When It’s Time to Hire Your First Salesperson…
A few weeks ago I wrote about three questions an executive or owner must ask before hiring his or her next salesperson. While helpful, a few readers wondered if there were any best practices regarding when it’s time to hire their first dedicated sales professional or team of professionals?
That is a much more complex question than meets the eye.
First of all, hiring your first salesperson is a strategic question. Unfortunately too many small business owners decide to hire their first sales team or person when they need more sales. That’s not a proactive decision but a reactive one. Since the business is likely cash-poor but the need for sales is high, owners or managers hire the person(s) they can afford, not the talent they need. The small business owner has his eyes set on more revenues, expecting profits to flow down. But without a plan, the value of hiring a salesperson is profit neutral at best.
Hiring your first salesperson should not be a rescue plan – a hail-Mary pass. When hiring the first salesperson(s), a business needs a plan for growth. At minimum management needs to determine how much revenue each salesperson must produce and how much profit will fall to the bottom line. (The amount of profit may range from nothing for a strategy seeking to grab more market share to some determined higher amount that satisfies shareholder and/or equity owners.)
Just as important, management needs to be sure the company can keep up with demand. By hiring the right salesperson, demand will increase. Management must assess if it has the available capacity and resources to fulfill what a talented salesperson sells. This might sound a bit silly but when I asked clients “what happens if the salesperson you hire exceeds your expectations?” often times they respond, “he will just have to fit in and understand he can’t sell too much!” More sales could be the feather that breaks its back, not the catalyst that allows it to fly. In other words, before hiring its first salespeople a business needs to have a plan and be prepared for growth. Too often a small business is so lean that the current infrastructure including its people are stretched (and stressed) beyond capacity.
What information should you have before you begin the search?
I recommend starting with this question: Think about us sitting down one year from today and reviewing the results of your sales team. What would they have to accomplish to exceed your expectations? How much revenue must they bring in…and from what products and services? How much must they contribute to profit? What types of clients would they need to attract or how would the purchasing patterns of existing customers change?
From those questions you can identify the essential responsibilities, skills and experience a salesperson needs to meet expectations as well as the best salary/bonus/commission structure to attract and retain the salesperson.
The owner or managers might also want to consider a retention plan too. What happens if you do hire the right person? What do you need to do to prevent your competitor from “stealing” your star employee?