Business is ultimately about results, and more often than not, those numbers boil down to revenue. Whether you’re a solo consultant, a team of five, or leading a 50-strong enterprise, revenue is the lifeblood that keeps your business moving forward. It fuels growth, enables employment, and opens doors to opportunity.
But revenue doesn’t happen by accident. It’s not a ‘fingers crossed’ affair or something that magically appears when you post to social media.
Revenue is the result of clear, measurable action. And at the heart of that action is one thing many business owners shy away from: sales.
Let’s be absolutely clear here: sales is not a dirty word. In fact, it’s one of the most essential components of any successful business. Sales generate the cash flow that pays the bills. Sales keep the lights on, and set the foundation for long-term growth. And for those who find themselves uncomfortable with the concept, I like to remind them: sales is just a conversation – one that connects your solution to someone’s problem.
But to consistently drive sales and build sustainable revenue, you need to know your numbers. And that’s where the ratios come in.
The Two Numbers That Matter Most
When it comes to sales, there are two key numbers every business owner must understand:
- The number of contacts it takes to make one sale.
- The number of sales required to hit your revenue target.
These two metrics form the foundation of your business development strategy. They aren’t just numbers for a spreadsheet. They’re indicators of your effectiveness and your clarity of process.
Let’s break this down with a real-world example.
Understanding the Contact-to-Sale Ratio
Let’s say, through your data or observation, you determine that on average, it takes 12 contacts to make one sale. These contacts could be a mix of calls, emails, follow-ups, social media messages, or in-person conversations. The point is, it’s your average input needed before a client says “yes”.
Now, suppose you want to make 100 sales. Based on your 12:1 ratio, you now know you’ll need to make 1200 contacts to achieve that.
And let’s take it a step further. If each sale is worth $1000, then 100 sales gets you $100,000 in revenue. That means 1200 contacts = $100,000. Now we’re speaking in terms that truly matter to your business’ sustainability.
Knowing this, you can reverse-engineer your activity:
- How many contacts do you need to make per day to stay on target?
- Do you have the systems in place to manage this volume?
- Is your messaging and value proposition strong enough to maintain or improve the ratio?
Sales is Just a Numbers Game (But a Strategic One)
Understanding and monitoring your sales ratio removes the guesswork. It gives you control over your outcomes, because now you’re not relying on hope, you’re working with intention.
And if your numbers aren’t stacking up? It’s an invitation to investigate:
- Is your offer clearly aligned with your market’s needs?
- Are you speaking to the right people?
- Is your follow-up consistent and value-driven?
- Is your customer journey smooth from first contact to conversion?
Sales ratios also help with forecasting and resource planning. If you know how many contacts are needed per sale, and how many sales you need to meet your goals, then you can determine whether you need to hire a new team member, invest in automation, or simply become more efficient in your outreach.
The Simple Sums Every Business Should Regularly Run
Here’s a simple formula you can use in your own business:
- Revenue Target ÷ Average Sale = Number of Sales Required
- Number of Sales x Contact-to-Sale Ratio = Total Contacts Needed
From there, divide your total contacts by your available working days or weeks to know exactly how much outreach activity you need to schedule.
Too many business owners shy away from this level of analysis, but clarity breeds confidence. When you know your numbers, you can lead your business with purpose, not panic.
Time to Check Your Numbers
If you’re not already tracking your sales metrics, now’s the time to start. These numbers are not just for sales managers or marketing teams, they’re for you, the business owner.
Because whether you’re looking to increase revenue, expand your team, or simply have more breathing space in your schedule, it all starts with sales.
And sales start with contact.
Let’s take the emotion out of selling and replace it with structure. When you treat sales as a conversation underpinned by clear numbers, you empower your business to grow with intention.
