How to hire your first salesperson | Founders Guide
THERE ARE PROBABLY 100 OTHER THINGS I COULD SAY ON THE HIRING PROCESS, ESPECIALLY FOR FOUNDERS HIRING THEIR FIRST SALESPERSON OR BUILDING THEIR FIRST SALES TEAM.
I get this question a lot.
I want to clarify that I need to know the situation’s specifics before advising founders. I will go too far down the rabbit hole on this topic.
I have helped hundreds of agencies and companies with their first sales hire.
So, if you have a particular question about your initial hiring process, send them my way, and I can be more specific.
Some of you will fail to see the entire picture when hiring your first salesperson, as many startup founders bank heavily on the fact their first sales hire will ramp up quickly and work out.
The other red flag I notice when founders bring me their sales hire questions is a strict focus on the numbers and not enough on the overall sales process and company culture: what you will need from them and what you will provide them.
Remember, you can’t just hire someone and say, “Go sell.”
FIRST SALES HIRE PROBLEMS
Starting the sales organization from the ground up is problematic. It is hard.
And founders taking their company out of the early-stages startup often feel pressured to make the first hire for business development.
They say to themselves:
“I have taken my founder’s sales team as far as I can.”
Usually, that is only half correct.
You’re correct that what has gotten you here won’t get you there.
This is undoubtedly true with sales.
Every new startup and company, large or small companies, have some plateau that they will hit.
For some, it’s at $1 million; others, it’s $5 million. Truthfully, it depends on a few different factors (market, competition, founder skills, etc.).
But to get to that first plateau, it took brute force and passion.
The problem is once you hit it, working harder doesn’t help – it actually makes it worse.
That is where you’re correct. Yes. You have taken it as far as you can – right now.
However, adding new sales tools to your tool belt will give you more mileage and potential for revenue growth.
You have to internalize and commit to building a proper sales organization.
It took brute force and passion to get to that first plateau. The problem is once you hit it, working harder doesn’t help –it actually makes it worse.
That is where you’re correct. You have taken it as far as you can right now.
Failure to see the big picture
This links to my other founder’s red flag: narrowly focusing on the numbers during the sales hiring process.
A startup founder comes to me and says:
“Ali, I am looking to hire my first salesperson or account executive for my agency X.”
- I am offering a $150k package, which pays around $12,500 a month.
- The base is $80k, and the rest is commission.
- The salesperson needs to generate around $25,000 – $30,000 of new work each month to cover their salary and support our business’s back-end operating expenses (net margins are around the 70% mark.)
- If the sales rep brings in 2-3 new businesses at $10,000 a month or sells five packages at $5000, my numbers work out.
“Am I missing anything with this?”
“Am I missing anything with this?”
Sound familiar? I hear it all the time.
You do not see the bigger picture.
What will happen if this sales rep doesn’t work out?
Now, I will not tell you to mitigate your risk (which you should).
However, I will emphasize that failure to see the big picture tells me your desires and outcomes are not the same.
Say you are at that point where you are about to hire your first salesperson.
How will you vet the top talent vs. good salespeople vs. the wrong hire?
Remember, salespeople (even the worst ones) can sell themselves in an interview. It’s not similar to hiring an accountant.
Don’t assume your first sales hire can sell
I say to Founders that assume that hiring the first rep will result in “bringing in 2-3 deals” a month:
“That’s nice, but how will they do that?”
I follow it up with these questions:
- Will you be giving them the leads that are already coming in?
- In effect, are you replacing yourself with this person?
- Or, will you continue to close deals and hope they produce 2-3 deals out of thin air or their network?
The latter is unlikely to succeed, and the former doesn’t allow you to grow. It simply adds a line item on your expense sheet, making you less profitable than in the early days.
There is nothing wrong with that, but founders need to walk into this with both eyes open.
Rose Garden Sales Accelerator Proccess
WHY ARE YOU HIRING A SALESPERSON?
The first question you have to ask yourself is “why.”
You need to figure out the role of the individual in the sales organization. It is the first step to understanding whether you have the right candidates?
Different scenarios and reasons apply to all your sales hires.
So, ask yourself:
- Are you looking for a sales leader to take over your sales department because you don’t consider yourself “Top Shelf” sales talent?
- Are you an excellent salesperson, and you need someone to pass the baton to?
- Do you already have outstanding sales reps, and do you want another top performer in the mix?
