When Should You Add Your Next Salesperson – Part 1
This is an interesting question. It’s actually a subset of a broader question, “How do I know if I should make an investment?”
Unfortunately, investment decisions are usually uncertain, but there are a few things you can do to clarify the answer.
For hiring a salesperson, I’d ask…
– What is the current capacity of the team, and could you get more out of the team by “training them up” or restructuring how they’re supported?
– How hard will it be to find the right person for the job? (“Finding a salesperson is easy,” a client told me once. “Finding the right salesperson is what’s hard.”)
– Being really honest, how good are you at hiring in general, and at hiring/selecting salespeople in particular? How often do you find and select the right person?
– Since you probably won’t be able to hire the person right at the point your sales team is maxed out, would you rather live with the risk of paying someone who is not fully utilized, or having your staff stretched and possibly having some errors?
I often talk to my clients about hiring “ahead of the curve” (before the business is there) or “behind the curve” (after the business is there). The important thing to realize is that it’s unlikely that you’ll actually hire “on the curve.” So, you just have to decide what kind of risk you want to manage. You could make the investment before you know if you’ll have the business to support it – and be positioned for growth sooner. Or you could overtax the organization with more work than it can handle – and keep your expenses down.
The “right” option for you depends on your situation (e.g., “We’ve got tons of opportunity we just need feet on the street to get”), your business strategy (e.g., “We have to grow”), and the level and type of risk you are comfortable with (e.g., “I don’t like to make an investment until the odds look pretty darn good.”)
With salespeople, there sometimes is a way to have your cake and eat it too – by paying someone mostly on commission. The benefit of this approach is that you’re adding the bandwidth without the cost. The danger of this approach is along the lines of “You get what you pay for.” If you have proven that commission-driven salespeople can sell your product, and you can characterize the opportunity you have to offer, then you have a good chance of this working. If you’re still figuring out how to sell your product, or your other salespeople are not commission-based, then it would probably be a waste of time to look for someone using that compensation model – it’s just not good odds that you’ll find the right salesperson with that risky compensation.
If you don’t want to hire a salesperson now, there are alternatives that can get your more “throughput” from your sales team:
– “Training up” your current salespeople so they are more effective
– Improving processes or systems to make them more productive
– Having your admin staff (who are easier to hire than salespeople) handle more sales support activities for the sales team.
Lastly, there are a few things to keep in mind for hiring effectively. It’s generally a tough hiring market, so start looking early, because it’s likely to take you longer than you expect to find the right person. Also, plan to spend as much time on-boarding the new hire as you took to hire them. I’ve seen many salespeople flounder at the start because the company didn’t help them get into the business.
If you want to learn more about what kinds of salespeople there are, and what kind you might need, an excellent book and enjoyable read is Selling the Wheel.