We have written a fair amount in recent blogs about the necessity of truly knowing your customer, the buying environment, where you fit in the ecosystem, your value proposition, etc. Each of these elements is vital in developing and refining your product and your business model. So now you feel confident that you have done the broad and deep work of gaining insight into your intended customers and have an attractive offering to begin selling. Congratulations, you have come a lot farther than the majority of new ventures. Now, you have to decide how best to bring your product or service to that audience you have identified. Building a great web site, generating good PR, and running an effective social media campaign are good foundational elements of any business development plan, but in most markets, they will only take you so far. At some point, you are likely going to need to consider hiring full-time salespeople. When is the right time to make that hire?
Make no mistake; this decision could be as if not more important than any other you have made to this point in building your business. If you wait too long, your great idea might be less timely or a new competitor might swoop in and capture exactly those customers that you should be calling your own. History is rife with examples of inferior products winning out over superior ones, and the inability to effectively connect your product with its intended audience is a great way to ensure you become yet another example. At the same time, hiring too soon can also have a significantly negative impact on your business. Great salespeople can be worth their weight in gold, but you probably do not have an abundance of gold lying around waiting to be given to a new member of your team. One of the worst mistakes you can make is to go halfway in this area and hire a mediocre salesperson—you will be taking a hit in salary and benefits regardless of performance, and you won’t be giving your product the fair shake it deserves. And, when results don’t meet your aspirations, it will be more difficult to identify if the cause is one of product failure or sales failure. Finally, what happens in 6-9 months when you make a change to your product and/or target market to capitalize on a new opportunity and the salesperson you hired is a bad fit for the new product direction or customer profile?
So, what’s the solution? We believe that most small-to-medium sized businesses (and some larger ones) would be best served by delaying the hiring of a full-time sales team (or person). Look for alternative options—independent sales reps, partnerships with complementary companies with salespeople already calling on the same customers you need to reach, or consultants to name just a few options—that will allow you to ramp up your business development efforts without overcommitting yourself too early. Whatever direction you go, be sure the salespeople you are hiring have demonstrated success reaching your target customers. They do not necessarily have to have sold in a similar category to your business—that can be a plus or a minus—but an understanding of the dynamics of the decision making process, the jargon of the customer, and the like will let you skip some of the learning curve in any new sales process. Also, do not be afraid to push hard for results-based compensation agreements. Getting quality, commission only reps is likely to be a major challenge, as the caliber of individuals you are seeking are likely to have more attractive options available to them. That said, such professionals may be willing to take less upfront in exchange for attractive commission percentages or even a bit of equity for stellar performance.
As much as any other aspect of your business, you truly get what you pay for in sales/business development, so invest wisely!