- The 80 20 rule of
salesmen. You know this one. 80% of sales are produced by 20% of the
salespeople. If you are only hiring one or two, the likelihood is that you
will not get a top performer.
- The president of the
company and decision maker has no sales background so the odds of him
making the right hiring decision are greatly diminished. He will not
understand how to properly set milestones, judge progress, evaluate
performance objectively, or coach the new hire.
- To hire a good salesman
that can handle a complex sale requires a base salary and a draw for at
least 6 months that puts him in a better economic condition than he was in
on his last job. So you are probably looking at $150,000 annual run rate
for a decent candidate.
- If you have not had a
formalized sales effort before, you are probably lacking the sales
infrastructure that your new hire is used to. Proper contact management
systems, customer and prospect databases, developed collateral materials
and sales presentations, sales cycle timeframes and critical milestones
and developed competition feature benefit matrixes will need to be
- Current customers are
most likely the early adapters, risk takers, pioneers, etc. and are not
afraid of making the buying decision with a small more risky company.
These early adaptors, however, are not viewed as good references for the
more conservative majority that needs the security of a big company
backing their product selection decision.
- Your new hire is most
likely someone that came from a bigger information technology company and
may be comfortable performing in an established sales department. It is
the rare salesman that can transform from that environment to developing
the environment while trying to meet a sales quota. Throw on top of that
the objection that he has never had to deal with before, the small company
risk factor, and the odds of success diminish. Finally, this
transformation from a core group of early adapters to now selling to the
conservative majority elongates the sales cycle by 25% to as much as
double his prior experience. If you don't fire him first, he will probably
quit when his draw runs out.
Dave Kauppi is a Merger and Acquisition Advisor and Managing Director of MidMarket Capital, providing business broker and investment banking services to owners in the sale of information technology companies. To view our lists of buyers and sellers click to visit our Web Site MidMarket Capital