What is the number of leads you will need to earn the income you want this year? This may seem like a simple question, but I haven’t found a lot of folks that have the answer.

There are two things to consider regarding this question.  The first is your costs.  You should make sure to have an online accounting program advanced enough to help you analyze your costs and how they relate to your profitability. 

The next factor to take into consideration is how successful you are at converting sales from your leads (conversion rate).  The better you can convert your leads, the more profitability you are capable of achieving. 

Let’s take a look at the process more closely:

First you need to settle on a sales goal for each month. For our purposes, let’s use $100,000 as your monthly sales goal.

Now you need to figure out your conversion rate. Let’s suppose that all of your leads are generated through you website in order to keep this example simple. 

Assume that you are able to convert 2.5 visitors into sales for every 1000 visitors to your website. Your conversion rate is .25%.

This is the calculation you can use to determine how many visitors you will need to your website to meet your income goals.  To keep it easy, suppose that each conversion will ultimately result in a sale.

(Desired Sales / Sale Price / Conversion Rate) X 100

The formula would look like this, if you want to achieve $100,000 a month in sales, you have a conversion rate of .25% and your average sales price is $20:

($100,000 / $20 / .25) X 100 = 2,000,000 visitors needed per month to achieve your sales goal.

Ouch!  That is a lot of visitation!  Now, there are a few things you can do to change things.  The average price can increase. You can change your visitation, or you can change your conversion rate.

For most people, the best place to start is conversion rate. If you test a bit, it’s actually quite easy to bring a .25% conversion rate into the 1.5% or even 2% range.

Take a look at the difference that makes to the number of visitors you need to achieve your goals:

($100,000 / $20 / 2) X 100 = 250,000 visitors per month to achieve your sales goal.

I could live with that change! 

If you want to decrease the number of visitors you need even more, try increasing average sales to $47:

($100,000 / $47 / 2) X 100 = 106,383 visitors per month to achieve your sales goal. 

Everyone would rather work smarter than harder.  Hopefully these examples drive home the importance of planning the leads you will need to reach your sales goals, and testing the factors you can change to become more efficient. 

Get more small business success strategies and claim your free white paper: “7 Ways Your Stone-Age Accounting System is Stealing Money From You Every Day … And, How to Get it Back This Year”  to learn about an online accounting program that makes it simple to track your conversion rates.