“Sales” can be a scary term, especially for founders with a new solution trying to grow their customer base. It takes courage and energy to meet with prospective customers, but hiring a sales leader too soon can be detrimental for a startup company.
So how do you know when it’s the right time? Here are some general guidelines that can help you decide when to bring on a salesperson:
- Product-Market Fit – Before you can sell your product or service, you need to ensure that you have a market for it. With any new product or service, founders need to learn what customers need, what the solution will mean for the customer’s goals, and how to make that solution work in the customer’s environment. Now, will it work for other customer environments?
- Defined Sales Processes – How do you approach a prospective customer? What happens when they say “yes?” To maximize the value of a salesperson, you should have a defined and tested sales process, vetted service contracts, and a clear understanding of what works and what doesn’t when onboarding new customers. Defined, tested sales processes allow the salesperson to focus on acquiring business, helping you to scale your sales efforts and generate more revenue.
- Defined Sales Goals and Commission Plan – While “commission only” sounds great for financial projections, quality salespeople expect a base salary and a defined plan with goals to achieve commission. These elements combine to make the “On Target Equivalent” salary (OTE), which represents what they will make if they achieve 100% of the company’s goals for sales. If things are working well, it’s likely your salespeople will make more than the founders. (That’s a good thing.)
Of course, the “right time” will depend on the specific needs of your startup, but don’t rush to hire a salesperson because you’re shy, ashamed of being labeled a “salesperson,” or don’t feel you can close deals. Founders gain knowledge and refine solutions when engaging initial customers; salespeople take those lessons and apply them to prospective new customers.
Before spending money on a sales leader, make sure you are maximizing their prospects by having a replicable, scalable solution with defined, tested processes and the ability to support the customers they bring on. Their success means the success of the company, so give salespeople the proper foundation before sending them into the Wilds.
