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Every week, I’m sharing a practical, hands-on guide on how to run your small business better.
Each one comes from the Scalepath resource library — my small business peer group, connecting leaders across the country who are all solving the same problems.
I’m chatting in the Slack community every day, we’ve got a great retreat this December, and there’s always something new happening.
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The Playbook: How to Hire and Onboard Your First Salesperson
When do I need a salesperson?
At most small businesses, the founder plays salesperson for a long time. Often too long.
And I get it. Letting go of the reins is nerve-wracking. You know your ideal customer and how to target them. You’ve gotten good at moving prospects down your sales funnel, and you’ve got a great pulse on how your customers are feeling.
But sooner or later, you need to free yourself up to grow the business.
Here are some good signs that it’s time to hire your first salesperson:
- You know your ideal customer and have a clear value proposition
- You know how to move a prospect from lead to customer
- You’re confident you can continue to generate top-line leads at a predictable rate
- You’ve closed at least 15 customers yourself and understand that repeatable process
And here are some warning signs that you’re waiting too long:
- Existing leads are going stale because you don’t have time to nurture them
- You’re not proactively creating new leads
- You don’t have time to pursue new opportunities with existing customers.
The hiring process
1. Build your sales scorecard.
Keeping the right metrics is the only way to tell how a salesperson is doing. Make sure you’re tracking at least these three stats:
- Conversion rate (from lead to customer)
- Average order value or customer LTV
- Length of your sales cycle
Set your revenue goal for the year, and work backward to build weekly and monthly targets for your salesperson. This will give you a quick and easy way to identify issues.
A reminder: don’t expect your new hire to achieve your conversion rate right away. Any new salesperson will need some training time to get up to speed. Depending on the complexity of your product or sales process, this could take weeks or months.
2. Identify the skills and qualities you want.
First, review my hiring playbook for a refresher on how to hire anyone for your business.
Then consider what specific skillset of sales you’re looking for. Are you looking for someone to do outbound? Inbound? Cold outreach or warm leads? Should they be sourcing their own leads?
The more specific you can get in building your job description, the quicker you’ll be able to sort through candidates.
A tip: I don’t recommend hiring a sales manager as your first sales hire — unless you’re planning to bring on a team under them very quickly. Sales managers have worked themselves off of the frontlines and can get frustrated being back in the weeds.
Look for someone relatively early in their sales career, who hasn’t had a shot to climb the ladder yet. They’re still sharp, and can grow into a great sales manager down the road.
3. Determine your compensation structure.
This is a whole article on its own. (Do you want that? Hit reply and let me know!) But here are a few of the most common ones.
Base Salary + Commission (Capped)
- Pros: Provides a stable income while offering motivation through commission-based incentives.
- Cons: May discourage salespeople from putting in extra effort to pursue larger deals, limiting the business's overall growth potential.
Base Salary + Commission (Uncapped)
- Pros: Strong motivation for salespeople to exceed targets, as their earning potential is directly tied to their performance.
- Cons: Higher and potentially unpredictable costs for the business.
Straight Commission
- Pros: Directly ties earnings to performance, motivating sales efforts.
- Cons: Riskier for salespeople, especially during slow periods. Tends to encourage “hired gun” attitudes.
Tiered Commission (Commission rates increase as sales targets or revenue thresholds are met)
- Pros: Encourages continuous performance improvement and rewards higher achievement.
- Cons: The initial stages may be challenging for salespeople.
Revenue and Profit Sharing (A percentage of the total business revenue or profits)
- Pros: Fosters a sense of shared success and encourages collaboration.
- Cons: Less direct correlation between individual efforts and earnings.
Revenue Per Account (A set commission for each customer account they bring in or manage)
- Pros: Useful for businesses focusing on customer retention and relationship-building.
- Cons: There is a risk that a smaller account may be neglected in favor of focusing on larger more lucrative accounts.
4. Interview
Run your preferred interviewing process. I use a modified version of Topgrading to find the best candidates.
Some great questions to ask sales candidates:
- What was their best sale?
- What was the one that got away — and why did it happen? If they blame price be careful – that is often an excuse.
- What is the primary objective of a salesperson? – “Help the prospect find the best solution” is a great answer.
5. Onboarding
I’ve got a whole playbook on onboarding you can check out here. Specific tips for salespeople:
- Provide scripts for everything. Templates, call scripts, objection handling… the goal is not to make them read it word for word, but to teach them how you interact with clients.
- Spend a lot of time teaching your value proposition. It’s the most important part of their job.
- Do shadowing and reverse shadowing. First they shadow you for 1-2 weeks, at every touchpoint — calls, emails, CRM updates, you name it. Then switch, and you shadow them. Give them lots of verbal and written feedback during this time.
- Give them simple metrics to track in addition to their scorecard. This keeps tabs on the upstream health of your sales funnel. Stuff like number of calls booked, number of calls done, number of quotes sent, demos given, etc.
6. Monitor and evaluate.
Learning to sell a new product or service is hard. Even if your salesperson is coming over from a direct competitor, they may still run into issues with selling.
Have a weekly 1-1 meeting to review their metrics, and talk through learning and challenges they’re facing.
Finally, let them become the expert. Encourage them to update the business' existing sales playbook with new learnings and insights.
There’s my playbook for today!
What do you think? Hit reply and let me know.
Michael
