by Jonathan Whistman, author of “The Sales Boss: The Real Secret to Hiring, Training and Managing a Sales Team“
Most of get into a particular business because we love whatever the idea or market is that we’ve decided to pursue. We didn’t get into it because we like selling. It seems that of all of the items a founder wants to get off their plate and on to someone else’s is the role of selling. When you are a young company the choice of whom to hire as your first salesperson and when to hire them is critical. A wrong decision at this infant stage of your business can be fatal to the long-term success of your endeavor.
What are some critical things to consider first?
Do you have a repeatable sales process in place?
What I mean by a sales process is does your company right now understand how your product or services are sold? Do you know how long it typically takes from the initial lead to closing the business? Do you understand the conversion percentage between lead-to-close? Have you created and tested all of the sales support materials? Is there an understanding of what the most common obstacles are and is there a plan on how to successfully overcome them? Sometimes I see companies try to hire a salesperson so that the salesperson can figure all of this out. This is a recipe for disaster! Make sure that when you hire your first salesperson that you can with confidence tell them what to do, how to do it and the results that you expect and will measure them against.
Fail to do this and you’ll waste months of effort and thousands of dollars. If you don’t have these things figured out, it is too early to be adding a sales person. If you need to figure these things out and you don’t have the experience necessary to do so then you are better off hiring a consultant or a person on the team that can test and put a system in place before you hire a salesperson.
Do you have the finances to hire a salesperson?
Many new companies are tempted to try and hire their first salesperson on a commission only type of basis. The feeling seems to be that this reduces the risk of the hire since the company doesn’t owe any money if the person can’t sell. This almost never works. A great salesperson in today’s economy knows their worth and can always command some base salary in addition to their commissions. If you get someone to agree to do commissions only, usually it is because they aren’t great at what they do or they have vey limited experience. Not what you want when your company is depending on their sales results! Consider what other companies are paying their salespeople for similar work and experience and try to be at the higher range. You want to attract the best. Now you know why you should have your sales process figured out first! You don’t want to be paying someone while you figure it out!
Next, plan to have at least three months salary plus the length of your typical sales cycle in reserve prior to making that hire. So if it typically takes four months from lead-to-close, you’ll want to have seven months salary set aside when you make the hire. It typically takes a couple of months for a new person to acclimate and get their funnel full, and then they’ll have the time it takes to close.
Do you have the experience to make a great hire?
Hiring a salesperson is different than hiring for almost any other position. Even a poor salesperson usually interviews well. This means that you need to exercise extra care in your hiring process to make sure you get it right. If you don’t have past experience in doing this successfully then consider a few options: Ask one of your business mentors who have hired salespeople successfully to help you out in the interview and selection process. This has the advantage of being affordable. You can also pay an expert recruiter to help you, but make sure you select a recruiter who has a great track record of getting it right. Treat the decision on whom to hire as though you are writing them a $500,000 check on the day they walk in your doors. This will help you to take the process and decision you are about to take more seriously.
In the end, hiring your first salesperson can be the greatest time in the history of your company and help propel you to the next level of success. Just make sure that you’ve considered these three critical questions and you’ll be on the path to doing it right.
Jonathan Whistman is the author of “The Sales Boss: The Real Secret to Hiring, Training and Managing a Sales Team“. He is the Senior Partner at Elevate Human Potential and shares his insights from over 2500 sales rides in the field.