning.
But I will go, yeah, I achieved what I wanted to this month, or I exceeded it, or. And not to give yourself a hard time if you don't.
But I think if you're forecasting, I don't want to say sensibly, but if you're using data and what is known to forecast, I think and hope you have a better chance of hitting it than if you're guessing at numbers.
Catherine Erdly:Yes. Yes, for sure.
Vicki Weinberg:So thank you so much for everything you've shared on sales plan so far. And now part of the reason that I'm actually what would be good to have this episode is I know that many people don't have sales plans.
Catherine Erdly:Yeah.
Vicki Weinberg:And I'm sure you've come across this as. Yes as well.
And for some people, actually this might be quite a new concept, which is why I've asked some of the very sort of basic fundamental questions to get everyone thinking, what are some of the reasons you hear for people for not having sales plans? Because I'm sure there'll be people thinking, well, I don't need a sales plan, I'm doing great, I'm making X amount a month or as many sales.
Why do I need a plan?
Catherine Erdly:Yeah.
Vicki Weinberg:What would your answer be to that, Catherine? And what other things do you hear? Reasons why people just aren't keen.
Catherine Erdly:People don't like to tempt fate. So that's when people, people say, well, what if I make that plan and I don't hit the number? And then I'll feel really disappointed.
Which I do understand. And I do think my feeling about sales plans is that they should be.
Have a level of excitement to them that you think, oh, if I hit this sub, you that would be great. But not so much that it's just fear or just overwhelm or just, yeah, this is never going to happen. Right.
So for example, if you know, you've, if some, if you've set yourself, you're like, right, I'm going to double my sales. And that's not really based on anything other than the fact that you'd really like to double your sales.
And every month you look at your number and you think, I'm just never going to hit that, then that's not very motivating.
So you want it to have this sort of like little bit of excitement, little in the pit of your stomach, you know, oh, if I hit this number, that would be amazing. But not that it's so far off that you just feel like you're never, ever going to do it.
And you know, because it can be super motivating, like we touched on earlier.
But like, people who, who run shops, for example, will tell me that like on a Saturday, their team know the target for the week and then, you know, Saturday's the end of the week, then they kind of have that bit of real oomph to like, okay, I'm going to hit this goal.
And I think that that can be the same even if you're, you know, working with yourself, I think towards as you get towards the end of the month, that motivation to put out an extra post or to, you know, do another listing or to send another email because you're like, oh, what if I can hit that goal? So, yeah, so people definitely say that they don't like to tempt fate. People don't really get why it's worthwhile use of their time.
And I think, yeah, those are the main objections, really. It's the time. And it's also that. That fear about like, well, what if I don't, I don't want to write it down.
I don't want to tempt fate if I get it wrong. And, you know, it's all fine. The other thing, you know, well, why take the time to do it? Is we've talked about the motivational aspects.
We talked about the need to have a goal, to actually be able to hit it.
But then I think there's also some really key fundamental underpinnings to having feeling like you've got control of your business that having a sales plan really helps with. So, for example, one of the things that people often tell me is that they want to. They wish they could pay themselves more from their business.
So they, they would like to pay themselves more from their product business. But they don't really necessarily feel that they can. And sometimes that's because, I mean, there's lots of reasons why that might be.
Maybe their profit margins aren't high enough, their overheads could be too high, they could have spent too much money on stock. But sometimes it's also about the fact that they don't have any forward visibility.
So they're nervous that if they take the money out, but then the money won't be available for them later on to spend.
So one of the things that you can do with the sales plan is it's also one of the first steps in making a stock plan, which is where you set yourself a budget for how much stock you should have.
Because it should always the answer to the question how much stock I should have, which I get asked a lot, is always comes back to, well, what your sales going to be. So a sales plan gets you a stock plan which then gives you budget for how much to purchase.
Once you've got how much you're going to be purchasing, you can build yourself a cash flow, a really good solid cash flow forecast where you can say, this is what I'm planning to have come in every week, this is what my bills on each week, any given week, and this is what my expenditure is going to be on stock based on my plan.
And all of a sudden you've gone from just looking at your bank account thinking, I hope I'm going to have enough money to cover everything, to actually having a spreadsheet where you can see all of that information mapped out for you. And that to me is such a powerful position to be in as a small business owner.
Because you've got visibility, it helps you have confidence it helps you make confidence, confident decisions about how much you can pay yourself and actually see that you can take that money out and it will be replenished by sales. It helps you avoid mistakes such as stockpiling. It helps you really get to grips with what all of your expenditures are week on week.
And it kind of takes you all the way from feeling quite out of control or like you're winging it, to feeling really in control, really confident, lots of clarity and ideally more money as well, because you can really see almost like what the plan is before any of it happens. And that is the. That none of that, all of that starts with a sales plan.
