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For a lot of small businesses, the majority of sales are generated by the owner. At some point, you may decide it’s time to expand your sales reach by hiring a sales executive. After all, more sales mean more profits, right? Not so fast! Hiring a sales executive, especially at a high base salary can be a huge gamble.

Small businesses often report disappointment and frustration over the results from hiring a sales executive. At first, owners are enamored with someone they perceive as high-level, successful or polished – seemingly a sure thing, right? Once the honeymoon is over, both parties are frequently left feeling angry and disenchanted. In most cases, those disappointments boil down to the following primary causes.

Some are related to the person hired and some are related to the business itself:

  1. The expectations for sales dollars and the timing of those sales are unrealistic.
  2. The business has other internal issues, which make a sales person’s job difficult.
  3. The person hired has little or no experience within your market – either products/services, and/or contacts.
  4. References were not consulted and past earnings were not checked prior to hiring.
  5. The compensation plan is not aligned with the goals of the company. Many times, they are simply designed to fit the needs of the person being hired.
  6. Company goals and products/services are not clearly defined, so goals for a sales exec are not clearly defined, or at all.

When making the decision to recruit and hire a sales executive, consider the following to minimize the risk of lost time, money and opportunities.

  1. Be sure you understand the amount of time it takes you as the business owner to go from the first contact to a closed deal. It is reasonable to assume that someone new to your company or industry will need more time than you think he or she needs.
  2. Invest the time to clean your side of the street. If you are having difficulty meeting deadlines or if gross margins are struggling at your current volume, those problems will only get worse with more volume. If your costs are out of control, get a budget in place first and stick to it.
  3. Hire someone who has experience in your industry or with your products/services, particularly if the time to close is long to begin with. Don’t assume that if someone has had success selling in another industry that they will have success in yours.
  4. Check references before you hire. Make sure the candidate is providing you with references of managers, former customers, peers and subordinates. Sales people interact with all levels of an organization and with your customers. They need to be able to make a good, lasting impression in all areas to be successful.
  5. Structure a compensation plan that meets your business’s needs first. If a candidate is asking for a higher base pay structure, make sure you can afford it and know the impact if the person is not successful. Can you afford it if they aren’t?
  6. Know your businesses goals for things like new and repeat customers, sales dollars, profits, on-time delivery, customer satisfaction, and your product/service roadmap. Taking the time to define these goals for your company will help in defining the goals for a sales executive.

Hiring a sales executive can be an exciting time for a small business, but make sure you are doing it for the right reasons, at the right time for your business and in the right way to avoid disappointment.

If you need help in defining your company’s goals, creating a reasonable and realistic forecast, or evaluating if it’s the right time to hire a sales executive for your small business, click here for our contact form.

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