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University of Massachusetts Amherst

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Is Your Company Ready for Its First Salesperson?

By Laurie Breitner and Karen Utgoff

Most businesses start out with the owner as salesperson. After all, no one is better positioned to communicate the vision that inspired the enterprise, its capabilities and offerings with authenticity, passion and tenacity. Although this practical approach works well at first, in time, following through on sales opportunities combined with other responsibilities can overtake the capacity of an owner/salesperson and hinder company growth. In response, owners often seek a dedicated salesperson to boost revenue and add sales expertise to accelerate growth. That early key hire can have a tremendously positive impact on company performance. But, is your company ready to take this big step? Consider these questions.

Is your marketing and sales infrastructure ready?

Successful salespeople don’t work in a vacuum. All of the following are necessary tools for a newcomer; any that your company lacks will need to be developed:

  • Clearly articulated value proposition (Why should a customer by from you?)
  • Defined target market(s)
  • Lead generation mechanisms
  • Tools for the 4Ps: Product, Price, Physical distribution and Promotion/ marketing communications, including brochures and other printed material for customers and prospects, business cards, a Web site, and tools for outreach (e.g., Constant Contact or iContact) and social networking (e.g., LinkedIn, Facebook)
  • Means (ideally automated) to track contacts and sales and marketing efforts
  • Defined sales process and forms (proposal, sales, contract)
  • Product and services descriptions (spec sheets)
  • Revenue (gross sales) goals for the company or product line
  • Detailed revenue and/or other measurable expectations for each salesperson

Decide to what degree the salesperson will help build your marketing and sales infrastructure. This will inform your preparation as well as the qualifications and responsibilities you build into the job description.

Do you have the right workplace tools and infrastructure?

Regardless of your industry or business model, you will need to make provisions for the following when bringing in a salesperson or any new hire:

  • Job description/performance evaluation for the role
  • Training materials to orient the new hire including information about the business plan, company mission, vision, values and history
  • A well-designed compensation package that encourages the performance you need

In addition, depending on your sales model, some or all of these will be needed:

  • Workspace (with furniture or other equipment)
  • Computer/laptop and software
  • Telecomm tools, e.g., network/Internet access, telephone, and cell phone/PDA
  • Vehicle, unless having personal transportation is a requirement of job
  • Travel reimbursement forms and process
  • Driver’s license in good standing, if customer calls are part of sales

What benefits do you expect from the new position?

Compelling reasons to hire a salesperson are to increase sales, free owner’s time for other activities and add missing sales expertise. Savvy owners also seek individuals who bring contacts and knowledge of customers and marketplace. Many anticipate that the owner, working together with the salesperson, can be more effective than the owner working alone. Certainly a salesperson should increase the company’s presence in the marketplace simply by adding more “feet on the street.” Depending on which of these is important to you, define measurable, time-bound expectations for theposition taking into account the learning curve and your sales cycle. Knowing both what you want to achieve and when will help you to evaluate applicants and assess performance.

What will it cost?

One simple approach to estimating the total cost is to multiply planned compensation (salary, benefits and commission) by a factor to account for other costs, such as infrastructure, on-going training, and supervision. Commonly companies use a multiplier of 2.2. Adjust that up or down depending on your sales model; for example, adjust up if significant travel and/or samples will be needed.

Are there alternatives?

Consider whether other approaches–manufacturer’s reps, sales services, online tools or co-sales– are right for your company. All business owners wrestle with balancing capacity building and revenue generation, especially with sales. Make your decision based on a systematic analysis that weighs the costs and potential benefits. You can’t be certain of the outcome, but you will be better prepared to meet challenges when they arise.

This article was first published in SBI Concepts, the STCC-based Springfield Business Incubator Newsletter.

SEC Advisory Board member Laurie Breitner helps businesses on the road to success through strategic planning, organizational development, project management, operational improvement and technical and process documentation. For more information, please visit http://www.breitnerandassociates.com.

SEC Advisory Board member Karen Utgoff, principal of Karen Lauter Utgoff Consulting, is a market-oriented business strategist and a member of the Andrew M. Scibelli Enterprise Center Advisory Board. Learn more at http://www.utgoff.com.

© Copyright Laurie Breitner and Karen Utgoff 2008. All rights reserved.

 

reprinted with permissioin - article first appreared in the newsletter of the Springfield Business Incubator

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