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Setting and Meeting Annual Sales Goals

On the last day of 2020, we gave you some pointers on how to measure your success after a year that could politely be called “unusual.” One of the points that we tried to make was that every business is different, your business is different, and judging your business based on what others did wasn’t the way to do it. That blog post was, by necessity, an exercise in judging something in hindsight. While many businesses set goals at or near the beginning of each year, goals set in January 2020 were probably not even useful benchmarks by the time March rolled around. The world had changed too much. So now there’s the question that a lot of us are only getting ready to ask ourselves as January 2021 winds down: where do we go from here? Let’s talk about goals.

 

What Kind of Goal Should You Set?

 

You’ve probably heard of SMART goals, and those are a great place to start. The great thing about SMART goals is that SMART Goals are a helpful framework whether you’re setting a formal goal or just thinking about the future. So as a refresher or to bring anyone up to speed on a what a smart goal is:

  • Specific: vague goals can make it very difficult to say for sure that you’ve reached the goal, or can leave you open to reaching the goal as stated but being unsatisfied with the result.
  • Measurable: in addition to be specific, it’s good to have quantifiable figures for your goal. This lets you measure whether you reached your goal and track your progress along the way.
  • Attainable: if your goal isn’t realistic, you’re not only going to fail to reach it, you’re going to take away your incentive to work toward it.
  • Relevant: your goals, and the goals of any employees you may have, need to be based on what makes your business more successful.
  • Time-based: without a date (or frequency) to achieve something, there’s nothing in your goal to work toward.

What does this mean for sales goals in a freight broker agency? The obvious way to make a goal specific is a dollar figure, but there are other ways to set goals. Let’s look at 3 different ways to build a goal, and how reaching one goal every day can help make sure you’re hitting your overall goals.

Increase sales by 15% this year1 new customer per month5 new contacts per day
SpecificIncrease salesNew customersNew contacts
Measurable15%15
AttainableCheck against prior performanceCheck against prior performanceCheck your schedule
RelevantIncreases your profitsHelps reach the first goalHelps reach the second goal
Time-basedThis yearMonthlyDaily

 

What Should Your Goal Be?

Specific, Measurable, Relevant, and Time-based are critical parts of the smart goal, but they’re relatively easy. Attainable, on the other hand, can be difficult. No matter how much information you have, there are factors that just can’t be predicted. There’s also no one-size-fits-all solution to forecasting and goalsetting. In the example above, we assumed that your primary focus was adding new customers. However, your business may be better served by maximizing your business with existing customers, reconnecting with customers from before the pandemic, or another goal that is specific to you.

Whatever your goal is, the most important things are to make sure your goal takes your business where you want it to go, and that have a realistic plan to meet that goal. If you’re launching your own freight agency and serving one customer, doubling your number of customers might be too modest of a goal. If you’ve been established for 10 years and are serving 100 customers, that same goal is probably unrealistic.

As you might imagine, that means there’s no magic formula that you can use to set a goal. That said, there are some very important ideas to have in mind when you set your goal.

Guidelines and Suggestions

 

Be analytical. You don’t need a complicated algorithm, but you do probably want to be aware if sources like Freighwaves’s Market Experts think the industry will have a year of growth or contraction and whether you have more or less manpower for prospecting than you had last year.

Be aggressive. This is the easy part. No one ever set a sales goal of the exact same amount as last year. Remember, if you hit this goal at the end of the year, that should mean your business is in the condition you want it to be in. On the other hand…

Be realistic. This is where the first two points meet. You want to set an ambitious goal, but not one that is going to be out of reach. In the first few years your business is operating, you might grow several times over. Businesses mostly grow at the rate the economy grows, but your growth can easily outpace that, especially as a small business.

Be practical. Another of those items that seems obvious, but is critical to keep in mind, is your capacity to meet your orders. Increasing your sales means not only increasing the amount of time you spend selling, but also increasing the resources you put into booking trucks and offering customer support. A good TMS and a support network like the one Logistic Dynamics offers its agents will help, but you need to make sure you’re ready to take on the added work that comes with higher sales.

The Race Against the Clock

 

One of the biggest mistakes that businesses make is to have a goal in mind in December and not realize that they missed that goal in May. If you’re landing customers that have recurring orders, it’s worth 12 times as much to land a customer in January than December. If you want a million dollars in new sales in a year, doing $25,000 a month with one customer starting in January gets you 30% of what you need. In December, it barely makes a dent. If, starting in January, you add $12,821 a month in new sales every month (and all those sales are recurring), you’ll hit your million-dollar goal. By April, that number is over $18,000, and it’s nearly $35,000 by June. Getting 12 bites at the apple each time in January, and 11 in February, is a lot better than 7 in June and 6 in July.

