Clevenue's Free Sales Quota Calculator Template
Sales quotas are wildly wrong for many companies, with sales attainment through the floor historically, and it's primarily due to how they are being derived and calculated. When a quota is seen a cause of revenue, rather than a record of the end effect, you end up creating targets based on what you hope to achieve, not what is possible to achieve.
What we mean by this is that sales quotas should carry a path to target, based on the capacity that sales reps have to create and handle opportunities. This capacity is dependent on the whole responsibilities of their role, and the current business performance across average deal sizes, sales cycle lengths and average sales conversion rates.
We've already broken down the real math of sales capacity in our guide on capacity planning, and you can jump straight to the maths behind the spreadsheet by clicking here.
On top of the sales quota calculation, there's a sales pay calculator also - You can use this to calculate a fair basic/bonus ratio that is calculated from the sales quota, using Quota:OTE ratios that are industry standards for SaaS.
This calculator is really easy to use, and we even format the output as a formula so that you can understand how it's derived. Using it is simple:
Just make your copy in Google Sheets or download it to Microsoft Excel, add in your opportunities and go!
Using the template
1. Configure the deal cycles
Sales capacity starts off with how many sales cycles you can accomplish annually - The shorter the sales cycle the more opportunities you can handle from start to finish in any given year.
Calculating it is as simple as entering how many working weeks a rep has in a year, and the average sales cycle length in days.
The working weeks are essentially 52 weeks of the year, less any days out due to holiday, and your sales cycle is the length of time in days that it takes for an opportunity to go from creation to closed won.
2. Calculate deal capacity per cycle
Now that you know how many deal cycles can be accomplished in a year, you need to understand how many deals can be handled in each cycle. This requires a little more data than the previous step, and this is where you can see the big impacts of role responsibilities.
Put in the total working hours per week, and make sure to exclude time for lunch - This is the physical number of hours that each rep has that they can sell (do not include out of hours work here).
Add in how many hours out of that time budget go towards recurring meetings - These could be team stand ups, 1:1 meetings with management or pipeline reviews, they all take away from the time that the rep has available to sell.
Then add in the time weekly that is expected for the rep to be prospecting for (You can calculate this using our sales prospecting calculator) and is often an area that has recently been given more to AEs, on to of receiving increased quotas.
Finally you enter in the number of hours that is required for managing each of the opportunities in pipeline. This is the amount of time per week per opportunity that is dedicated to meetings, follow up, administration, proposal building etc.
Once you have all of this, you have a figure for how many opportunities a rep can handle per year.
3. Converting opps to sale quota
Now that you have the annual volume of pipeline opportunities that your sales reps can handle, you now need to convert that figure into actual money. This is done by understanding how many of those opportunities will convert into customers and at what ACV.
To do this, you simply input the average opportunity conversion rate (to closed won) for your rep and the average deal size.
4. Sales Quota Calculation Summary
This then converts into the overall formula, which is presented as the full formula (so that you an easily explain and present it to others.)
From here, you can play with the calculator to understand what the effect would be on enablement initiatives designed to make the sales process easier, or free up selling time. This could be measures like using presales to reduce the sales complexity which in turn would reduce the amount of time spent on each deal, or simpler initiatives like cutting wasteful meetings
5. Sales Pay & Quota:OTE Calculation
Finally, you can convert this quota into a salary, bonus & OTE figure, with benchmarks around industry average Quota:OTE ratios for you to effectively build out commission plan. This can be used in combination with our Sales Commission Calculator to build complete sales quota and commission plans.
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