When Is the Right Time to Hire Your Next Salesperson?

You’ve hired your first salesperson, and business is going well. But you know the only way to grow your revenue is to find more prospects. And the best way to do that is hiring a salesperson. So is it time for you to make your next hire?

Consider the Demand for A New Salesperson

First, consider your supply and demand. If you have enough supply, then you need more demand. Maybe the demand just needs to be notified that you have the supply.

In B2B sales, this usually requires a representative — a person who knows all the features of the products. This rep can show your product to prospects, answering their questions and teaching them how it works for their organization. So how do you find more demand?

1. ID the Marketplace

What type of prospect is your salesperson missing? One person can’t reach your whole market. So identify the areas they aren’t reaching.

2. Segment the Field

Then decide how to divide the territory. Do you want to segment your salespeople based on types of industries, types of sales, size of the organization, or location?

3. Run the Numbers

Hire the right number of salespeople to reach your market. On average, a sales rep should have about 500 prospects to target in a year. So, if your marketplace has 2,000 prospects, you’ll need four strong salespeople.

Are You Ready for Another Sales Rep?

Before you hire your second salesperson, ask yourself these questions.

1. How many prospects are there?

Run the numbers to calculate your prospect to salesperson ratio. Remember 500:1 is the average ratio. If you only have 50 prospects, you don’t need another sales rep.

2. What’s the buying frequency?

Your specific ratio will vary based on the product and sales cycle. If you’re selling a commodity that’s needed every month, you’ll need more salespeople. After all, you have multiple opportunities to sell to the same client. If you have a contractual service where clients sign up for a year or two (i.e. health insurance or satellite providers), you may not need as many reps.

3. Can you afford to hire two salespeople?

Add to your sales team in pairs. Don’t just hire one person at a time. Instead, hire two, knowing you’ll only keep one. Only rarely will they sell the same amount. Rather, one will overachieve — and you’ll know who’s better. It’s easy to see a winner and a loser when they do the same work.

And, if you hire two competitive people, they’ll win over tons of business trying to beat each other.

How to Hire Salespeople Starting Up

If you’re just starting your business, don’t hire only one person. Hire as many as you can afford for the first two months. If you hire just one person, it’s tough to gauge how well they’re doing. You’re going to go through sales reps anyway. So begin with too many reps, and you’re more likely to find that rock star salesperson early on.

How To Hire Salespeople Within Your Budget

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“How do I hire salespeople within my budget?”

If you’re asking this question, it’s likely you have some doubts. There are customers out there who want to buy your product, and you know you need to reach them, but are you really ready to hire a salesperson?

Start by thinking through these questions to determine your approach and what type of person you need to make the sale.

  • How can you reach the potential customers?
  • Will you be calling them or out in the field driving the business?
  • Do you have access to the customers?
  • Can you make personal contact with them?

If you’ve answered those questions and hiring a new salesperson is still the goal, use these steps to stay in budget and find a salesperson who will be a great fit for your organization.

First Things First

Sell Your Product

As the owner or founder, you have the passion to make the business work and the most to lose if it doesn’t. If you can’t sell your product, you can’t expect someone else to. By being in the field yourself, you’ll learn what it takes to make a sale in your industry and can pass that knowledge on to a sales team, saving time and money in the future.

Check Out The Competition

Use your competitors’ sales process to help decide if a salesperson is your best approach. Do they have an effective sales team? Connect on LinkedIn with the competitions’ former employees and take them out for coffee. Talking with them grants significant insight into what works and what doesn’t. You may find that salespeople haven’t been effective in your industry and can go another route for your company. Or if the sales approach works, these connections may pave the way for future hires.

Time to Hire

If you lack time to manage or have more interest in your product than you can handle, that’s a good sign you need extra help. The obvious solution is to hire a salesperson, but if you’re great at selling, play to your strengths and keep selling. Hiring a manager may work better for your situation, especially if you’re unsure about how to run a business. Then, you can keep being face of the product and pass on your enthusiasm to your client and sales team.

