Hiring your First Salesperson

by Sean Campbell, principal technology evangelist, Campbell Solutions

This series focuses on “firsts” that new business owners will experience as they grow their business. I’ll try to distill some of the lessons I’ve learned as I grew my company, 3 Leaf, the experiences I’ve had as part of other companies, as well as some of my more recent experiences as part of my new venture. I hope that each new article will set you on a higher and more straightforward path to success.

When you hire your first salesperson, you have to realize that you are hiring a different personality type than anyone you have probably hired before as the owner of a technical consultancy. Everyone else to date was most likely aligned on the administrative side of your business or was someone on the technical side. With this in mind, when you reach the point of hiring your first salesperson there are more than a few things to consider.

Compensation mechanics depend on your sales model
First off how are you going to pay him or her? The mechanics of compensation are much more varied and very important to think through when it comes to a hiring your first salesperson compared to purely technical staff. You will have to get more familiar with base packages, commission packages, and how you are going to pay out commission over time. Every knob you turn on the compensation package will attract and motivate a different type of salesperson. In addition, each turn of the knob on the compensation package is likely to have a strong impact on how your sales organization is perceived by your end customers or clients.

If you go with what seems like a simple (and cheap on the front end) high commission / low base model, you are going to attract hunters for sure and that may be exactly what you need. However, you need to put some thought first into whether a relationship-building sale is what got you where you are today or if you were “dialing for dollars.” If you are looking for a salesperson focused on relationship building, for example, you will need to consider paying a higher base from the start – potentially as high as 60% to 75% of total compensation when you factor in commission. Pay much less and you are likely to have your rep focused on paying the mortgage rather than building the relationship.

Any approach of high base/low commission, low commission/high base, or an equal distribution of both will lead to highly deterministic outcomes in terms of who would be a good candidate for the role, their impact on your organization, and your current and potential customers.

Setting realistic performance expectations
In addition, how ready are you to have an employee who is not going to spend a great majority of his or her time on easily trackable, 1:1 billable activities? This is especially true for firms that do not have a history of hiring staff other than technical staff prior to hiring that first salesperson. Even when your salesperson is pushing hard on sales, they are going to find themselves in the position of working on a deal that did not work out, or asking the team to develop a proposal that just was not accepted for any number of reasons. While these things should not happen consistently by any means, they will happen. In addition, your response to those occurrences can have a long-term impact on your business and your salesperson. I’m not suggesting that you sugar coat each response, as salespeople realize that they are in a pay for performance model. But that said, you can’t expect them to win them all. Otherwise, you are driving some very unrealistic expectations.

Planning for sales territories
Lastly, what happens when you go beyond your first salesperson? How do you plan to map out territories? Just letting the salespeople “work it out” is a recipe for disaster, especially in a high commission/low base model. It’s also typically not going to work to let your current salesperson keep all of his or her existing accounts unless your new rep is coming in with a ton of great initial contacts. That new rep is typically going to need some small base of accounts to start with. Separating territories based on geography, verticals, sizes of company, etc. are some typical mechanisms to start the territory mapping process. However, even here you have to think through logically whether there is a good deal of business in that “new” territory you are assigning to your new rep. It may be that your current rep has not been prospecting there for very good reasons.

Having good tracking of both wins and losses and where those occurred over time can make it easier for you to determine how to break a territory into multiple pieces or identify new areas to prospect that are fertile ground. For a small business owner, it is too easy to concentrate on the wins. Tracking the losses and knowing why those occurred makes the wins all that much easier.

Hiring your first salesperson is one of the biggest initial steps you can make as a small business owner. You’re giving the process of initial contact with new and current clients away to someone else. But if you don’t start the process, you’ll never realize the joy that can be found in growing your business and creating even more great relationships with new customers.

The next article in this series is Using Contractors to Grow Your Business.

About the author
Sean Campbell has been a successful entrepreneur since 1999. Sean was a founding member of 3 Leaf a company he grew over a period of 6 years and eventually sold in 2006. He has a long history of working on a variety of consulting projects focused on technology evangelism efforts with Microsoft, Intel, and other companies. He also has been lead author of three books. Two for Microsoft Press published in 2003 and 2005. Intel Press published the most recent book in 2006. You can reach Sean at seancampbell@technologyevangelism.com or read his blog at blog.technologyevangelism.com.