You are in business in order to make money, and sales feeds the business engine. The goal is to generate enough sales to cover your expenses and make a profit. If you do not have an understanding of how many leads you need to generate and turn into sales, this can become a cash flow issue very quickly.
As a business owner, it is important that you understand where your leads are coming from and what the potential is for them closing. In addition, those that do not close you will want to have an understanding of why they didn’t close? Hopefully, this article will provide you some insight into how to create and track your sales pipeline for your business so that you are able to keep an eye on your profitability.
Develop Your Sales Process
Whether you document this or not, every business has a sales process. Typically there will be similarities within industries, but in many cases, a sales process can be different for every business. So you ask what is a sales process exactly? A sales process consists of the steps that you follow in order to take a cold lead either to close whether that sale is won or lost. There is no right or wrong process; it is about what steps you find work the best for you and your sales people in being able to “win the sale.”. It is also important to understand that not every sale will go through every step of your sales process, and others will require that you follow each step. You may also have several sales processes within your business depending on the type of product/service you are selling or based on the target customer.
Example: Company A has a product that can be sold to the following.
Developing Your Sales Funnel
Once your process steps are defined, you will want to assign percentages of probablity to close to each process step. This will provide you with with a view of the progression of the sales and their potential for closing. This step may take you some time especially if you are just starting out or are not currently tracking the progression of your sales today. The idea is about understanding how many leads you need to make the sales you have forecasted for your business and the progression through the funnel to become a closed sale. The further the lead progresses in the sales cycle the better the chance you have of it closing.
Over time you will be able get a clear picture of your sales probabilities and closure ratio. If you have 100 leads and 30 turn into sales then you have a 30% sales closure ratio.
The calculation to determine the amount of revenue potential in your sales funnel will be:
Depending on the business, some will build their sales process, probability percentages, and funnel based on what they feel are qualified leads, and others start at the lead phase because there is some qualification done prior such as web form which collects qualification information.
Tracking & Reporting
If you are performing the sales function or you only have 1 person responsible for sales within your business, this could be as easy as creating Excel spreadsheets to keep track of the information needed:
If you have several people responsible for sales within your organization, it is highly suggested that you invest in a CRM (Customer Relationship Management System). There are many systems out there to choose from depending on the level of functionality you require. There are a few that have a free version for 2 licenses and others that offer limited functionality. Here is a list of three which I would recommend for small businesses that only have one or two people looking after sales.
As your business grows, it is important that you have a handle on sales within your business to understand how your business is performing and if you are generating the expected sales that you need for your business. If you are not tracking your sales, then you do not really have a good handle on your business, and this is when many businesses end up in financial trouble.
There are other side benefits of tracking your sales processes, probability percentages, and pipelines that will help you run your business as well. Here are just a few.
This article focuses on sales but is just one area where it is important to understand the workflow, processes, and measurements that need to be in place to know the pulse of your business. Generating revenue is the most important task within any business because, without revenue, there is not a business. Start setting up your sales processes, probability percentages, and tracking before you begin hiring salespeople into your organization. What you will find is that you will modify all of this over time as you uncover ways to increase your probability of closure and need to add more steps in your sales process to in order to do this.
Our Prior Manual Proposal Process
Not unlike many of our clients, until a few years ago we managed our proposals and contracts manually and was not the most efficient way to keep track of our sales deals won and lost. We would get a client that would contact us and ask us for a proposal for a particular engagement. Though we keep copies of past proposals, it was still like everyone became a little project unto itself.
We would first understand the client’s requirements and what engagement or engagements worked for them. Then we would complete a customized proposal that utilized some semblance of a template but found still that every proposal ended up being very different. We would then go into our CRM and create a deal set at the proposal stage. We would wait a couple of days and then contact the client to determine if they would like to move forward. It the answer was yes, we then would send out a contract and wait for them to sign it and scan it and send it back. Next we would go back to our CRM which is HubSpot and mark the deal as closed, countersign the agreement and scan them back a copy for their files.
The Light Then Went Off
We started working with a client on the west end of the GTA, who was a manufacturing company, and they were looking for a combined configuration, quotation/proposal system. They liked the one they were using, but it did not include a configuration system which was greatly needed to improve their productivity and also help them with inventory management and planning of shipping. It was a business that had outgrown many of their current systems.
As part of this process, I discussed with one of the owners regarding the vendor they had, as I was looking for a proposal software solution at the time. She spent time explaining how they had used the software and sent me to the site for the business. I was thrilled as not only were they a cloud computing solution, but they were also Canadian.
Why We Chose Proposify
We were able to create templates for our proposals and develop content in the content library for all of the standard sections of the proposal including our contract which is added as part of the proposal. The proposals can still be customized with a section for the client's requirements, but the other sections that are standard can be pulled in from their content library and can be created once and be updated in one place. There is also versioning so you can go back and see when you have made changes.
There are quoting capabilities if you are providing prices for products or services and do not need a configuration tool. You can provide the client with multiple options for a client and let them choose the products and/or services they want and have it calculate the price based on their choice for the overall proposal.
It stores basic contact/company information that can then be embedded using custom fields and variables which makes it easy to customize your proposal and contract. You can then choose if you want a client to digitally sign the agreement at the end or have them initial important pages.
