Selling Microsoft

Planning for Profit and Growth

A successful plan should describe where you want your business to go, so you can spend time working <i>on </i>the business, not just <i>in </i>the business.

In the past eight years of consulting with Microsoft partners of all sizes, focus areas and experience, I have found a common denominator among those that are growing and profitable. They have a vision for their business and a process for developing a business plan that allows them to execute effectively and measure progress.

Many partners create a budget for their company, but they fail to create a functional business, operating and sales/marketing plan. No matter whether your firm focuses on customer relationship management (CRM) or SharePoint, Biztalk, .NET, security or Microsoft Business Solutions, and no matter whether you have a two- or 20-person sales team, it's critical for profitable growth to develop a plan that describes where you want the business to go. The idea is to spend some time working on the business, not just in the business.

A successful plan should incorporate at least these four fundamental elements:

1: Define Business and Personal Goals
This, in essence, is your vision for you and your business. Frequently, goals focus solely on financial metrics, but you must also develop a set of personal or philosophical beliefs to help you increase overall organizational performance. These beliefs may be based on the type of culture you want to foster within your team, or employee participation and client satisfaction levels. These business metrics and personal vision become the basis for your tactical sales plans.

The key issue at this step is to be focused on outcomes. Examples include revenue growth, margin levels, partner recognition, customer satisfaction levels, pre-tax margin percentages, number of net new clients per quarter and account penetration goals.

2: Evaluate the Business Environment
Identify the key business drivers that increase revenue and reduce expenses. Consider market opportunity, the capabilities required to achieve your organization's goals, current and future Microsoft product offerings, and your current and desired market position.

The element of market opportunity is critical for setting your sales objectives. For each product area in which you focus, you need to make the following calculations:

  1. Estimate the total number of potential buyers in the marketplace.
  2. Determine the total percentage of ideal buyers per year from No 1.
  3. Estimate the average order size per transaction.
  4. Determine the percentage of sales opportunities you will participate in per year.
  5. Determine the Win/Loss percentage of your sales opportunities.

These figures will give you the data you need to build a reasonably accurate sales plan for each practice. Estimate your total costs to determine your ROI.

Prior to adding a new product offering, or even if you are already active in a specific Microsoft practice, call potential customers in the market and ask a series of questions to validate your assumptions.

3: Involve Your Management and Sales Team
Ask your business management and sales teams questions including:

  • What went well—and not so well—in the past year?
  • What are the key business assumptions for this year?
  • What are the four key metrics to be used to measure success in each department?
  • What are the business opportunities for success?

The goal of this step is to assess your chance of success, identify key success factors and, most importantly, build commitment among your management and sales team to achieve your business vision.

4: Validate Your Assumptions
As you develop your plan, you need to be realistic. Validate your assumptions by factoring in criteria including: the economic realities or vertical trends within your geographic area, Microsoft marketing efforts, the competitors' position within your market, your ability to differentiate your offering and create unique value, and your internal company resources required for success, including people, capital and so on.

In developing your business plan, it is critical that you define, measure and list all ingredients in the proper sequence of preparation and execution. Each quarter, you should re-assess your execution and assumptions to ensure your plan still has you on a course that will take you to profitability and growth.

About the Author

Ken Thoreson is managing director of the Acumen Management Group Ltd., a North American consulting organization focused on improving sales management functions within growing and transitional organizations. You can reach him at [email protected].