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Determining What to Pay

When you hire another salesperson, you must determine the value of your clients to set a pay rate. Figure out the value of the target clients. Your salesperson should cost about 30% of the total sale. For example, if a client brings in $100, $30 should go towards the salesperson’s salary, commissions, training, and healthcare.

Working Within Your Budget

Compare the 30% rule with the going rate in your industry. Use www.getraised.com or, if you’re in a unique market, talk to others in the same market to gauge how much they earn. This will help you set a reasonable budget. Remember, it takes time for these numbers to pay off. Initially, you’ll lose money due the time it takes the new salesperson to ramp up, learn a sales approach, and complete a sales cycle. The sooner you can figure out your sales strategy, the sooner you can duplicate it and start earning a profit.

Before you hire, you have to grow your budget to a point that you can afford the initial loss involved in a new hire. If you have a six months sales cycle, add a couple of months as an insurance policy.

Gauging Success Early On

As soon as you bring on a salesperson, set up daily activity reporting so you can see if they are on track or not. You want the money you’re spending to be worthwhile. Knowing the data of a successful salesperson helps tremendously with this.

In the case of someone in office equipment sales, the industry standard is about 40 visits a day for successful sales. New salespeople should be on track with these numbers to meet their goals. Automated activity reports, like those on CallProof, will indicate whether the new hire is putting in the work to be successful long-term.

Investment vs. Budget

Remember, salespeople are investments. There’s a big difference between budget and investment: Budget is what you have to work with and investment is the long-term pay-off. Determining what customers to reach, who you need to hire, and potential profit balances the value of your investment against a realistic budget.

Hiring Sales People That Succeed with Robert Hartline

robert hartline tropical podcast

Recently I had the honor of being interviewed by Josh Denning on the Tropical Entrepreneur podcast! We had a great time chatting sales and specifically, talking about some of my best strategies for hiring great salespeople.

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Here are a few things we covered:

  • How to make the best use of your time.
  • Things to consider before you start building a sales team.
  • The #1 thing that most organization should spend their energy on.
  • 3 things that matter when managing sales people.
  • Effective process of hiring a sales person.
  • How to train your sales people.

You can listen to the whole episode HERE.

OR download it on iTunes HERE.

If this is the first time you’ve heard of the Tropical Entrepreneur podcast, I’d highly recommend checking out some of their other episodes. Josh talks with some amazing entrepreneurs and the content is excellent.

Hiring Tips For The Salesperson Interview Process

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Finding good salespeople is a difficult task. Finding good salespeople without a specific goal in mind is almost impossible.

Before you can hire the right salesperson, you have to know what you’re looking for. Don’t waste time hiring the wrong person because of a lack of direction. You need a target. Then, when you do hire someone, you can confidently spend resources on training and ensure a return on investment.

Which kind of salesperson do you need?

You know you need a target, but what should you aim for? To get the right salesperson in place, you must first know if you want a farmer or a hunter.

  • Hunters are constantly pounding the pavement, looking for new “game.” If your salespeople need to knock on doors and gather prospects, day in and day out,  you want a hunter.
  • Farmers have less of an attacking nature and more of a nurturing spirit. They often care for a few select, high-end clients. They spend their time dealing with large corporate clients and maintain a close relationship with those organizations.

Once you’ve determined the type of salesperson you’re looking for, use that information to direct your selection process and evaluate the applicants.

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Transaction Volume

Transaction volume is a useful item to check when vetting a new salesperson. Not only does it give you an idea of the type of salesperson they are, it also lets you know what they’re capable of. If a person has had success with larger volumes of transactions, there’s a good chance he’ll duplicate that success within your company. It’s hard to prove a high transactional value so this factor doesn’t always hold entirely true, but there’s a way to prove whether they have already cut their teeth, and if they’re resume is true or not — through this innovative interview process.

The Interview

To get the right candidate in place you need to successfully navigate the salesperson interview process. I highly recommend an extended interview program. Ditch the one-hour sit-down meeting. Instead, talk to potential candidates and select a team that will move forward to the next step: a two-week trial run.