Vicki Weinberg:That's brilliant. Thank you so much, Catherine. I think you've convinced everybody. I think that I. And I agree. I think that all sounds really empowering. Don't worry.
And we'll talk in a moment as well about sort of how you use your sales plan.
But I assume as well that if you are using your sales plan, like I said, we can go into more detail is it will also help in, you know, help you have a really clear picture of what's going on, what's working, what's not working. Yes.
So we'll talk about that a bit more in a moment, but it'd be great to ghost cover, and we've talked about it already, but I'd like to talk a little bit about what you include in your sales plan. So is it as simple as I'm selling on these channels and this is the number of sales I want to make on these channels per month?
Catherine Erdly:Yeah.
Vicki Weinberg:Or do you need to go into more detail or is there something else that sits behind it? That's the how.
I guess that's what I'm trying to get to, Catherine, is are we looking at the numbers or do we go into that and how am I going to achieve this?
Catherine Erdly:I think this twofold. I mean, I think that, yes, in the. In the most basic sense, the sales plan is.
I usually do it in retail value, so I expect to take £1,000 on my own website, £2,000 on Amazon, and, you know, £500 on Etsy in January. So that would be it. When you build out a stock plan, you need a few other bits, but that's that.
If we're talking specifically about sales plan, then that's what we're talking about. We're talking about cash sales by channel, by month, and that's pretty much it. Now, if you.
What you're talking about, the kind of how, that's what I would Call building blocks.
So in other words, if you, if you're, Roughly speaking, trading 20% up on the year, and, and that's just how it's been going, and your audience is growing and your traffic's growing and everything's kind of ticking along, growing nicely, then you plan that you're 20, going to be 20% up on the year in January. Like, that almost doesn't really need much of an explanation. You can kind of go, right, I can see that.
I'm just planning this along my, what we call run rate. So run rate is basically how you're currently trading against the year.
So I looked at last year's history, I looked at how I'm currently doing across the year. If you combine those two, this looks like a sensible number for January.
When you do it that way, then you're not really necessarily having to talk too much about the how because you kind of know, because it's through regular growth, you know, normal growth.
Now, if you are then going to say, actually I think January is going to be like plus 500%, then I would say at that point, you know, you probably do have to. Why are you saying that for January?
Is it because, for example, you've got an influencer campaign that you've been working on, it's going to go live in January. Do you have an event that you're going to go to and you're going to, you think you're actually going to take two grand at that event.
If you are going, you know, are you going to have a new product launch and you think that's going to be really good and you're going to, you're going to have that slotted in. So it's kind of a combination of those two things.
Sometimes you don't need to say what the how is, because that's kind of your overall business strategy and what's been going on and you're expecting it to carry on on a certain trajectory.
And the other part of it is if there are specific, you know, big months that you're planning or big anomalies in your sales figures, then that is the kind of thing that you might want to say. Okay, let's, let's explain a little bit as to the why or the how, rather.
Vicki Weinberg:That makes sense. Thank you.
And it sounds like, again, it's not necessarily for anyone else, it's just for you to be able to explain, as you said, this thing's happening this month and this is how I think it will impact my sales, for example.
Catherine Erdly:Yeah, yeah, yeah.
Vicki Weinberg:Yeah, perfect. So let's talk a little bit about how you actually use your sales plan. So we're going to create it now. Let's say we're in December.
We're going to create the plan in December. Soon it will be a new year. We get going. How often do we need to be looking at the plan? How often do we need to be updating it? What do we do with it?
Because I think it's one of these things. I'm sure lots of us, myself included, have made a really good plan in December and then forgot about it until July.
I think it happened the best of us.
Catherine Erdly:Well, I think that I would want to tie it in with both a sales plan as well as a bit of a, like a focus by month for the business. What am I going to be focusing on? Probably like an outline of a marketing plan, getting that going.
So I think that once a month is a good, a good amount to update it. So to be able to just take time. Once a month, stop what you're doing. Go have a look at what was the plan for the month. Did I achieve it?
If I did, what do I think helped with that? And if I didn't, what were the particular assumptions that didn't happen or things happened differently than I thought?
I like to do like a bit of a, what worked well and added value each month. And also, what would I do differently if I could do this month again?
So inside my membership group, the Resilient Retail Club, we have kind of reflection sessions where we look back and then we to take the time to look forward. And so I would say once a month would be a great time to do that.
Vicki Weinberg:That makes sense. Thank you. And I guess when we're looking at it, are we just looking at.
Okay, I thought I was going to make £2,000 on Amazon this month and £1,000 on my website. And these are my actual totals.
