Annual Planning
The process producing the operating plan: target setting, capacity modelling, territory and quota design, and budget allocation.
The sequence that works
Target, then capacity required to hit it, then territories that contain that potential, then quotas derived from territory potential, then compensation. Reversing any step — starting from headcount, or dividing the target by heads — produces quotas unrelated to what a patch can yield.
The timing trap
RELATED TERMS
Capacity Planning
Translating a revenue target into the number of productive selling resources required to hit it, accounting for ramp, attrition and expected attainment.
Territory Design
Dividing accounts among sellers so each has a patch with enough potential to support a quota, and so coverage is neither duplicated nor absent.
Annual Operating Plan (AOP)
The agreed financial and operational plan for the year: targets, headcount, spend and the assumptions connecting them.
Quota
The revenue target assigned to an individual rep for a period. The most consequential number in a seller's working life, and the mechanism translating a company target into individual accountability.
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