I provide advice on sales management and recruiting, bootstrapping, launching startups and healthy living. Founder of PeakSales, ProdentSearch, XTangent, ContrastDigital, Helping-Heroes.com, Ventrada, GlobalX, Investor, Author Sales Recruiting 2.0, Mentor to startup CEO's, author of the blog on life balance and success at www.eliotburdett.com
Good question, thanks for posting.
You are facing a common challenge for founders of service companies. Tap the personal network for business in early years and then need to find new sources of business as time goes on.
I ran a web services company in the 90's and my current business regularly recruits sales people for web / new media companies. Before you attack your sales hiring need, it might be worth taking a step back and making sure that your value proposition is clear and differentiates you from other competitive offerings. This is not only critical for establishing a sales force, but also will help drive inbound leads which are critical for growth and profit.
Assuming you have this all sorted out, you also have a second option for driving new sales besides hiring a sales person - that is to continue selling yourself and hiring someone that does the other things that are preventing you from devoting time to selling. This may or may not be possible depending on what are your other obligations, but I know from experience that finding good sales people who can sell web solutions is not easy - takes a rare mix of technical and domain knowledge, creativity, consultative sales ability and sales DNA.
If hiring a sales person is your best option, then you are unlikely to attract one who can consistently contribute (the only kind you want) by offering commissions since good sales people are employed and earning good income - they will not want to give that up for the privilege of earning 100% commissions, even if the upside is huge on paper.
That said it is possible, if you go outside your industry...I posted some comments on this in other clarity threads:
In terms of attracting the right people I would recommend...
1. Be clear on exactly what you are looking for in skills, experience and DNA - discussed above.
2. Look everywhere- online, social networks, job boards, conferences, referrals, LinkedIn, etc.
3. Write job ads that will stand out and attract attention from the right type of people (vs. typical list of job requirements) - treat the candidates you want to attract like customer prospects and write your job ads with compelling copy
4. Offer careers, above market compensation (not necessarily cash), and the chance to work with a great company/management/team
5. Never stop recruiting because great people are rare and t takes a long time to find them
All the best!
1. Ask yourself why you want to do a startup in the first place - whatever is the motivation, use it to overcome any fears you might have.
2. Ask yourself what is the worst that can happen... It is easy to launch a business, but the cold reality is that the odds of success are stacked against you and only a small percentage of startups become successful businesses...BUT 100% of business founders gain valuable experience regardless of the outcome - this is the upside in all cases. So if you protect yourself from downside risk (ie. don't put $500k to start your first company, keep your day job until the business is generating cash flow, test demand before building a product, etc.) then you can't fail.
3. Don't overthink and just go - since there are so many uncontrollable things that can and will go wrong you have to be almost delusional in your confidence that things will work out. The best time to get over the hump "of what could go wrong" is to start when you get the inspiration and just go. Some of the most successful entrepreneurs I know, don't overthink things...they just keep putting one foot in front of the next. I have one friend who has built several successful businesses and I am certain he could build a an office tower with toothpicks simply by piling one after the other and being patient.
All the best!
I often get asked this by CEO's ...Another angle is to not sell, but have conversations with potential customers - ask questions, qualify who has the problems that you can solve, be enthusiastic, and create conditions where a prospect wants to buy rather than selling to them. As the other responses above indicate, over time, one will acquire selling techniques, but they are not critical to close business. I wrote a brief post on this a while back:
Generally bootstrapped startups should avoid salespeople, for a few reasons:
a. they typically can't afford the base and overall comp required to attract sales people who can actually sell / or afford to support them with marketing, management, etc
b. it will be very difficult to find the rare person with the right mix of sales and startup DNA along with the critical domain knowledge, consequently the startup is likely to settle
c. the founders need to be very involved in the selling and customers will demand it
That said, if the plan is still to hire a salesperson, find someone who has demonstrated sales success in startups and is excited by the early stage in company building. Create a comp plan heavily leveraged on sales results (unless you are in an industry where 100% commission is a common practice, would recommend against $0 base as this creates the false impression that your hire isn't passing time with one company while looking for another job with a richer comp plan - you want your rep focussed). Sell the vision and opportunity to be part of a growth story.
I have written a several blog posts on hiring sales people into start-ups. You might find these useful:
I would change your question to how can you find *great sales reps* who will work for commissions only. You don't want to waste your time with reps who can't sell but will take your full commission role - it is not true that reps on full commission are automatically more motivated to sell - there are many reasons why someone might accept a full commission role...so my advice is to recruit in sectors where paying reps full commission is common (ie office products, cell phones). Invite such reps to call on you, network with them to find out who are the best ones, and contact those ones directly. Avoid recruiting in sectors that typically pay a base salary in combination with commissions as these reps (the good ones at least) will want to have a base. Avoid any rep that is used to a base salary and will work for 100% commission as the chances are that they can't sell and need a place to hang out while they scout for a job that will pay them a base.
Good question. A few comments on sales comp and SaaS.
The comp plan should be tied to desired rep behaviors and outcomes. Pay the most for the things that are best for the business (ie. larger deals or higher profit deals) and less for things that are not as critical.
Keep the plan as simple as possible, as that will ensure the reps focus on what matters most to the business. At the simplest end of the spectrum you have one commission rate on all revenues, then at the other end of the spectrum you have different rates on different products and services. The latter requires a commission guide to decipher and reps will default to what either pays the most or is easiest to close which is not always aligned with business goals. A good balance is often a straight line commission plan with accelerators at various thresholds and special incentives for deals that are highly desirable for the company. In my experience, if the rep can't forecast their commission check in their head, the plan is too complicated.
When it comes to SaaS deals, often commissions are front end loaded - ie. reps are paid only on the upfront contract, first year's revenue, or the the commissions on revenues decline over time. This keeps the sales person focussed on acquiring new accounts vs living on existing accounts.
Hope this helps. Good luck!
PS - congrats on getting to $1M. It is the minority of start-ups that get there.
1. Know exactly what you are looking for in skills, experience and DNA - people that do well in start-ups have a different mix than those that belong in mature/large co's.
2. Look everywhere- online, social networks, job boards, conferences, referrals, linkedin, etc.
3. Write job ads that stand out vs. typical list of job requirements (treat candidates like customer prospects and write your job ads with compelling copy)
4. Offer careers, above market comp (not necessarily cash), chance to work with a great company/management/team.
5. Never stop recruiting.