Design territories and quotas

Who this is for

Founder led lower-middle market companies with 5 to 50 million in annual revenue building their first sales team.

The quick answer

Start with account potential and segment fit. Use named accounts for enterprise and simple geographic or vertical splits for the rest. Balance books so each rep has a fair shot. Set quotas with top down goals and bottom up pipeline math. Review twice a year and protect customer relationships when reassigning.

The method in seven steps

Score account potential
Use firm size, fit to your ideal customer, and a simple intent or trigger list. Rank accounts into tiers to balance books.
Choose the right model
Enterprise gets a named account list. Mid market and commercial get geographic or vertical splits that align to buying patterns.
Balance territories
Give each rep a similar count of tier one and tier two accounts. Document the logic so people see the fairness.
Set quota the simple way
Start with company revenue goals. Apply ramp rules for new reps. Use bottom up math from meetings to wins by segment and adjust for seasonality.
Protect relationships
When you reassign, keep the account owner in the loop, set a joint handover, and keep any active opportunities with the current owner until close.
Publish the rules
Write rules for ownership, coverage of inactive accounts, and process for disputes. Clarity prevents politics.
Review twice a year
Update potential scores, move accounts as needed, and adjust quotas only on the review dates to avoid churn in the field.

Example

A company at eighteen million moved to named enterprise lists and regional books for the rest. They balanced tier one accounts and wrote handover rules. Morale improved and pipeline coverage rose.

Pitfalls and fixes

Carving by zip codes without buyer logic. Use fit and potential first.
Quotas set only from the top. Blend top down and bottom up math.
Surprise reassignments. Use clear rules and clean handovers.

Checklist

Account scoring and tiers
Territory model chosen and balanced
Quota math with ramp and seasonality
Ownership and handover rules
Twice yearly review on the calendar