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  • Writer's pictureKevin Snow

Are You Ready for Your First Salesperson?

Inevitably business owners will encounter the following situation. You have been hustling to generate business for your company; you are networking, meeting with clients, doing everything you can to keep the lights on. All that activity has built some small success for your business —you now have some employees and you have a real office. The business is feeling like less of a struggle. But this new growth hasn’t made your life any easier, in fact it’s gotten worse. You still have to sell as much if not more than before, do all the work that a business owner is responsible for and now you need to manage employees! “How can I continue to grow this company if I spend all my time selling? It’s time to hire a full-time sales person, right?” Not necessarily.

The problem with adding sales people is that many times the company doesn't have a working sales model to plug these new hires into. This causes the ramp up time to increase and revenue numbers to be lower than projected. Scaling your sales program isn't just about adding headcount and magically your revenue increases and everyone lives happily ever after. Ask yourself the following questions to see if you are ready to add sales people to your company:

  • Do you know who your ideal client is? Is there enough opportunity available to support a sales person?

  • Do you have a documented sales process that produces repeatable results?

  • Do understand the economics of your sales program?

If you can't answer "Yes" to these questions, there are four key items that need to be accomplished to get you ready for your first sales rep.

1. Create Your Client Personas

This is your chance to identify who your ideal clients are and why they buy from you. In developing your personas be sure to include demographic, psychographic, behavioral and environmental info for each ideal client as well as their pain points. You will also want to include common objections they have. Having insight into who you sell to successfully is important to getting your sales reps to quota faster.

2. Map Your Sales Process

This is your opportunity to understand how to effectively sell to the your prospects. Test different strategies and tactics such as email, phone calls, demos and meetings and see what works best for your ideal targets. Track data maniacally. Be sure to track everything you try and the results.

Key metrics you will want to track while developing your sales process include, average closing time, average revenue per close and closing percentage. Once you have the results you want, then document the process. This process is the basis for how you want your new salespeople to sell your product or service.

When meeting with your clients be aware of what you are saying to the client. Are there certain things you say over and over? Do you explain the value you provide your clients in a certain way that helps them get it? Write this all down as it will be the basis for sales scripts and a training plan for your new hires.

3. Understand the Economies of your Business

Make sure you understand the economics of your business. Figure out your total Cost of Customer Acquisition ( COCA). This includes sales people, marketing people and marketing campaigns. Quick example: Lets say you paid a sales person $10k, a marketing person $10k and you spent $5k on Google AdWords (for a total of $25k) last month. If you sold 10 customers last month, your COCA is about $2,500. Different businesses have different needs in terms of sales vs. marketing spend. Make sure neither is too far out of whack.

Your life-time-value (how much revenue you expect to generate per customer) should be higher than your COCA. Once your LTV is a multiple of your COCA, you’re ready to start turning the knob and scaling the business a bit (hiring more sales people). But, if your LTV is way lower than your COCA, proceed with caution. If there is no hope for LTV getting higher than COCA, you’ve got a problem. Don’t try to hire additional sales people until the economics make sense.

Launching your sales program is an exciting time for your company. It indicates that your business is ready to take it to the next level. But the the decision to hire sales people can be potentially disastrous for those that hire too early in their company's development. Be sure you have taken the time to understand the financial impacts of sales and documented the who and the how of your sales process in order to set your new sales team up for success.

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