All three of these situations get handled differently depending on your situation.
Situation One: Sales Leader
If you are looking to pass on the sales because you aren’t great at it, the right person is more than a great salesperson. You will hire your first sales leader.
This new hire is creative that can train, hire and mentor future sales hires.
This is the most challenging sales role to fill.
Expect to get this wrong several times and pay a lot for it.
Most business owners are in this position looking for this person.
Also, the other thing to note about this person is that while they are a good salesperson, that’s not the main thing you brought them in for; they are a force multiplier.
You have them so they can lead, not close deals. Don’t expect to see much money from sales leaders; instead, you will have to give them money to test, train and hire people.
You will likely have to steal this person from a competitor.
Not the greatest situation to be in, but if you can’t sell, this is pretty much your only bet for business growth.
Situation Two: Sales Prodigy
So, you are a great salesperson and looking to get out of the day-to-day sales business; it all depends on your ability to train and mentor qualified candidates.
You need to consider:
- How much bandwidth do you have?
- How long are you prepared to stay in sales until you can offload it?
You can find someone green, train them up, and get them going in this situation.
As I said, it depends on how long of a runway you want to give this person.
Here are my tips for finding a great candidate.
If you have time:
- Go to your local State College. Get some kid that needs a job that’s in business school,
- Make him work for a year with you.
- Make him do all your sales admin work and make him learn from the ground up.
- This takes time, but you have someone who will do it your way.
If you don’t have time
- Go to a car dealership, furniture store, Edward Jones location and find candidates there.
- Don’t go to another startup. Those kids are spoiled; they don’t have to hit quota and don’t do cold calling. They get free lunch and free sh*t.
My issue with hiring your first salesperson out of a startup is they don’t have to work hard. It’s all inbound leads, order taking, marketing collateral and weak closes.
Find some salespeople who have eaten shit; they will be grateful to work.
Situation Three: Adding more great salespeople
Now, if you have a roster of killers and want to add more, this is a fantastic place to find yourself.
However, you have to be careful; too much of a good thing can be bad as the team grows.
My suggestion for this would be to have an internal referral program.
Get your salespeople to bring in their drinking buddies.
Those are the best because nobody wants to be shown up by their friend.
It adds fuel to the fire.
FIRST SALES HIRE INTERVIEW PROCESS
There are two types of sales reps.
- Good ones who know what their job entails and what they have to do
- The rest.
So, how do you create healthy competition in a sales team?
- Learn the cognitive abilities or work styles of each salesperson.
- Learn their true motivations and desires.
- Use work styles and desire to position members in teams and reinforce behaviors with structures.
I can guarantee you will interview more that fall into the second category than the first.
Before you hire your first salesperson, read the book: Topgrading: How Leading Companies Win by Hiring, Coaching, and Keeping the Best People by Bradford D. Smart.
The book is excellent if you want the top 20%, the middle 70%, and the bottom 10% of all employees to be A players.
Topgrading solves three huge problems across all sales hire departments:
- Rampant dishonesty: weak candidates who get away with fudging their resumes and faking their interviews,
- Insufficient information: most companies use superficial hiring methods that give control to the candidates to control;
- Lack of verifiability: reference checks are practically useless.
I will admit at times, you will feel like you are reading an infomercial with a money-back guarantee.
But in reality, understanding the key concepts in the book will improve your hiring interviews.
The ability to make good decisions regarding people represents one of the last reliable sources of competitive advantage, since very few organizations are very good at it. —Peter Drucker
BRADFORD D. SMART
TOPGRADING: THE PROVEN HIRING AND PROMOTING METHOD THAT TURBOCHARGES COMPANY PERFORMANCE
Key ideas from TopGrading
- Use a “Threat of Reference Check”, a technique to convince candidates to reveal the whole truth.
- Have two interviewers because two are always better than one.
- Ask candidates to arrange personal reference calls with their former bosses and others you choose.
- Other valuable resources include the Topgrading Career History Form and the Starter Topgrading Interview Guide.
Understand these key concepts in the book to improve your hiring processes.
FIRST SALES HIRE INTERVIEW QUESTIONS
Two interview questions I always ask when hiring:
1) What on your resume is a lie?
Inevitably, you will never know the whole story of a candidate’s background.
Most people lie or at least stretch the truth on their resume.
Giving them the option to come clean will show you an ordinary person, but it also identifies those who just wanted the job vs. a straight-up lunatic.
