Transitioning from owner-led sales to a sales team
All owners begin in the muscle and feel stage when it comes to sales. But as your business grows and you try to jump to the next curve in the operational journey, an important challenge to overcome is how to delegate the sales responsibilities to a qualified sales professional. Often, owners may feel the need to put on a ‘super suit’ and swoop in to save the day—but what you don’t realize when you do this is that you’re taking owner privilege every time this happens. As the owner and the person responsible for making all the decisions, you can change the product, offering, or service they provide however you want or need, and your service team has to respond. After all, a service team can’t refuse to cooperate with the owner.
This mindset is just one of the factors that makes it difficult when transitioning from an owner-led sales process to developing a sales team. Let’s take a look at some of the most common challenges you must overcome when you decide to hire your first sales representative.
Challenges when making the transition
The biggest challenge you’ll experience is difficulty in delegating a responsibility over which you currently have total autonomy. A salesperson won’t have the ability to make the same decisions as an owner would in any given situation because they don’t have the same authority level and a service department often won’t be as likely to follow the direction coming from someone other than the owner.
In addition, an owner is also incredibly close to the business and typically knows the business better than a new employee, making it hard to delegate tasks to someone. It can be hard to pass work onto someone you don’t trust has the same knowledge and investment in the company as you do.
An important consideration is owners need to determine if it financially makes sense to hire someone to make this transition. When determining how much to pay a qualified salesperson, we suggest using a version of the litmus test. Ask yourself, “How much money would I hand someone and trust them to deliver?” That amount represents the size of the deal you can expect from your salesperson.
There’s also a formula you can use to estimate how much you should pay a quality salesperson. According to Service Leadership Inc® and what Best-in-Class MSPs do, a sales person’s salary needs to be 8 times the equivalent of 50% of your gross margin. While it may not always be attainable, it’s a good goal to work toward, Here’s an example of how you can calculate the amount of revenue a sales person needs to deliver if you are paying them $50,000 a year:
Selling Services (50% Gross Margin)
8X - $50,000 pay = $400,000 GM or $800,000 in new services
Think about the amount of pipeline needed to hit your revenue goals and the number of new clients to add to make that happen. Is this $50,000 / year example going to be enough to have your business deliver on the bottom line?
Fear of the unknown
Small businesses typically buy from small business owners, not salespeople. When selling to small businesses, the small business owner recognizes a lot of themselves in the person they’re buying from. Will they have that same trust if you are sending a sales person out to chat with small business owners? Sales people are essentially selling happiness in an SKU—selling that someone is going to deliver a feeling. It’s important you find someone who will connect with these owners and be able to sell them that feeling.
Working with your internal teams
This is also a difficult transition for the technical team. In their current structure, they don’t have sales people, so their culture is more technical. Plus, if you’re still doing the sales responsibilities, chances are good you have a higher level of knowledge around the products or services your business supports vs an external representative. In addition, the internal teams will need to trust the sales person who comes on board and understand when or why they might be making modifications to a service offering – and you will need to trust that the sales person is making appropriate modifications (if needed) to close a deal.
Making the first transition
Owners can start to bridge the gap between closing their own deals and hiring a salesperson by accepting that they need to back away from being involved in every step of the sales process. The first step an owner can take when attempting to delegate some of these sales responsibilities is to hire an admin or someone who can help them with some of the routine tasks like quoting and setting appointments. Then when the owner is focused on selling and delegating these tasks still isn't enough, they can start to look for full-time sales help.
Additionally, before you hire a sales professional, make sure your internal processes are set—that way you aren't losing clients along the way. Make sure you have an established sales process and define any change in company culture before passing off responsibilities to a new employee. A lot of owners get addicted to being the hero of their company. In this sense, the owner may feel inclined to take away the power from the salesperson if they don’t do the same thing as they would have done, even if they have a successful and well thought out process. However, a company can’t backtrack when things start to decline, and owners need to understand this before they start to delegate tasks to other team members.
Even after all this due diligence and work, there is usually a high churn in sales team members when first bringing them on. This is natural—you’re still trying to figure out the right fit and personality type before you find something that works for you. Resist the urge to want to take back responsibilities from any new sales hires, and instead work to onboard them and make sure they are working well with the existing processes and people within your company. Expect a one to two-year process to find a good, trained salesperson, determine if they work with the culture, and to get finances and operations set in place.