When to Hire Your First Salespeople – A Practical Guide
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Knowing when to hire your first salespeople can be the difference between THEM having success or not.
You might be at a point in your business where you’re wondering when to hire your first salespeople.
Product or service works? Check.
Pitch (or demo) is solid? Absolutely.
CEO working 70 hours a week? You know it.
Startups can be one of the most exhilarating and fun things anyone may experience in the world. That said, they can also be depression-inducing and as stressful as the 2016 election season.
The quickest way to leave the fun and end up in stress is to hold-off on the hiring process.
Getting to take off some of those many hats you’ve been wearing as a founder can sound good, but be worrisome at the same time. Budgets, training processes, and taxes are all valid concerns (to name a few).
Most of the time, first hires are either in sales or operations.
Depending on which one you’re good at will determine who you’ll want to hire.
Since we specialize in sales and lead generation, we feel strongly that a great sales rep would do you wonders. And we hope to prove it.
In this post, we’ll go over a few things to help you hire your first sales development rep (SDR).
- Why an SDR and not something else (e.g. VA or closer)?
- When is it actually time to put out a listing (practical markers)?
- How do I prepare to have a baby sales team (practical tips)?
Let’s get started!
Why an SDR?
But all of the “experts” say to hire VAs to do lead gen, create spreadsheets, and mow the lawn. Why would I hire a full-time employee instead?
It makes way more sense.
First, lead gen and even cold emailing can be automated.
Secondly, SDRs specialize in setting qualified appointments that are ready to close. VAs are great for taking things off your plate, but SDRs can (almost directly and immediately) add to your bottom line.
So, why not a “sales rep” or closer?
We are very specific that your first sales team member should be someone who qualifies the leads you have instead of someone who is closing accounts.
You are still (presumably) a young business. That means you know the product well and can’t take too much time training someone else to close.
That is time you may not have and sales that you can’t risk losing to someone who doesn’t have the chops to sell your product.Make no mistake, even seasoned pros can't close your product like you can at first. Click To Tweet
Sure, give them a month or two and they can wipe the floor with your numbers, but think of the sales lost over that period on top of a salary.
SDRs, on the other hand, can interact with leads, dole out content, and ask preset questions to listen for prospects and weed out suspects.
They can slowly begin to let you know when they think a lead is ready.
And you can slowly hand over more and more of the nurturing/qualifying process until you’re comfortable.
Closer does a bad demo on a good lead—no sale. SDR sends you a few too many suspects—you’re still saving time without losing money.
Savvy? Let’s move on.
When to Hire Your First Salespeople?
Take that with a grain of salt. There are obviously startups that have no business bringing a sales rep onboard. However, if you’re asking this question it’s probably the time you should consider it.
They don’t have enough leads, enough cash, or a fully-functional product.
However, there are way too many organizations and bootstrappers who could have and should have hired someone from the first weeks their product was available.
If you’re a service-based business, or create your products manually; having a sales rep doesn’t make sense until you can meet the demand of the number of closes you have.
Software doesn’t have that problem. It’s ready all the time.The more leads you can move delicately, yet deliberately down the funnel the better. Click To Tweet
Even though it sounds scary and will take some budgeting (we’ll get to that in a minute), you’ll be much better off having someone to handle the pipeline while you are closing and handling the other aspects of the business.
Still, you may not feel like you’re quite ready. We’ll break it down a bit more.
Consider the three basic steps of your process. You have lead management, acquisition and then you have retention of clients.
- Lead Management: This is the process you hope to offload. When you can’t handle the volume of leads that are available, it’s time to hire. SDRs send emails, make phone calls and coax leads into becoming warmer. There is a lot of work here that is relatively easy to offload over time.
- Acquisition: If you can’t (in a given week/month) handle both the leads and the appointments you’ve set to close, it’s time to hire. If you are staying up way too late every day to be both halves of the sales process, it’s past time.
- Retention: Churn is indeed a four-letter word in the software world. Any business hates losing existing clients. If you are irritating your current users, you are losing referrals at best and customers at worst. Hire an SDR and get your balance.
Making Room for a Team
We’re going to save you the trouble of another Google search.
If we’ve convinced you that it’s time for a hire and that it should be an SDR, it would only be fitting to give you a few pointers on bringing your new teammate onboard.
The Actual Hiring Process
Hiring and training sales staff is a passion at LeadFuze.
Healthy sales and marketing processes are the veins of a brand through which your leads flow. Hopefully then, it’s no surprise that we have written on the subject a few times.
Here’s a list of posts for further reading:
- How to Hire a Salesperson: A unique, yet thorough approach to listing your position, finding candidates and interviewing them.
- 7 Steps to Follow when Hiring Sales Development Reps: A deeper dive into our brutal process. Only the best survive.
- Best Sales Blogs: The Ultimate List: Quite possibly the largest list of sales-specific blogs on the internet. A great resource for you and your new hire to keep your skills sharp.
Who to Hire
A quick note here.
You probably have a lot of knowledge about the type of culture you hope to create and that is really important.
We don’t want to influence that.
We do want you to hire someone that is fit to be employee #2. Here are a couple of things:
- Experience Level: Having someone with SDR experience could help you save time, but they’ll come with baggage from their last employer. A fresh hire in the industry will be all yours, but take longer to train. This is a judgement call you’ll have to make.
- Future Planning: Don’t just hire a grunt. Recruit someone who can replicate themselves and potentially take over a sales team down the road. Hiring someone with leadership capabilities is crucial to growing a company.
“Hire character. Train skill.” — Peter Schutz
Affording a New Hire
Probably the loudest objection and biggest fear founders have is the lack of funds to afford qualified staff at their startup.
Yes, it is scary. And you may not be able to afford it.
But you should at least do the math.
Sample Equation: (Number of qualified appointments/month) X (Close rate %) X (Average sale)
Taking that math, let’s say you typically close 7 new users/accounts out of 30 appointments per month at an average sale of $1000 for an annual subscription. That’s $7,000/mo in new revenue.
Enough for you and expenses.
What if you could pump 2X more leads into your funnel and the SDR (along with you) set up at least 50 calls a month?
By our math that’s around $4k-ish more a month. And this is conservative.
Doubling your appointments with your current process and another pair of hands on deck should be easy enough to do.
Note: Have at least 6 months of salary for your SDR in the bank. It will take you some time to train and get everything moving. You don’t want a major expense to put you in a bind where you have to hand out your first pink slip days after your first hire.
Training Your First Hire
There are no shortage of guides to train new people. We even have some we’re working on (should be published soon).
However, your first hire can and should be different.No guide or process written by someone else is going to be the exact template you will use. Click To Tweet
In most cases, your organization will literally double in size when you hire your first SDR. It’s your (and maybe a partner’s) baby.
This is not training at all really. It’s like a transfer.
A delicate and non-violent tug of war where you and your new employee work together to figure out how much responsibility is moved from one person to the other over time.
Should you know exactly where you want them to be in 30 day, 90 days, 6 months, and a year? You betcha.
But right now, you handle everything and your calculations could be off. Which leads us to the biggest piece of advice for when you hire your first salespeople.
Take Your Time
You’ve been without them this long. Make sure they are getting everything you’re telling them.
Have a prioritized list of things you want them to do (and consequently you won’t do anymore). Work down the list, but don’t move on until you (and the new hire) are comfortable and able.
Bonus Points: Keep track of what is working and not working. Eventually, you may have a whole sales team and you’re learning how to train just as much as your SDR is learning to sell your products.
If you have a sales team at your organization, what are some tips that you can offer those looking to grow their team? If you aren’t convinced you’re ready to hire, why not?