[Look for something on their resume that you are not familiar with.] Explain “X” to me; I don’t know anything about it.
The candidate’s explanation will show you whether they are a good communicator; soft skills.
If you understand it, they are good.
If you do not know what they were saying, they may not fully understand it, and they are not great communicators.
Almost all positions require excellent communication skills to perform flawlessly. This is true when you hire your first salesperson or your fifty-fifth.
Vet their sales skills
You can vet a salesperson outside the interview too.
Here is the best vetting technique for determining their selling ability:
- Take them for a drive in your car, don’t tell them where you are going, give them turn by turn directions.
- Make sure it’s your car. Ensure you take them on the freeway; give them last second directions.
- See how they carry the conversation about sales and the role while paying attention to driving.
Ultimately, this mimics a sales call. It’s the best way to emulate a sales call.
It is a sure technique that highlights their selling capabilities on the spot.
LOOK FOR THIS SALESPERSON PERSONA
This sounds odd but sticks with me.
They don’t brag about themselves; they represent themselves as a humble individual until you come to a point on which you both disagree.
After they tell you and explain why they disagree, they start to ignore you on that topic if you don’t agree with them.
This person has a ‘Cleaner’ attitude if you have read the book Relentless by Tim Grover.
They ask you a bunch of questions at the start.
Then, they seem uninterested in the job and more interested in what you are doing right now!!
This is a hugely positive sign.
Most people will ask you:
- Why are you looking?
- What are you looking for?
The right candidate couldn’t care less about what you are looking for.
They know that THEY are what you are looking for.
Now they are looking to see how they can help.
Rose Garden Team Assessment
The last thing you want is a suck-up
But stop to think about what they say.
If they don’t sh*t talk you, they won’t sh*t talk a client.
Thus never evoking pain. Know this; without that, there is no sale.
But stop thinking about how you felt when they sh*t talked you. Was it abrasive?
If you were left with an uneasy feeling or were upset by it, so will your client, thus no sale.
However, the best salespeople can look you dead in the eyes, tell you your sales process, sales cycle length, or anything else is sh*t, and somehow you feel good about it.
That is the gift of finesse. If they don’t have it in the interview, they won’t have it in front of the potential customers.
PAYING YOUR FIRST SALES REP
Let’s go back to my example of a founder who wants to create a $150k package for his first salesperson.
When founders start here my first two questions:
- Is that Capped?
- Or, is that the OTE?
It may not be what a founder wants to hear, but anyone willing to take a capped total earnings at $150k terrifies me.
I work with high-level salespeople daily; I see their competency level and know a severe shortage of sales talent in all sales roles.
SaaS in San Francisco is throwing everything and two kitchen sinks at salespeople right now that can talk the talk, not even have to walk.
The $150k is just a base for people leading the sales charge in an organization. They usually have some commitment when they work the enterprise deals, plus over-rides on their team, plus bonuses tied to specific metrics plus equity.
Now, I’m not sure what the employment market is everywhere globally, but in the States, it’s insane right now.
I know SaaS in San Francisco is entirely different from a company outside of SaaS. Still, I only bring that up because the market is throwing that out there right now. Most salespeople are looking in that direction.
All said and done; you are looking at a comp package on an excellent Salesperson that is much higher than $150k; that’s assuming you can lure one to leave.
There is a reason why the average tenure of a salesperson is falling daily, and that’s simply because in today’s day in age, people have no clue how to sell, how to close or what it takes.
In short, most people are soft.
HOW MUCH DO YOU WANT TO GROW?
When you want to grow your organization, you have to play to win. Playing to win means thinking up creative solutions.
Do you know how to find creative solutions to these issues preventing progress?
Do you have a clear sales process? Sales cycles? Can you be creative?
Let me be clear, if the solution were in front of you, you would have solved it already.
It’s likely something that you cannot solve without support and help.
About the author:
Ali Mirza is the Founder & CEO of Rose Garden, a national sales consulting organization, and featured in Forbes, Inc, Business Insider, The Huffington Post, Business Rockstars, and The Wall Street Journal.
Ali is a highly sought-after public speaker presenting at multiple national conferences on innovative ways to accomplish transformational growth on your sales team.
Rose Garden provides unparalleled support and guidance to growth-minded founders via sales strategy differentiation, world-class sales culture creation, and exclusive playbooks, processes, and scripts to position them for limitless growth.