Budget planning for RevOps 101

Budget planning and negotiation is an important element of revenue operations (RevOps) as without proper funding there’s not much you can implement to update processes.

No budget = no new software and no new hires.

And according to our latest research, 40.2% of RevOps teams have no budget allocation at their organization. To ensure your RevOps function is always funded check out our guide to budget planning and negotiation.

We cover:

The importance of budgeting for RevOps

Budgeting can involve a lot of maths and negotiation - and can be even trickier for non-revenue generating functions. And although RevOps work with revenue-generating functions like sales and marketing, it’s typically not considered revenue-generating in its own right.

This means convincing stakeholders and decision-makers to invest in the RevOps budget might take more work. But without budget allocations improving processes and investing in new tech solutions is near impossible.

The budget for your RevOps strategy is also important as you’re hoping to create a ROI for the business, you’re focused on revenue growth after all.

If your spending is unnecessarily high then it may be difficult to create that return. And as your friends in finance might say, spending eats into profits.

“My biggest internal pain point right now is lack of resources.

“If you don't do a good job of mapping out the resources needed to achieve that nirvana state, then oftentimes, you are the last person to get budget.”

-Greg Larsen, VP Revenue Operations at Eltropy

Keeping to your budget allows you to retain your ROI and will hopefully keep you in the CFO's good books. Plus if you deliver great results, you might just get that budget increase next year!

Handling your RevOps budget

With the importance of budgeting in mind, how can you manage your RevOps budget and advocate for your functions needs, to create a successful revenue operations strategy that sticks to your budget? Keep reading to find out.

Prioritize

While you may start the negotiation process with a long wishlist of your ideal tech stack additions, hiring plans, and more, the likelihood is that you’ll negotiate down to the basics. To know what the basics are, you must prioritize ahead of any budget meetings.

Splitting your wishlist into urgent, maybe, and nice to have will allow you to fight for the key priorities for your budget while understanding what you might need to drop to gain approval on your plan.

Urgent problems are key priorities for the business and the RevOps team that don’t currently have a solution. The maybe section is for issues that have a solution, but this could be improved with new software. And nice to haves are things that would be beneficial, but aren’t a priority right now.

So to structure your pitch, think about: What issues are a priority just now? How would solving this problem save money long-term? What is the solution to this problem? Is there a better alternative?

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Did you know that 81.6% of revenue operations professionals said their budget is mostly spent on software?

Cost and opportunity

To justify your spending to stakeholders and executives you’ll need to convince them that it’s worth it - and will result in a greater return! But this isn’t as simple as just finding the cheapest solution to the problem.

Many factors will increase the cost of implementing a new system such as:

Time to set up the new software
Time and cost of training staff
Other resources to run the tool (e.g. an admin, integrations)

All of these factors may mean your new solution isn’t so cost-effective anymore! 😅

But don’t worry - understanding the benefits of the new solution may just save your plans. To calculate this, estimate the cost of the problem not being solved (you can use the average time for tasks and average salaries to make this easier).

Then estimate how much time (and money) the new solution will save your company - if this is more than the cost of implementing the system, you might be on to a winner!

Communicating your plan

To effectively communicate your plan to key stakeholders, ensure you’ve done your research and present your learnings confidently. Those deciding on your budget want to know you’ve done your due diligence. So, present those numbers we worked out earlier and compare a few solutions to back up your recommendations.

It may also be helpful to understand what objections are likely to come up and prepare your counterargument ahead of time. This will help you to stay confident in your pitch and ensure questions don’t throw you off track.

But beware that a curve ball may still be thrown your way - take your time to carefully consider this point and formulate a confident response.

Some tips for presenting confidently in a budget meeting are:

If sitting, take up space - sit up tall and move your elbows away from your body.
If standing, separate your feet and center your weight in the lower half of your body - this helps you appear more confident and solid.
Steeple your hands when you are making a point - this is a sign of confidence and it shows your audience you hold expertise. Use this both during in-person and online meetings.

Handling cross-departmental budgeting

In addition to managing your own budget, RevOps teams may also play a role in handling budgets across revenue-generating functions: sales, marketing, and customer success.

So how do you tackle this complex issue and balance differing stakeholder needs?

Aligning teams

Aligning the revenue-generating functions can allow budgeting conversations to go more smoothly. Why? Because budget proposals that align with the organization’s goals will be more likely to receive funds; aligned teams should naturally be pulling together towards those revenue goals.

This may save some awkward conversations where it seems like you’re backing one department over another. 😬

Sorting requests

Priority should be given to proposals that align with business objectives, utilize the budget, and are backed by the data.

This last point is key. The difference between a mission-critical proposal and a nice-to-have proposal is the data behind it. As we mentioned before, a strong case relies on providing information on the cost of the solution and the cost of inaction, allowing the benefits to speak for themselves.

Look for the specifics of the data such as the percentage increase in conversion rate or hours saved to determine the importance of the change.

Communicating the plan

Sometimes you’ll need to say no. And while in most cases no is a complete sentence, it is useful to give your team feedback on the decision when you aren’t providing them the funding they requested.

This feedback may include details as to why their idea isn’t feasible or how they could improve their proposal for next time. You might have information that they didn’t have about the business's priorities - ensure they understand why their funding request was denied.

But remember to say no with care. Your reps have spent time preparing their business case and may be disappointed by the rejection. Communicating clearly and with care is key to a good working relationship.

Actioning the plan

Now that the budget plan is complete, it’s time to action the plan. Numbers on a sheet mean nothing if teams end up overspending anyway.

Sales, marketing, and customer success teams must feel empowered and supported with their resource allocation and understand how to use those resources to their fullest potential.

Not every team will get exactly what they want but it’s important to offer support to those teams and motivate them to achieve the action points from the plan. Ultimately, it’s the team’s actions that generate revenue growth not necessarily the resources they have access to.

Final thoughts

While budgeting can be a touchy subject in some organizations, it’s crucial to your RevOps strategy. Negotiating the best budget for your function and dividing resources between sales, marketing, and customer success can be challenging - but hopefully, you now feel more confident with the topic.

Looking to discuss budget planning and negotiation with other RevOps professionals? Join our Slack community!👇