This is a question that has come up quite a bit lately with several of my clients. The business has grown to a point where the business owners need to focus working on the business instead of in the business making sales. They now feel that they should grow their business and hiring feet on the street will get them there.
The real answer to the question of when are you ready to hire is that usually when you have to ask you are not ready. It is primarily because your current infrastructure does not support having a new sales person who is a new employee and even though they may come from your industry, they are not familiar with your particular business and it will take a few months for them to hit the ground running. It is a fallacy that hiring a sales rep will automatically free you up to do the things you want and need to do in the business, in fact for the first few months it will most likely increase your workload until the individual is comfortable with your products and services, business processes, and the culture of your business.
Before you consider hiring your first sales rep be able to have an answer to the questions posed below. There is more to it than just having the funding for a head count.
- Have you defined the
characteristics of your perfect target customer?
- Have you decided what
products and services that you will have the rep sell?
- Does your current
pricing model and margins support having a sales rep sell them?
- Do you have a
commission model that supports your margin structure, but is set based on gross
sales not net so that a rep can calculate a targeted income based on the sales
- Have you determined a
monthly and annual quota for the sales rep that is obtainable based on your
sales cycle and history?
- Have you documented
your sales processes and do you have steps defined that make up your particular
sales cycle along with being able to weight them against the likelihood of closing?
- Have you determined
what skills and qualifications that a sales rep for your business must have and
developed a job description? Are you
looking for a farmer or a hunter? Do you
want an experienced sales rep with industry experience, or are you looking for
someone to help groom for your business?
- Have you determined
what the key performance indicators are for the position in order to obtain the
revenue goals that you expect both qualitative and quantitative?
- Do you have a sales
contract that outlines the expectations of the position and the key performance
indicators to judge the position against?
- Do you have a
performance evaluation process in place for your sales personnel?
- Do you have reporting
in place that the rep will have to provide to you on a regular basis such as
forecast, pipeline, activities, and contact reports?
- Have you defined one
person to manage the sales rep and do they have the time to meet weekly with
the rep along with having the ability to provide guidance and feedback?
- Do you have marketing
materials in place to support the sales rep in their efforts such as a web
site, communication pieces, and presentations?
- Are you spending money
on marketing to build awareness and bring in leads to the company versus
thinking that a sales rep’s only function is to cold call and go out blindly
and find new customers?
- And once everything else is in place, do you have the money to pay a sales rep a base salary, commissions, and reimbursements like mileage and cell phone usage if you are not providing a car or a cell phone.
If you have answers to all of the questions above or have a plan of how you are going to address them, then you are ready to hire your first sales personnel for your business. Hopefully this provides you a list of things to think about which will help you determine if and when you are ready. As you work down the list, it is important to document your answers as this will help you not only for hiring the first sales rep, but for every sales rep you hire as you continue to grow your business.
Tags: "sales strategy" "hiring sales rep" "growing business" "sales processes"
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