Do you know the number of leads you need to generate to reach your income goals? While this may seem like an easy question, not a lot of people can come up with the number.

There are two factors to take into consideration.  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. 

Second, you need to know how well you are able to turn your prospects into sales (conversion rate).  If you are successful at lead conversion, you will see a significant improvement to your bottom line. 

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

The first step is to determine your monthly sales goal. For our purposes, let’s use $100,000 as your monthly sales goal.

Next, you need to calculate your current conversion rates. In order to keep this example easy, suppose that all of your leads come from your website. 

Suppose you convert 2 and a half out of 1000 visitors into paying customers. 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

So, if you want $100,000 in sales and your average sale price is $20, with a conversion rate of .25%, the formula would look like this:

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

Yikes!  That’s a lot of visitors!  Luckily, there are a few adjustments you can make.  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. It is very possible to increase to ablut 2% from an original .25% rate.

Look at how that will affect the calculation:

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

That’s a nice 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. 

If you are like most, you would rather make smart changes to improve your sales success rather than work 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.

About Ryan Perry

Ryan Perry has taken his 10+ years of business ownership and hands-on marketing skills and focused them on online marketing. In April of 2009, he started Simple Biz Support with an emphasis on Search Engine Optimization (SEO). Ryan is propelling local business websites to the top of Google, Yahoo and Bing resulting in increased market exposure and revenue for his clients using a variety of internet marketing tools including blogs, article submissions and video. Additionally, Ryan speaks and vlogs (video blogs) about internet marketing, educating business owners how to effectively use various SEO tools and techniques to promote their business on the internet. Ryan currently resides in Santa Rosa, CA. Connect with Ryan on Google+