Blog · Territory, capacity and quota planning
The complete territory potential and quota calculation on four territories, small enough to check by hand: current revenue per territory, the gap at norm across its current accounts, the universe accounts not buying valued at the segment norm and discounted by a stated realisation factor, potential per territory, the share of potential that reaches the company target, the quota per territory, the balance check, and the identity that quotas sum to the target, so a reader can reproduce every figure and then run it on their own ledger and universe file.
Territory potential is three sums per territory and a share, and on four territories it can be checked by hand. This page works it: current revenue, the gap at norm, the discounted universe, potential, the share, the quotas, the balance check and the identity.
| Item | Value |
|---|---|
| Company target | $14.0m |
| Segment norm, full relationship | $180,000 per account |
| Realisation factor, universe accounts | 30% |
| Balance tolerance | Largest ÷ smallest ≤ 2.0 |
| Territory | Current accounts | Current revenue | Σ gap at norm on current accounts | Universe accounts not buying | Universe at norm × 30% | Potential |
|---|---|---|---|---|---|---|
| A: mature | 90 | $4.0m | $0.6m | 12 | 12 × 180,000 × 0.3 = $0.65m | $5.25m |
| B: growth | 40 | $4.0m | $2.1m | 210 | 210 × 180,000 × 0.3 = $11.34m | $17.44m |
| C: new hire | 30 | $1.5m | $1.4m | 80 | 80 × 180,000 × 0.3 = $4.32m | $7.22m |
| D: steady | 55 | $3.0m | $0.9m | 45 | 45 × 180,000 × 0.3 = $2.43m | $6.33m |
| Total | 215 | $12.5m | $5.0m | 347 | $18.74m | $36.24m |
Gap at norm per territory is the sum over its current accounts of max(0, norm − revenue); the totals are given per territory here.
Share = target ÷ total potential = 14.0 ÷ 36.24 = 38.6%
| Territory | Potential | Quota at 38.6% |
|---|---|---|
| A | $5.25m | $2.03m |
| B | $17.44m | $6.73m |
| C | $7.22m | $2.79m |
| D | $6.33m | $2.44m |
| Total | $36.24m | $14.0m |
Quotas sum to the target by construction.
Largest ÷ smallest = 17.44 ÷ 5.25 = 3.3, over the tolerance of 2.0
Fails. Territory B is three times territory A in potential. Before quotas are issued, the map moves accounts: sixty of B's universe accounts to A.
| Territory | Potential after | Quota at the new share (14.0 ÷ 36.24 unchanged) |
|---|---|---|
| A | 5.25 + 60 × 180,000 × 0.3 = $8.49m | $3.28m |
| B | 17.44 − 3.24 = $14.20m | $5.48m |
| C | $7.22m | $2.79m |
| D | $6.33m | $2.44m |
| Ratio | 14.20 ÷ 6.33 = 2.2 | Closer; one more move needed |
Total potential unchanged; the share unchanged; the quotas still sum to $14.0m. A second move of ten current accounts from B to D brings the ratio under two.
Σ quotas = $14.0m = target, before and after every move Σ current revenue = $12.5m = ledger for these territories every account, current or universe, in exactly one territory
Quota by last year's revenue. A and B both at $4.0m get the same quota; B has three times the room.
Universe undiscounted. B's potential reads $41.9m and its quota $8.7m; the rep cannot reach it.
Balance unchecked. B's rep carries a third of the company; A's rep is under-loaded by half.
Moves without updating the share. Quotas no longer sum to the target.
The same three sums per territory with per-cell norms and per-account gaps, the same share, the same checks. Covirage runs it on the ledger, the customer master and the universe file every plan cycle. The territory potential guide covers the measure, and the five checks guide covers the balance check among the others.
For the arithmetic. On a real base the norm is per segment cell and each account's gap is against its own cell's norm. The territory sum is the same shape: current revenue plus the gaps plus the discounted universe.
Because a prospect at norm is an estimate twice over: the norm applied to a size figure from a list, and a conversion that may not happen. The factor is stated, the same for every territory, and it is the company's own judgement written down.
The map is adjusted before quotas are issued: accounts moved between the largest and smallest territories until the ratio is inside the tolerance, with continuity checked. Here territory B gives twelve accounts to territory A and the ratio drops to 1.7.