I was asked by Small Business Trends to offer some insight into hiring the first salesperson for a company. My comments are included in the Small Business Trends article “How to Hire Your First Sales Rep.” This is the text of the entire answer I gave Small Business Trends. Be sure to check out their article for more advice from other business owners.
A few years ago, we hired our first sales person (in a long time), and, not knowing what we were doing, it was definitely a learning experience. The biggest hurdle for us was coming up with a proper compensation formula.
We had no idea what to expect in terms of sales the salesperson would be able to achieve. We also wanted to make it lucrative for him to work for us. We initially set a high salary and low commission with a structure in place for that to be swapped as sales increased. The idea was to pay the way during the learning process but once sales started coming in to take him off salary and move toward commission.
To our disappointment, we never hit those benchmarks. Sales were coming in, but not as much as we hoped, and we found ourselves paying a higher commission than we could afford.