Catherine Erdly:Yes, yes.
And then again, if you're using a stock plan, then that has impact, has implications if you on how much money you've got to spend on stock in later months. But you know, in terms of the sales plan alone, I would update it with your actual number. But I would also have a little bit of a think why.
So if it was way better than you thought it was, what happened?
You know, oh, maybe I got to participate in, you know, ebay, for example, might offer some, some people on that platform, like an opportunity to take part in a promotion. Did that work really well for me? Okay. Some of the money came from, from that Working really well on the website. Like, how did my traffic break down?
Was that mostly from email? From social media? Like, what were the main things that really moved the.
And I would record those even if it's just like a couple of sentences per platform. Because one thing I can guarantee is that this time next year, you will absolutely never remember what it was and why.
Why your numbers were what they were. Even if you feel like you'll never forget it, it's always good to keep records. And then you have got that information.
So when you're coming to do your forecasting and your planning for the following year, you can look back and go, oh yeah, do you know what? I wonder if they'll be doing that offer again, if I'll be able to participate.
So, you know, I think that there's, there's lots to be said there for just, just once a month updating it. You know, if you want to check in mid month and see how you're doing, then that's great.
But once a month to really sit down and go through it and make.
Vicki Weinberg:And kind of update it, that makes sense. Thank you.
And I think also it's good because if you can see, for example, that, I don't know, you're getting a lot of your website traffic from Instagram, that might also inform your priorities for coming months.
You might say, okay, I should be posting lots on LinkedIn, but it seems people are finding me on Instagram, so maybe I need to think about spending more time here. As an. As an example, yes. And would you be looking at amending your plan going forward?
So let's say, for example, you forecast X amount of sales in January and you massively exceed them. And that would be great because as January as we know, it can be quite a tough month.
Would you then look at the remainder of the year and say, okay, I did better than I thought in January, you know, maybe I need to raise my goal for future months. Or would you sort of say, okay, maybe give it a couple of months before we decide to make changes?
Catherine Erdly:I always like to look at it on a quarterly basis for a reforecast because I think if you change it, you know, even when we say we let zoom out to look at the months instead of the weeks, you know, things can happen. So one of the things that often messes stuff around is Easter.
So some people might have a better March than they expected, but a tougher April or vice versa, depending on where Easter fell compared to the year the year before. So I would almost rather you look at it like if January does really well, then like, okay, let's go into February. If February does really well. Okay.
All right. Well, in that case, you kind of might want to ask yourself, well, what do I think about March figures? Do they seem realistic?
Like you can always tweak them if you want to, to kind of get a, get a better idea of how you think it's going to go. But I wouldn't be too, too reactive after one month because, you know, they can also be anomalies within the month. Months.
Vicki Weinberg:That's helpful, thank you. And what about if things go the other way? So let's say sales are way down, they're much worse than expected or something happens.
Let's say, I don't know, you have a supplier issue and suddenly your best selling product is going to be out of stock for 10 weeks or something. What, what do we do then?
Because I'm assuming in that situation we don't want to hold fast to our plan perhaps because, yeah, we know there are things we need to consider, but how does that impact our sales forecasting in that case?
Catherine Erdly:I think in that particular case what I would do is I would have an idea of what I thought that was going to do to the sales. So for example, if your bestseller is going to be out of stock and that's half your sales, you might want to take those sales out of those few weeks.
But you might equally then want to say to yourself, right, well, if I want the year to come out the same, I'm really going to have to push more in these months and what can I do to kind of regain ground? Can I do pre orders? Can I do, like, what can I do to get this money back?
It's, it's useful to kind of map it out, I think ahead of time as well, so that, you know, okay, well, I know this was the plan, but I didn't achieve it. But this is why and this is what I think it cost me.
And you know, it can also help with conversations with depends on how much influence you have over your suppliers. But like for example, in big retailers they would ask for compensation.
For example, if you were supposed to be getting something and you weren't going to get for several weeks.
I know that's not always the same with small businesses because you don't get as much sway, but might, you know, might be worth kind of bearing in mind.
So I think if there, if, if overall sales are much lower than you've been forecasting, I would want to know why that would be my first question would be like, put the panic aside.
I know that when this happens, then people can go into this mode where they bury their head in the sand or they tell themselves it's because they're terrible and they're doing, you know, like, everyone hates their product now and that's, that's it. But actually, if you boil, if you look at it, then if you can kind of pull it back to the numbers, like, what's happening? Is it a traffic problem?
Is it a conversion problem? What did you have last year that you were selling that you're not, that's not selling this year?
Is it that your range hasn't moved on, you don't have new products compared to last year? So. So that it feels a bit stagnant? Or is it actually last year you had this one product that was doing 40% of your sales.
