Set Sales Quotas The Right Way

We need ~$2M this year. So rep quota is ~$800K. Hire 3 AEs. Done.

This is how most founders set quotas.

It looks clean in a spreadsheet. Until no one hits numbers and it’s already Q3.

Why does this approach hardly ever work?

Because quota doesn’t start with revenue. It starts with time.

Reps give you 12 work hours in a day (if you set the right culture).

But that’s not 12 hours of selling. It’s Slack. Prep. Demos. Follow-ups. Logging notes. Bathroom breaks. Trainings. Internal meetings. Catch ups. Etc.

They maybe get five to eight solid calls in consistently before quality drops.

Now factor in your ACV.

Say it’s $10K. To hit $800K, a rep needs to close 80 deals a year. At a 10% close rate, that means 800 new first calls a year / 16 a week / 3 to 4 a day.

After that first meeting, most deals need a discovery call. Then a demo. ROI review. Procurement. Security.

Often, deals take five or six steps. Every one of them eats time.

How realistic is it that reps can do 4 new calls a day while also doing follow ups, outbound, hygiene work, stay on top of internal priorities, etc. without burning out?

To get to realistic quotas and see if your math adds up, start with hours. Add conversion. Layer in deal size. Then ask: does the math leave room to breathe?

And if you want to be sure, go test it.

Fill a calendar with real calls. Count the follow-ups you skip. Watch how quickly your energy drains.

If you can’t keep up, your reps won’t either.

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Enjoyed reading this?

Then check out my conversation about this on the focal podcast with Russ Thau, a seasoned sales leader who helped scale Intercom, Box, and Envoy through every stage of growth plus has advised and worked with companies such as Airtable and LaunchDarkly since they were sub $1M in ARR.

Youtube | Apple Podcast | Spotify

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