Welcome to issue 79 ! Did someone forward this to you? If so, Subscribe here!

Hello, friends!

I’m going to try something slightly different this week.

There are two ways you’ll be able to consume this weeks content. I have the written copy, like normal, if that fits your fancy.

Additionally, I’ve been creating interactive videos on Youtube to better explain sales and simplify it as much as possible. Since this week has some math, visuals could help drive the point home so I am embedding that Youtube video below if you’d prefer to watch it.

Same concepts just presented in a different way.

Enjoy!

If you're a startup founder, predictable revenue is the hardest part of the job.

Some months you’re on top of the world just coasting and then the next month might be a complete goose egg. While you’re scratching your head, you’re continually wondering if you’ll hit the yearly revenue goal you set for the year.

→ These two things are actually more aligned that you might think.

An annual revenue goal seems great, in theory, and gets you excited as you start the year. It’s sort of like signing up for a big race.

However, if you don’t break it down into smaller chunks and become more surgical, it can put you behind early and having to play catchup. You cause more stress than needed.

So let's fix that.

Let me share how you should think about your revenue targets and then how you’re going to ensure you hit or exceed them.

First, we have to get nitty gritty into the numbers.

Your annual goal is not the end-all-be-all, it’s important, but becoming more granular is what keeps you focused.

As a simple example, let’s say the annual target you set for the year is $360,000.

First, we need to break it into H1 and H2 (First half and second half.)

→ That’s 180k for each half

Next, we break it into quarters

→ That’s 90k per quarter

Finally, we break it into months

→ That’s 30k per month

Now here's why this matters.

Let's say you're five months into the year and have made $100k. If you were “on pace” to hit your target you’d be at $150k (30k per month x 5 months).

So, since you’ve done $100k, you’re currently $50k behind your goal.

$50k behind can be made up. However, if you were only focused on your annual number, doing $260k for the remaining 7 months feels daunting.

By chunking this out into smaller bites, it makes it easier to digest, helps you focus on the small activities and doesn’t make the road ahead as daunting.

Secondarily, and more importantly, when you know your monthly or quarterly targets, you can be more accurate with building the pipeline to achieve it.

Real talk here. You have to be focused on total pipeline, not just your revenue number.

Because it’s impossible to hit the $360k goal with only putting $360k in your pipeline.

You don’t win every deal or they push or they go dark. Nobody has a 100% win rate.

So, we need to create a buffer of pipeline to cover those types of deals.

How much buffer? We want 3-4x our revenue goal.

So, for our example, let's use 4x.

That means to hit your $360k number, you actually need $1.4 million in pipelineover the course of the year.

Broken down monthly, that would be $120k ($30k quota x 4).

Now let's say your average deal is $10k in annual recurring revenue (ARR).

To hit $30k a month, you need three deals to close.

→ With me so far?

But since you don’t close 100% of your deals, you need to make sure you have enough pipeline coverage.

3-4x Pipeline would = 9-12 deals sitting in your pipeline that month.

Same math at the quarterly level.

$90K quota, $10K deals, that's nine deals you need to close. Which means you need 27-36 deals in your pipeline to get there.

Annually, that math works out to roughly 140 deals in pipeline to close the 36 deals you actually need to hit $360K. (36 deals x $10k per deal).

When founders miss their number, it's rarely because the goal itself was unrealistic.

It's because they never had the pipeline coverage to support it.

There are a few variables in all of this and it comes down to:

One thing to remember: Don't load your pipeline with one big whale deal and a handful of small ones to round it out. If that whale pushes or disappears, your whole pipeline takes a hit. It’s good to have those but you don’t want to rely on them.

Spread it out. More qualified deals, smaller bets, steady backfill throughout the year.

Treat your pipeline like you would investments, don’t bet it all on one stock.

Don't guess at your yearly number and hope. Set it in stone, write it down, and check your pipeline coverage every single week. (Use the Pipeline Audit to help you.)

If this was helpful, forward it to a founder who's flying blind on this stuff, too.

And if you're stuck on a specific pipeline question or sales situation, hit reply. I read every one.

Need to get a quick W? Let me roast one of your sales calls so you can get immediate & actionable feedback to use on your very next call → Get Roasted Now

Want to build a repeatable sales foundation? Let’s see if the 90-day Sales Accelerator is right for you → Grab time to chat here