Friday, July 10, 2015

Lesson #210: Need a Salesperson? Recruit Three!

Posted By: George Deeb - 7/10/2015


& Comment

A startup cannot survive without revenues, and more importantly, revenue growth that will impress investors.  And, oftentimes, this success rests squarely on the shoulders of your sales team.  Therefore, your sales team will make or break your success.  Hiring your sales team is arguably the single most important hires you are going to make.  You have to get it right!!

The problem is, more often than not, it is so easy to get it wrong.  Especially, as a first time entrepreneur that does not have past experience in hiring salespeople, knowing the right questions to ask, that are specifically relevant for your business.  I have previously written about the 1,024 Types of Salespeople that are out there, so I won’t repeat those same details in this post.  But, it critical, you are perfectly clear on what you are looking for, before you start recruiting in the first place.

And, to layer on additional pitfalls here, salespeople are salespeople at the end of the day.  It is in their core DNA to tell you whatever they think you need to hear in order to close the deal.  Regardless of whether or not it is really what they are comfortable with.  As examples, not all salespeople thrive in an unstructured and chaotic startup environment.  And, not all salespeople are willing to roll up their sleeves and do the dirty work themselves, without a support team helping them, especially if they have a history of managing other salespeople.

The only way to truly know if you are making a well-educated offer is to ask the right questions as it relates to the above issues, and speak to references.  Preferably ones you dig up on your own, and not the ones they provide during the interview process.  The other key thing is learning how to “read between the lines” on their resumes.  Even if they have all the right past companies or positions, if you see a lot of job hops in a salesperson’s resume, that is typically a very ominous indicator of future success (or lack thereof, in this case).  So, tread cautiously in those situations.  This post I wrote on How to Screen Salesperson Candidates may help you here.

But, the sad reality is, as well as you screen candidates and ask all the right questions, you are only going to get it right one in every three attempts, based on average historical experience.  That means you only have a 33% chance for success in hitting your sales targets with every hire!!  That is why I suggest testing three salespeople during a 90-day probationary period first, before deciding on which one you want to move forward with long term.  The problem with that strategy is, not many sales candidates are willing to play that game.  So, sometimes you just have to take the leap and hope you got it right.  And, structure their compensation package in manner that is heavily weighted towards pay-for-performance (e.g., heavy on commissions, light on salary, until they are proven).

The core issues at hand here are the following: (1) startups often have limited capital, and the worst thing you can do is waste it on underperforming sales staff members; and (2) the longer a bad salesperson is in place, the further out the timeline will be before material revenues will be had (especially in long sales cycle companies that can be up to two years in the making).  The combination of these two elements, can often be the nail in the coffin for most startups:  wasted expense plus lost revenues being the ultimate recipe for disaster.

But, hey, if building a startup was easy, anyone would do it.  So, saddle up, and get ready for one heck of a ride in building your revenues.  Hopefully, this post will help you avoid known pitfalls, and increases your odds for sales success.

For future posts, please follow me on Twitter at: @georgedeeb.

Red Rocket is a featured contributor on entrepreneurship for many trusted business sites:

Copyright 2011- Red Rocket Partners, LLC