One of the most important decisions first-time entrepreneurs and sales leaders face is when and how to hire their first salesperson. Hiring too aggressively -- or not hiring for the right role -- can lead to accordion growth, and too much caution stunts sales and company growth.
Your first sales hire also has a big impact on team culture. Basically, this is one decision you really don’t want to screw up.
These five steps cover knowing the right time to make your first sales hire and attracting the right candidates so your company enjoys sustained growth and a killer company culture for years to come.
5 Steps for Making Your First Sales Hire
Step 1: Define customer acquisition goals and budget
Most companies have a financial plan estimating revenue growth. This spreadsheet should show the number of net new customers the company needs to meet or exceed that plan every month.
You should regularly review this count to determine how many new clients you need over the next three to six months (depending on the sales cycle). This ensures you always have the resources to hit your new customer number.
The second part of this equation is figuring out what you can afford to spend on sales resources to achieve that number. In most cases, you should expect to pay 15-25% gross profit back into sales compensation -- but for many small companies, this is a cash flow and investment issue.
Understanding your financial guidelines answers a lot of questions up front and makes you aware of when and who you can afford to hire.
Most entrepreneurs start out as the first and only salespeople for their companies, but eventually they become too busy. If you’re an entrepreneur who’s spending more than two hours a day on interacting with prospects -- or generating new business -- it’s probably time to hire a salesperson who can take over for you.
If you’re a sales team of one who’s ready to make that first hire to expand the team, you’ll know it’s time to hire when you aren’t able to meet your number -- but the pipeline or opportunities are plentiful.
Step 2: Identify your business needs and build a job description around them
Establishing the skills, characteristics, and qualifications your first salesperson needs is critical. The requirements will be different for every business.
Do you want this person to spend more time on the phone or attending in-person meetings? Should they focus on new business development or work with current customers? And will they initiate and nurture client relationships or pass them along?
Once you’ve answered these questions, do your research. Search job boards on LinkedIn and Monster to find job descriptions for similar roles, and use those descriptions as a jumping-off point for your own posting.
Before it goes live, have another trusted salesperson or colleague review the description to make sure it’s logical and will attract the right type of person.
There’s a lot of discussion about the importance of background, business experience, and certifications in hiring. Most of it is a lot of noise.
When in doubt, look at a person’s track record, results, curiosity, coachability, and work ethic. And always trust your hiring manager to decide which of these characteristics are most important to the role and the team.
My personal preference is hiring for aptitude. The easiest, most cost-effective way to build a sales organization is to hire smart people who are willing to learn and teach them the skills they need as your team and company grows.
Step 3: Get lost in the details
Don’t skimp on the details. As you’re writing the job description, outline what a potential candidate needs to know about the position. A good way to identify these details is by thinking through what an interviewee would ask. Here are a few examples of role-specific details you should flesh out:
Title: What will this person’s title be? Are you open to title negotiation?
Compensation: Allocate an appropriate salary and include variable compensation based on their performance metrics.
Reporting structure: Who will this salesperson report to?
Quota: What is the minimum acceptable revenue for the salesperson who’s been in this position for a year?
Ramp-up quota: What will this salesperson’s ramp-up period be and what will their reduced number be in the meantime?
Territory: Where will this salesperson’s leads and customers come from (zip code, vertical market, country, or other)?
Travel: Is there travel involved? If so, how many weeks per quarter/year will they be expected to be on the road?
Social media requirements: Should they have an online presence already? Will they be expected to blog or maintain a social media account?
Sales tools: Is there a tool, software, or CRM they should be familiar with? Are you open to hiring a person who doesn’t have this background?
Think through relevant details before you start sourcing candidates, because these are the things that have a big impact on who will want to interview for the position.
And know when to be firm and when to be flexible. If you find a great candidate but they want a larger salary than you’re offering, be honest with them -- and your own team -- about whether you can and should make an exception.
Step 4: Implement a strong interview process (and stick to it)
The hiring process requires a lot of time and effort. It’s tempting to pick an average candidate just so you can get back to work. Don’t do it.
You risk hiring a candidate that will provide average results and leave gaps in your team’s structure. Firing them will require more time and training resources to get the right person up to speed.
Talk with qualified candidates multiple times to get an accurate picture of who they are and what they’re capable of. Here’s a standard interview process (depending on your organization’s size and maturity, some of these duties will fall either to HR, a recruiter, or the hiring manager):
Step 1: Conduct warm outreach and review resumes
Step 2: Schedule a phone screening
Step 3: Set up in-person interviews
Step 4: Bring back final candidates for in-person interviews, including a role play component
Step 5: Follow up and gauge interest in the role
Step 6: Check references on your final candidate
Step 7: Agree on the offer, start date, etc.
If you’re working with a larger team or a recruiter, decide who will be responsible for each stage of the interview process. You should also ask each candidate the same general questions. Finally, it’s a good idea to create a spreadsheet of candidates with scores to their answers, cultural fit, and more.
Another key hiring strategy I rely on is “backdoor references.” Candidates will rarely provide poor references to a potential employer. Instead, find several people from the candidate’s background and contact them via LinkedIn to verify your applicant's claims. This tactic has saved me from a few bad hires.
Step 5: Source the right candidates
Most startups look for salespeople with a unique set of attributes -- HubSpot calls them the top 2%. To find these candidates, you’ll have to go through 98% of folks who are an average to poor fit.
Don’t give up and never settle. Create a mini pipeline of candidates who fit some or all the criteria you’ve set, so you always have a pool of highly qualified salespeople to draw on.
Follow these five steps and you’ll hire the right people at the right time. Do your research, define a role that will help your business grow, and wait for the best fit. Your diligence and patience will pay off.
Originally published Nov 28, 2017 9:37:00 PM, updated January 29 2019