In this year, the supplier failed to deliver it or the supplier didn't have a new version of it. Therefore, you need to make decisions to say, right, well, what am I going to do about this?
And what am I going, you know, how am I going to move this on? So I think that in that particular case, then digging into the why of what's not working is, can be really beneficial as well.
And yeah, you may want to write down your sales plan for future months just to kind of help you out. So you don't feel like you're aiming for a really unrealistic number. But then you also want to try and do that digging into what's going on.
And then also I think this is the other beauty of a sales plan.
And again, when you tie it in with the stock plan and the cash flow plan, like if you've got a couple of months where sales are a bit wobbly, then what that's going to have an impact on your business finances, probably, if not immediately, then a little bit further down the road.
Whereas if you've got a sales plan and then a stock plan and a cash flow plan, you can actually see that and you can maybe say, right, well, I'm going to pull back. I'm not going to buy so much of, I'm not going to spend so much on stock to offset the fact that my sales have been a bit lower.
So therefore you can kind of keep yourself out of trouble a little bit. And also helps you make decisions about spending money in the business when you can actually see it all mapped out.
And then you can say, right, well, worst case scenario, if these sales trend continues, okay, where do I, where can I cut costs out to try and keep things kind of under control. So it's, for me, it's a lot about that ability to look forward, which you just don't have if you don't have these plans.
Vicki Weinberg:Thank you so much. Because I think while it can be scary, particular things aren't going as planned.
I agree with what you said earlier in this conversation that it's just much more empowering if you can, if you know it's happening. First of all, because you're tracking and you can see, okay, I'm actually, I'm down on last month or last year or whatever.
Catherine Erdly:Yeah.
Vicki Weinberg:Also that you can dig into the reasons behind it and then as you say, you can make informed decisions. So, yeah, I think while this might. Might sound a little bit scary, I really hope it doesn't, but it could.
I think actually you're coming from a place of a lot more power if you know, okay, this is happening. Yeah.
Rather than just, you know, ticking on over and then realizing a few months down the line or actually, I'm not where I wanted to be and, you know, we're free courses through the year or whatever it is.
Catherine Erdly:Yeah, yeah, yeah, totally. I think knowledge is power. I really believe that.
And I believe that it could be hard to look at these numbers sometimes because it can feel very confronting. And sometimes people just say, I just don't want to know.
But you're always going to be in a stronger position if you do know and you look at these things because there's so many times a way out of. A way to just keep out of trouble.
If you just kind of make a few adjustments, which you just can't do, if you've got no future view of what you think you're going to take or what you think your expenses are going to be, then it's very. It's almost impossible to do it. So I think a sales plan is a great first place to start.
Vicki Weinberg:Well, thank you so much. You've answered so many questions about sales plans. Catherine, thank you for tolerating all of my questions. Going detail. I think it's so useful.
And whether you, you know, you've had a sales plan every year and this is, you know, all, you know, what you do anyway, or if you've never even thought about starting creating a sales plan and you're about to go and do it. I think this has all been fantastic.
And final question to finish on, because I'm hoping, Catherine, everyone's going to finish listening, go off and make their plans, is what would your number One piece of advice be when you're planning your sales for next year, just, just do it.
Catherine Erdly: do I think I'm going to take:Like, I often tell the story about how one time when I worked in a big retailer that was like 100 plus million pound retailer and I had to work with, I had a new boss come in and we wanted to replan everything, just to kind of like go over all the plans, make sure that we were happy and we were just like going through, just going through the months. Right, what do we think? March? 30 million? Yeah, 30 million. Okay. How's that going to split out? Okay, I reckon dresses is going to be half of that.
Tops is going to be this.
You know, we weren't spending hours and hours, hours agonizing over each month and each number because we just needed a framework that we could then start to work with. And I think this is the same with the planning. People start and then they go, oh, I don't know, this look seems really complicated.
You know, say you're going to take a thousand pounds in every channel every month. If, you know, start with, you know, whatever seems realistic, feasible, just put a number in and then go from there.
And then, you know, you'll see the benefits of being able to tweak it.
And the more you spend time thinking about it, the more you're going to be able to come up with a realistic number, the closer you'll get and the more you'll understand about your own business, which is hugely powerful and a great place to be.
Vicki Weinberg:That's really helpful. Thank you so much, Catherine.
Catherine Erdly:Thank you for having me.
Vicki Weinberg:You're welcome anytime. Thank you so much for listening. Right to the end of this episode.
Do remember that you can get the full back catalogue and lots of free resources on my website, vickiweinberg.com Please do remember to rate and review this episode if you've enjoyed it and also share it with a friend who you think might find it useful. Thank you again and see you next week.