During the extended interview, or trial run, put these candidates through the paces. Give them a list of businesses to visit. Watch them do prospecting in action. Don’t invest much in showing them the ropes or training. What you’re looking for is their ability to “hunt” and endurance for a high volume of transactions.

How do you know who’s successful and worth hiring? The good ones will be able to snag a meeting with the sales manager.

Another tip: Don’t waste good prospects on this group. Send them on assignment to low-quality prospects from which you don’t expect to generate business. Once you’ve identified who has the drive and motivation to ensure, you can start investing in training.

Don’t waste your valuable resources training subpar salespeople. Save yourself time, money, and lots of headaches with a carefully vetted hiring and interview process, and you can be sure that your salespeople have what it takes to succeed.

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Before You Think About Hiring a Salesperson, Ask These Questions

hiring new salesperson

Business owners often wear multiple hats selling product, managing accounts, and running the numbers. Hiring a salesperson can help take your business to the next level and allow you to pass on some of those responsibilities.

But before you hire a new employee, you need to do two things: consider whether you really need the sales rep, and then think about streamlining the process. Ask yourself these questions before you add a new sales rep, and ensure positive growth and an easier process with each expansion.

Do you really need a sales rep?

Before you make the considerable investment in a sales rep, vet other businesses’ experiences with bringing on additional team members. Work your network and reach out to sales managers in other states (who aren’t your direct competition and would be willing to speak with you) or connections on LinkedIn.

Getting firsthand insights on what’s worked for other businesses, knowing the right timing for hiring, and seeking advice on how to train sales reps will help you map out a plan for growth for your own business.

Are you ready to hire a new sales rep?

Ask yourself these questions to determine if and when your business is ready to hire a new salesperson:

Do you have the money?

Hiring a sales rep is a long-term investment. Sure, you could hire someone for a couple of months, but in order for the rep to be successful, they’ll need a few months just to get things off the ground. Making connections and getting to know the industry players takes time.

Preparations for bringing on your first outside sales rep should involve saving for one year’s  salary. That way, you can prepare for a return on investment from a full year of the sales rep working his contacts and connections.

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Do you have a mentor?

If you’re going to hire a sales rep, you’ll need someone in the office to guide the new hire. A mentor needs time in his schedule to devote to training and guiding the rep, but the investment pays off in terms of the sales rep’s success. The mentor will act as a cheerleader, show him the ropes, go to meetings to introduce the rep, and impart his knowledge of the target customer and understanding of how to reach that customer.

Just as the commitment to hire the rep requires monetary resources, you’ll also need the time resources to help the new sales rep be successful.

Does the salesperson know your audience?

The training process should involve learning the ins and outs of your primary audience. However, some aspects of selling to an audience can’t necessarily be taught. For example, a plumbing supply company might need to hire a former plumber or plumbing business owner to get along and communicate with plumbers.

Can you scale the training process?

If you’re looking to grow your business, be prepared to use the hiring process for the next sales rep. There’s no sense in repeating the training from scratch, so keep the future in mind as you walk this first sales rep through learning the ropes.

When you have meetings, even informal ones, record them. Use video to capture significant training sessions (ex. when the mentor walks the rep through product guides, sales presentations, etc.) Hire out the transcription process or have an administrative assistant take minutes and transcribe meetings so the materials are available in the future.

One Last Step

Before your new employee signs on the dotted line and officially joins your team, it’s important to put an obstacle in the way as a final test. Once you identify a great candidate and have all the other steps in place, put the individual through a trial run to see what he’s made of.

Offer to pay the potential rep a fixed rate for coming into the office for a day. Give him a really uncomfortable task to do, such as knocking on 20 doors, asking a question and collecting business cards. This kind of test evaluates if the salesperson can really talk to people, and doesn’t mind approaching strangers and striking up conversations. For a few hundred dollars, you’ll quickly vet the candidate’s skillset, and if he doesn’t work out, you’ve saved yourself a ton of headaches and a lot of money that would have been wasted on a non-starter.