Ready to Hire a Salesperson?

Businessman drawing a financial graph (histogram)

In the balancing act of developing a business, the feast or famine cycle and other signs may indicate it is time to take the leap and add sales staff.

At the inception of a company, development of a customer base is crucial to the survival and the eventual growth of the business. In a small business, this task often falls upon the business owner. Most new owners find 80 percent of their time needs to be devoted to business development to secure business, leaving 20 percent to organizing and running the business.

As the business development efforts take hold and the company starts to grow in revenue, the owner needs to shift time and energy toward running the business, to the detriment of further development of new business. Eventually the lack of new business becomes apparent, and the owner must take time away from the day-to-day operation of the business to focus again on business development. This vicious cycle of feast or famine, finding new business versus handling existing clients, can be draining and also financially damaging. When new businesses fail, it is often due to the lack of new sales. The ideal situation is a steady flow of new orders coming in balanced with responsible management of existing business. A hard balancing act to achieve!

Caught in the feast or famine cycle? It may be time to hire a sales person. The right person can provide a continuous stream of business and eliminate the pressure of trying to find clients and work the management of the business at the same time.

Signs of sales needs abound
While the feast/famine cycle may be one indication that hiring a salesperson might be on the horizon, other tell-tale signs will often abound. Is the time devoted to finding new business affecting the quality of service with existing clients? Is the level of service less than the quality aspired to? Has response time for returning phone or email messages reached a frustration level? No one wants to simmer on the back burner. Clients and potential clients are the lifeline of a company, and successful businesses find the time to treat them as such. When people have to wait too long for a response, they will go elsewhere for their needs.

Clues that it is time to consider a sales person may come from relationships with network partners as well. Partners providing leads from clients expect a response in a timely manner. In one case, a successful realtor had developed a partner relationship with the home inspector in her local networking group. She had been pleased with the feedback she received from the clients she referred. But as the home inspector’s business grew, so did the amount of time he took to follow up with the referrals. Delays of three days started to become the norm. And once referrals were contacted, conversations centered on how busy he was and the difficulty of setting appointments. The realtor experienced a backlash from clients complaining of the inspector’s unreliability and lack of responsiveness, and this reflected badly on the realtor. She decided she could no longer refer the home inspector in the group. Sadly, this decision was not based on the quality of the work or the work ethic. Once a network partner becomes disenchanted, the reputation with the rest of the network group can be marred. If not handled in a timely manner, escalation to a major concern and a potential loss of revenue could result.

Another sign a salesperson may be in the future is the attitude toward business development activities. Are cold calls or follow-up calls and emails relegated to the last activity of the day, maybe not getting around to all of them? Does attending the weekly network meeting or chamber event create dread and anxiety? Perhaps now is the time to pass business development to a sales person who loves the challenge of these events and connects well with people in these settings.

Finally, spend some time evaluating the business development numbers necessary to create a success business. Work the numbers backward, starting from the amount needed to be realized every month. This is a good method to determine how much activity is needed for a successful month, and which development activities are working. Use this information to create a road map for success.

For example, if the monthly goal is $50,000 in sales and the average sale is $10,000, an owner needs to secure 5 clients a month. Breaking down even further, track how many calls or network events lead to a meeting with a potential client. And how many of these meetings result in a sale. Knowing and understanding these numbers can be critical in determining the work load necessary for business development and success. Numbers related to development need to be tracked on a daily or weekly basis. Every number counts!

Business development takes time and energy. Before the situation negatively impacts the future of the business, the smart business owner needs to heed the signs. The feast or famine cycle, complaints from clients or networking partners, development numbers falling short, could be saying it is time to edit the business plan. Adding a sales person might be the right step to elevate the business to the next level!