Reverse-Engineer Your Revenue
When I ask business owners about their growth plans, pretty much all of them say they want to be bigger by the end of the year.
No surprise there—who doesn’t want a bigger business?
But the moment I ask, “Exactly how big?” it starts getting fuzzy. And if I press further—“What’s it going to take to make that happen?”—the answers get downright murky.
That’s exactly where reverse-engineering your goal solves the mystery—by taking the guesswork out of growth.
Today, I want to fix that by giving you:
The single most important principle for setting effective sales goals and KPIs.
Walk you through an example so you can see how it works.
Map out the day-to-day activity that’ll actually get you there.
Let’s go.
The Big Idea: Work Backwards From a Crystal Clear Target
Think of your sales goal like plugging a destination into a map app.
Sure, typing in “Texas” might get you somewhere in that giant state—but it’s a far cry from entering a precise street address.
The clearer and more exact your destination is, the better your odds of actually arriving.
But knowing where you want to end up is just the first step. You also need a turn-by-turn route to get there.
Working backwards means starting with your end goal and tracing every step, in reverse, back to where you are right now. That way, each milestone is clear, logical, and measurable.
To work backwards, you need to:
Start with the end point: Define a specific, measurable target—like $42,000 in new monthly recurring revenue.
Reverse-engineer each milestone: Once you know your final destination, break down every step required to reach it: How many deals? How many proposals per deal? How many calls per proposal?
Create a step-by-step roadmap: By going from “goal” to “deals” to “calls,” you transform a lofty aim into a practical action plan—just like following instructions on your GPS.
When you do this, you’re essentially turning your big vision into smaller, logical steps. It’s the difference between hoping you’ll find your way and actually having a route that’s spelled out and easy to follow.
Let’s do that in an actual example now.
Step 1: Define Your Exact Annual Target
Pick the number you want to see on your revenue report when December rolls around. It might be a monthly recurring revenue figure or total new revenue. The key is that it’s precise, so there’s no wiggle room or ambiguity.
Example: “I want an additional $42k/month in MRR by December 31st.”
Step 2: Translate It into Deals
Now we want to determine how many actual deals need to be sold to hit that number.
For this, you’ll need to know your average monthly revenue per client or the average size of a typical sale. If you’re not sure, get a rough estimate by simply taking last year’s total revenue by last year’s total number of customers.
Example: If each new client is worth about $3,500/month, that means you’ll need 12 new clients to reach $42k in new MRR.
Pro Tip: If you expect churn or lost accounts, factor that in so you’re aiming for net-new revenue, not just gross.
Step 3: Determine Your Proposal Count
In a perfect world, every pitch would turn into a sale, but even the best closers don’t bat 1.000. That’s why you need to figure out exactly how many proposals (or presentations) it takes to land your target number of deals.
Simply apply your historical close rate: multiply your deal goal by the inverse of that rate, and you’ll see how many proposals you need.
Example: A 50% close rate means you’ll need 24 proposals in total to secure those 12 deals.
Step 4: Calculate Your Discovery Calls
Continuing the backward logic, suppose you conduct a discovery call before moving to the proposal stage. You’d next calculate how many discovery calls it’ll take to reach that proposal target by using your historical discovery-to-proposal ratio.
In other words, if you know roughly what fraction of your discovery calls lead to a proposal, just divide your needed proposal count by that ratio.
Example: If 50% of your discovery calls lead to proposals, you’ll need 48 discovery calls to generate 24 proposals.
Step 5: Identify the Earliest Conversation
Finally, apply this same logic back to the first step in your sales process.
Maybe it’s a quick 15-minute qualifying call. If you know the percentage that move on to discovery calls, plug that in. If not, estimate what percentage of qualifying calls lead to the discovery call.
Example: If 50% of your 15-minute qualifiers turn into full discoveries, you’ll need 96 qualifying calls to schedule those 48 discovery calls.
By the time you’re done, you’ll have a clear roadmap showing exactly how many touchpoints—qualifying calls, discoveries, demos, or proposals—you need each month to stay on track.
You might find the volume is higher than you expected or realize it’s totally doable. Either way, clarity is the goal.
Mapping This Onto Your Unique Process
Now that you’ve established what you need to see in your sales pipeline to hit your target—how many deals you need and how many qualifying calls, proposals, and so on—it’s time to map those numbers onto your specific prospecting or marketing activities that’ll be necessary to make it happen.
The exact metrics you track will depend on how you generate leads:
Paid Ads: You might measure impressions → clicks → opt-ins → booked calls.
Outbound on LinkedIn: You might focus on connection requests → accepted connections → messages sent → positive replies → scheduled calls.
The key is to identify the major conversion points in your funnel—the steps that move a prospect from complete stranger to qualified lead.
Once you know those conversion rates, you can keep working backward until you see exactly how much top-of-funnel activity you need.
Here’s how.
Our Example: Direct Mail + Call Setter
To make this concrete, let’s say you’re an IT company sending out direct-mail pieces, followed by a sales setter who calls to book qualifying appointments.
We already know we need 96 qualifying calls this year to hit the revenue target from the example above.
So, let’s break it down:
Number of Pitches Required
Ask, “How many decision-makers do we need to pitch to book 96 qualifying calls?”
If 15% of the decision-makers we pitch end up scheduling a call, then 96 ÷ 0.15 = 640 pitches.
Live Calls Needed
Then you’d ask, “How many calls need to be answered in order to pitch 640 people?”
If 25% of all answered calls lead us to the decision-maker, then 640 ÷ 0.25 = 2,560 live answered calls.
Total Leads Required
Now ask, “How many leads does the sales setter need to call to get 2,560 live calls answered?”
If 25% of our leads typically pick up, 2,560 ÷ 0.25 = 10,240 leads.
That’s the magic number—10,240 leads in your campaign—so you can reach 2,560 live calls, pitch 640 decision-makers, and book 96 appointments.
Troubleshooting Made Easy
The best part about working backwards like this?
You now have a paper trail of every step. If you’re behind on your target at any point, look at each conversion rate to see where the wheels might be coming off:
Is the pitch-to-qualifying-call percentage lower than 15%?
Are fewer calls getting answered than expected?
Do you need to tweak your scripts, refine your direct mail piece, or adjust your targeting?
Are qualifying and discovery calls not leading to proposals?
Or are your proposals not leading to the number of yes’s you need?
By zeroing in on the exact stage that’s slipping, you can make quicker fixes instead of guessing.
Bringing It All Together
With this level of specificity, you’re not just hoping for growth—you’re laying out a roadmap to make it happen.
Whether you’re relying on paid ads, cold calling, or social media, the math works the same way: set your target, define your conversion steps, estimate realistic percentages, and work backward until you know exactly how many leads or prospects you need at the top.
If you build your plan and want feedback on it?
Send it to me by hitting reply and I’ll give laser-focused feedback to the first 25 I see, so you can course-correct faster and reach your goals. If it makes sense, we can hop on a call to dig in a bit more if helpful, too.
Hope this helps!
Hasta la vista,
Ray
