What is a Revenue Target?

Definition

A revenue target is a specific, measurable financial goal for the total income a company, department, or individual is expected to generate over a defined period (e.g., monthly, quarterly, or annually). Unlike a sales quota, which is often assigned to individual salespeople and may be based on units or contract value, a revenue target is the high-level financial objective (the « top line » number) that the entire business or a business unit is aiming to achieve.

Examples

• Company-Wide: A SaaS startup sets a company-wide revenue target of achieving $10 million in Annual Recurring Revenue (ARR) by the end of the fiscal year.
• By Department: The marketing department is given a revenue target to « source $1.5 million in new pipeline » that contributes to the overall sales goal.
• By Region: The North American sales team has a quarterly revenue target of $2 million, which is the sum of all their individual sales quotas.
• Go-To-Market Team as a Service: A client hires an external team with the specific revenue target of generating $500,000 in new business from a new market segment within 12 months.

Advantages/Benefits

• Clear Business Alignment: Provides a single, clear financial goal that aligns all departments (marketing, sales, product) toward a common objective.
• Strategic Planning: Forms the basis for all strategic planning, including budgeting, resource allocation, and hiring.
• Performance Measurement: Acts as the ultimate benchmark for measuring the overall success and financial health of the business.
• Drives Growth: Creates a clear goal for the entire organization to strive for, motivating teams to grow and scale their operations.

Related terms

• Sales Quota
• Sales Forecasting
• ARR (Annual Recurring Revenue)
• MRR (Monthly Recurring Revenue)
• Business Goal
• Financial Planning