One final point, and maybe the most important one: remember that these goals are about what you want as a business owner. You earned the right to make those decisions for yourself when you started your own freight broker agency. Your goal doesn’t have to be a million dollars, it doesn’t have to be bound to the calendar year, and it doesn’t have to be formalized any more than you need it to be. If you have employees, they should have formal goals and expectations, but the goals for your business should be exactly what you want them to be. The only thing that your goals need to be are detailed measurements to help your business develop into what you want it to be, when you want that to happen.

Measuring success in 2020

At year end, most businesses take some time to look back on the prior year and judge successes and failures, and the outlook going forward. Sadly, for many small businesses, that discussion also includes serious consideration as to whether it’s practical, wise, or even possible to continue operations. Small businesses close even in the best of times, and 2020 was not the best of times.

So, what does that mean for freight broker agents then? As you’re looking back on 2020, and forward to 2021, it’s harder than usual to take a look at your business’s performance and get a firm grasp on your prospects.

Freight Industry in 2020

 

The freight industry has been on a roller coaster ride in 2020. Like many industries, we were almost at a standstill in the early part of the year. Trucks and drivers are naturally essential to our economy, but closed businesses don’t send or receive a lot of shipments. In April of 2020, a lot of the freight industry just stopped moving. Since then however, you may have seen that the industry has actually had unprecedented demand. Freightwaves did a great recap of 2020 in their look ahead to 2021.

In spite of 2020’s strong recovery in freight, there’s something very important to realize for freight brokers and freight broker agents. When there’s such a dramatic change in an industry, not every business is poised to capitalize on those changes. No matter how well this or any other industry recovered, remember that many businesses may have been left out of that increase. If you weren’t in a good position to ship medical supplies or cleaning supplies, many of those increased shipments never would have been available to you. Likewise, small businesses do best when they are able to handle a steady stream of transactions. If businesses dried up in April and then skyrocketed to more volume than you were able to handle, you likely still lost out.

All of this is to say one thing: if you had a rough year but heard the rest of the freight industry had massive volume, don’t lose hope. You may know freight brokers who had great years, some that had terrible years, and every possibility in between.  Wherever you fall in that spectrum, it’s going to be important to take the lessons you can and move forward, ready for new challenges and opportunities in 2021.

What to expect in 2021

 

We’ll start with a disclaimer: we have no idea what to expect in 2021 for the most part, and anyone who says otherwise is probably wrong. It does seem like we’re all expecting things to return to normal, or whatever the new normal will be, at some point in the second half of the year, however. So let’s think about what that would mean.

What would happen if, right now, every account you had suddenly behaved as if it was December of 2019. Certainly, that’s not what is going to happen, but it’s probably the closest approximation we have. There’s probably a lot of good things that would come out of that, but are there any problems? If those companies suddenly resumed their prior shipping habits, would you still be their first call? Would you be able to handle the sudden increase or decrease in volume or change in timing, mode, or lanes?

In September we reminded you to stay in touch, if possible, with your customers that were not shipping or not shipping as much during the pandemic. This is a good time to do that as well. See if you can get a handle on any changes they’d like to make to their shipping processes when things pick back up. On our blogs post, social media, and on The Broker Bros podcast, we’ll continue discussing our experiences and what we’re able to learn, but remember that no one knows your customers like you. Your product is yourself, your understanding of what their business needs, and your expertise in freight – keep offering the best mix of those three things.

If you have customers that are shipping more since the pandemic started, this may be a good time to start feeling out whether you’re part of their long term plans. Businesses that needed shipping support to deal with changing circumstances during the pandemic might plan on going back to how they did business before, but if you’ve shown your value, it’s a good time to remind them that you can help with their day-to-day business even after things calm down.

The Takeaway

 

Setting aside the strategic suggestions for a moment, the biggest thing for everyone to remember right now is that 2020 was unusual. However you did in 2020, personally and professionally, was probably affected in a very direct way by things that were beyond your control. While none of us know quite what to expect in 2021, we all expect the end of the pandemic and better days ahead. If your business is doing well right now, do your best to capitalize on that. If not, remember that there are big changes coming in the New Year. As always, LDI will be here to support freight broker agents in 2021.

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