Most businesses start off as a one man or woman band meaning as a founder you wear many hats and do whatever it takes to get your company off the ground.
At some point during your growth cycle you will have to relinquish some control and start hiring the right talent to fulfill different roles within your business.
As revenues and customers are the lifeblood of any business building a sales team seems to be a particularly challenging part of the growth process.
When to hire your first salesperson
The short answer is: let your pipeline and your personal strengths tell you.
More specifically the right time to hire your first salesperson is either when you realise that by looking after sales, as well as everything else you are managing, you are actually not playing to your strengths, or when your pipeline is too large for you to manage on your own.
Selling your vision to investors is very different from selling your product, service or solution to a client, and as such requires a different skillset.
If it’s not for you, rather than trying to learn how to sell, you should focus on what you’re good at and invest in recruiting the right talent to look after sales as soon as you can afford it, as your company’s future depends on its revenues.
Conversely if you’ve enjoyed the sales aspect of your role and you’ve created a process to source and work on leads consistently, this will help you identify when your pipeline has overgrown you, and you need more people to help you capture all sales opportunities available out there.
Who to hire first
There’s arguments to build a sales team both bottom up or top down, meaning hiring seniors first of juniors first.
In my experience there are two main aspects to consider: the nature of your clients and your deal sizes, as well as whether you have a formal sales process in place when you are starting to hire.
If you are mainly dealing in B2B enterprise sales and or looking at a deal size of 100K+ you would be better off not hiring a graduate out of university, no matter how quickly they can learn, experience, network and credibility are key in this type of sales environment, so a more seasoned professional would be a better choice.
If you don’t feel that seniority is a key factor in your industry or for your type of sales, I would argue the main consideration then revolves around process: if you have a repeatable way of sourcing, and working leads, you know how they churn through your funnel, the length of your sales, cycle, your cost per acquisition, or at least most of the above, you have enough tools to onboard a nurture a junior person who can potentially reach top performance quickly and save you a significant amount of funds.
Conversely if you have no idea of what half of what I mentioned in the previous paragraph means, you might want to consider hiring someone that does, and can find those answers for your business before recruiting a larger workforce of more junior salesmen.
Growth potential and culture
Most founders think of salary packages for sales people as a mix of base salary, commission and sometimes equity to sweeten the deal.
Starting from the premise that you want to hire candidates that are in high demand on the job market, you need to give them a good reason to choose you. Typically for people that decide to work in a startup that good reason is not money.
Whilst equity is a good motivator and aligns your employees’ goals with the company’s, parting with too much equity too early on might not be the best choice.
What is often overlooked are potential for growth and company culture. The former is often what makes a startup attractive to candidates, meaning it is important that you discuss their ambition for the upcoming years. Negotiating how their responsibilities, and consequent remuneration, can grow over time based on their performance can be a huge motivator and compensate for a lower initial salary/benefit package.
Company culture alone can attract top candidates and seal the deal, when you are communicating with clarity what the company stands for and how it is different from competitors, your team spirit, communication and leadership style.
The best way to give your candidates a flavour of your company culture and to test them thoroughly is to invest time to invite them into your office for an assessment centre.
This means designing a number of tasks for candidates to complete whilst sitting in the office with the whole team. You can span from written tasks to interview, group discussions and role play exercises to check how smoothly your candidate are likely to integrate with the team (cultural fit) and impress your customer base.
It goes without saying: sales people are good at selling, and in an interview context they will be selling themselves and their skills. This requires for founders to have extreme clarity about what they are looking for and how they are going to assess whether the candidate in front of them ticks all the boxes whilst making sure that candidates can support their statements with evidence.
Probation period driven by KPIs
One of the ultimate ways for candidates to be able to back up their statements is to structure their probation period with a low base salary, and an uncapped or very generous commission on sales, with a view of finding a better balance between base salary and commission past this period.
Candidates that are particularly confident that they can carry their assigned quota will see this as an opportunity, and this type of offer will operate some natural selection eliminating candidates who are not invested or believe the target they have been assigned are achievable for them.
Having conversation is in itself quite insightful: if a candidate blindly accepts this kind of offer they might be overconfident, conversely if they ask you about your historical performance, what marketing support they might have it shows they are seriously considering the challenge and you will be able to rely on them taking it seriously if they are offered the job.