I’ve been coaching small business owners for 5-6 years now and I hear a familiar refrain from the ones frustrated by not growing despite all the work they are doing: “I’ve got to hire a sales guy. Once I can take care of that, I can cut back on the time I’m spending and the stress.”
I laugh when I hear that because I said the same thing many times. Here’s my case against hiring a sales guy or gal:
“Most sale people aren’t worth the cost of the suit they wore into your office.” I heard this line from a colleague who has spent the last three decades selling everything from telecom equipment to professional services. He knew of what he spoke. How many sale reps have you seen with the two year resume? They can use a few contacts or bullshit long enough to get through two years before someone gets the nerve up to fire them.
“If they were good, they’d be making a $1m plus at Oracle.” If you are a small business the chance that you’re going to find someone who is actually talented is small. Those people end up working at places where they can make a lot more. Sales people make a lot of money and are motivated by it. Why would they go somewhere small where the numbers are smaller?
You need a sales process not a sales person. I’ve written before about the importance of creating a good sales process rather than tossing sales over the fence to some new person at your company. Sales is about relationships and deep instincts. How likely is it that some person can walk in the door and sell?
Sales is Fucking Hard
Let’s just get this established up front: sales is fucking hard. You’ve got to know what you’re selling deeply, you have to articulate its value, and you have to go in front of humans and try to get them to agree with you. Those potential customers are parting with their own hard earned cash or they are getting competing messages and demands to put the money somewhere else.
There’s also just no bullshitting in sales: you either book the sale or you don’t. Most people hate asking for money, pushing things on people, and don’t want to be rejected. Those people work in marketing and get paid less. I remember when I took an aptitude test after college, the result pointed clearly to sales. I thought: what am I, Willy Loman? No way do I want to do that. Then I spent most of my career selling professional services.
You’re the Answer1
For almost any small company the best answer is for the owner to keep selling. A large portion of the companies I coach have a CEO/salesperson set up. The exceptions I’ve seen are people with a financial background who buy companies or someone who has a deep technical expertise.
The reality is you better make damn sure you or someone else can sell what the company you’re buying does or else you’ll be in trouble after purchase. In the case of the deep technical expert, they often sell by attracting customers to their expertise or they’ve partnered with someone who can sell.
There’s just no way around it in most cases if you want to grow, you’re going to have to sell.
How to Make It Better
My follow up question to the stressed entrepreneur we met in the beginning of this post is: if I looked at your calendar, what do you do besides selling? Better yet have the person pull their calendar for a couple of weeks and do a rough calculation of how much time they are delivering to customers, selling to customers, managing people, or doing some admin task.
I usually get an answer like: sending out invoices, approving expenses, running payroll, covering for an employee whose incompetent, or managing existing clients. If it’s the first three things, I smile and think, this is going to be easy. Go hire someone to do the admin crap. That’s just not high value add and competent solutions are available at commodified prices. I will guarantee you this: if you prioritize doing admin tasks with your own time, you will never grow. Guaranteed! You can solve this problem in 2-3 weeks.
If it’s “I’m covering for incompetence,” my smile dims a bit. The solution here is simple but not easy. You’ve got to fire the person and get someone better.
Then the stressed business owner says, “But they are getting better.. but I haven’t coached them enough…but, but, but.” It isn’t going to happen. Maybe in some fictional universe, you’ll have the years it’ll take to make someone better but you’ll be bankrupt by then and the employee will be looking for a new job anyway. Just move on. If working with problem employees led to good results, France would have the biggest economy in the world.
Managing Customers
Managing customers is the hardest situation to deal with. Extracting yourself from a customer(s) that relies on you is not easy. However, it is essential to the growth of your company but while difficult it is easier than finding a qualified salesperson. To reduce your customer care time you are going to have to find a way to do one of two things: sell more work while still delivering to the current customer or ease someone else in who can take an increasing share of your role over time.
If you sell more work, you can cover the cost of the new person you hire but you create pressure to deliver to a new customer as well. That can make the transition with a current customer tough and you lose the “easing” part. If you bring someone else in to take increasing responsibility from you, you are taking on additional cost without additional sales and that means making less money. Pick your poison.
Neither is easy but businesses don’t return from 50-200% on capital because it’s easy. Lots of companies don’t grow because they can’t find a way out of these issues. It’s really hard. Only a tiny percent get past $1m in revenue and that percentage shrinks as you go up the revenue scale largely for these reasons.
Just Do More Sales
So in the end, you are most likely the best sales person. Try to move any extraneous tasks to a less qualified person. It’s much cheaper to pay someone $40/hour to do bookkeeping and payroll than to hire a full time sales person. You will face difficult choices if you are doing the sales and delivering to customers depending on the structure of your business, but we get paid the big bucks to navigate these issues.
This advice applies to small businesses. As you grow you eventually will have to commodify your sales process so that others can do it. This essential to creating value in your company but this is at a pretty mature stage in the business. Until then it just doesn’t make sense.
Excellent stuff Alan. I could not agree more and am looking forward to reading Part I. Glad to be reading your essays now!