| Practically all decisions in business have a numerical | | | | or complex geometrical calculations can be performed |
| element to them. The most obvious example is the | | | | in a split second,thereby saving time and of course |
| ubiquitous Business Plan; but far too many people think | | | | money. |
| that the important bit is the words at the front rather | | | | For sales managers there are three important |
| than the numbers at the back. But make no mistake, | | | | applications for which Excel is the tool of choice. Firstly |
| anyone who is going to back a business turns straight | | | | the thorny problem of setting quotas and paying |
| to the numbers section to see where and how much | | | | commissions. Most sales managers have a rule of |
| money is going to be made. | | | | thumb about how much they expect to pay. This will |
| Now unless you are a genius, it is pretty unlikely that | | | | be based very much on the industry norms, the length |
| you will get the numbers right first time. After all you | | | | of the sales cycle and the expertise needed by the |
| will have to consider all sorts of contingencies; for | | | | salesperson. By inserting these variables into an Excel |
| example variations in rent, salaries and cost prices. | | | | spreadsheet the sales manager can calculate the |
| You may have different sales projections depending | | | | optimum sales goals, what the On Target Earnings |
| on your price point and you may have to allow for | | | | (OTE)should be and where accelerators and prizes |
| different interest rates or fees depending on the | | | | should kick in to get the best performance.He can also |
| amount of money you borrow or commit to the | | | | model the optimum salary and commission package |
| business. If you are trading globally you may have to | | | | for a salesperson. |
| consider fluctuations in exchange rate and factor in | | | | For most businesses, salespeople need to return |
| different transportation costs. | | | | between three and four times their own cost. |
| A spreadsheet allows you to put in all the variables | | | | However the calculation becomes complicated when |
| and keep adjusting them so that you can see the | | | | there are variable price points, margins and |
| effect of any given change instantly. By adjusting the | | | | accelerators in place. Using his Excel spreadsheet, the |
| variables you will eventually arrive at an outcome | | | | manager can model the situation very closely and |
| which looks both realistic and believable and this can | | | | make an informed decision on the maximum salary he |
| then be inserted into the business plan as a forecast. | | | | can pay, how much commission should be available |
| Later on, this forecast performance can be compared | | | | and the real cost of hidden costs like car, fuel and |
| to the ultimate outcome; and this in turn can then be | | | | support costs. |
| used to make ongoing decisions about how the | | | | The second tool he should be using is a spreadsheet |
| business is run. | | | | to monitor and control performance against target. By |
| A Spreadsheet is far more than a simple adding | | | | breaking down sales objectives and comparing actual |
| machine though. Excel in particular has a rich collection | | | | performance he will quickly see if he is going to |
| of formulas which allow you to manipulate data in | | | | undershoot target which will then give him time to take |
| some remarkably sophisticated ways. This in turn | | | | remedial action before it is too late. |
| allows you to model scenarios to a surprising degree | | | | There are of course, any number of sales software |
| of complexity. And if you design your sheet properly | | | | packages that do this simple job. But Excel is widely |
| you can put all the variables in one corner of the sheet | | | | available, very easy to customize, easily |
| with the key benchmark indicators next to them. It is | | | | interchangeable wit other managers and very flexible. |
| then just a simple matter to adjust one variable and | | | | With proper training any manager should be able to |
| see instantly how it affects the outcome. | | | | construct a sales forecast spreadsheet in a very short |
| Excel is the ultimate tool for this kind of 'what if' | | | | space of time. He can then not only keep an eye on |
| modelling. By properly constructing his spreadsheet, the | | | | progress but circulate helpful informative charts to his |
| entrepreneur can test assumptions and try out options | | | | team keeping them updated on progress. |
| to find the optimum strategy. The other huge | | | | The final tool that should be in every sales manager's |
| advantage of Excel is that it allows you to take your | | | | tool kit is a pipeline calculator. This allows him to |
| data and present it in graphical form, literally at the | | | | measure and monitor customer progress and |
| touch of a button. | | | | identifywhere further sales effort is needed to close a |
| Unless you are an accountant, rows of figures are | | | | deal. Many mangers combine this function with the |
| likely to be unimpressive and quite possibly | | | | forecaster, but while they are linked they are still |
| incomprehensible. But nearly everyone can appreciate | | | | separate and distinct. The forecaster is about internal |
| the information conveyed by a chart or diagram. Excel | | | | performance against target while thepipeline is about |
| automatically integrates with other products so that by | | | | customer facing sales performance. |
| updating the figures in your Excel spreadsheet you | | | | Many people use Excel as a glorified, on screen |
| can automatically revise the charts embedded in say a | | | | calculator; but to do so is to ignore the huge time |
| linked report. | | | | savings and vastly improved decision making that this |
| Excel's impressive range of formulas mean that | | | | wonderful tool can provide. |
| complex calculations involving the time value of money | | | | |