“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.
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.