Proposify supports adding video content to your proposal if needed as well, though we haven’t used it as of yet.
Once you send the proposal to the client via email, they can then click the link for them to go in and view the document online, or they have the choice to download a PDF. You are sent notification once the proposal is viewed as well as when it is signed digitally. We then countersign and send a PDF version back to the client for their records.
The software is easy to use and understand. You can get up and running in a matter of hours. It has helped us in making our proposals and contracts to look more professional and has saved us an enormous amount of time in following up for those clients who sign off on one document.
Before using Proposify, we had to go in and manually add the deal and close it within our CRM. Since we use HubSpot, which is one of the many integrations Proposify has with third-party applications, this is done for us. Proposify creates a company and contact record and adds the deal to our pipeline in HubSpot. If the deal closes, then it will also close off the deal as well.
We also use QuickBooks Online for our accounting package. You are able to generate invoices within Proposify for QuickBooks.
The support is amazing. I tend to like to use chat support. They are very responsive and get back to you quickly which is important when you are having an issue with a document that is sent to your clients. If they are busy while you are online – it will send an email to their support, and you will receive an answer via email later.
They Are Canadian
We always try to find products and services that exist in Canada first and support our fellow Canadians. Proposify has been around since 2013 but is still small enough that it treats customers with tender loving care. If you are Canadian, keep in mind by using a Canadian company, you are not only getting a tax deduction for using the software but will reduce the amount of HST owed as well by buying Canadian.
If I took a poll of small business owners of whom they felt were their most difficult employees in relation to hiring, managing and performance, an over sounding majority would say, salespeople. Having been a salesperson in my earlier career and managed salespeople, I will agree, we are not the easiest group to manage due to personalities and traits that tend to run throughout. On the other hand, we are that necessary evil within your business that can make or break a business. By the end of this article, hopefully, those business owners that feel this way will have a different opinion.
Something else to keep in mind is that a majority of salespeople who have worked for business owners that have this opinion have interesting stories to tell about their tenure in a small business. Many business owners believe that because they hire a sales rep this will solve all the issues in their business and they should hit the ground running. Many are not provided training on the business or given time to get up to speed on the products or services being sold. Many are not managed by someone within the business and given direction. Another thing that is common is that they are not provided with a contract, quotas, and key performance indicators. The ones that are given quotas are provided with unrealistic quotas that were not met before the arrival of the rep by anyone else in the business.
The Importance of Sales Personnel to a Business
Sales personnel are one of the greatest assets to a business as they are responsible for bringing in revenue which keeps the lights on in a business, pays other employees, and funds the business. With that being said, it is important that you hire the best you can find and make sure they are trained, managed and treated with respect within the business, as replacing sales personnel can be expensive.
Hiring Sales Personnel for Your Small Business
Since these individuals are your greatest asset, finding and hiring the right people is going to be key. You need to develop a job description that outlines realistic expectations of skills, objectives, and provide an understanding of salary and commission. Paying a base salary that is peanuts for a salesperson will get you a monkey. If in Ontario, it is now a requirement that they earn minimum wage. If you let them go and they have not earned at least minimum wage, (even if they sold nothing) you will be paying this on their exit.
If you are not experienced in hiring salespeople, hire an outside firm to help you find the appropriate candidates for your business. Use professional sites to list your opening such as LinkedIn, Monster, and Indeed. Do not post a job for a sales professional on Kijiji or a job board.
Once you have found the right candidates, it is well worth the money to invest in someone either inside or a recruitment firm to do a background check, check references and provide them with a sales aptitude test. Having this completed will provide you with the best candidates. Salespeople are good talkers, and most make a great first impression, so it is important that you be prepared to interview them properly to find out if they will fit in your organization and if they have the skills outlined on their resume. If you are not comfortable doing this, enlist outside help. It is important also to look for salespeople that have sold similar products or services. Just because someone sold cars last week does not mean he or she can sell industrial products this week. They may, but there may be more of a requirement on you for additional training. You need to hire someone who is comfortable dealing with your target customer. For example, high tech or industrial salespersons usually have some level of technical knowledge in the industries they have sold. Very different than someone selling retail commodity products.
Once you have found your top candidates (2-3), you will want background and reference checks performed and have sales aptitude tests performed to ensure the best hires. For the individuals that you send an offer, you should have an employment contract that includes points related to the position including quota, salary, commission, bonuses and key performance indicators that are going to be measured. Contracts should be vetted by a corporate lawyer or paralegal who has experience with employment and sales contracts.
On boarding and Managing Sales Personnel
Before hiring a salesperson, it is important that it has been decided who will manage them. Managing salespeople is different from other employees as they are generating the revenue for your business. You need to have someone who can take the time early on to make sure the individual(s) are trained on your products and services as well as how the business functions. You also need to make sure they have the proper tools to track and manage leads and have a defined sales process already in place.
Salespeople should be providing your forecasts and progress reports on a weekly basis and informing the sales manager (usually the owner) of their progress and where leads are in the sales process. Salespeople should be treated and feel a part of your team, as they are one of the essential assets to the success of your business. They should understand the company vision and mission and know what goals and objectives you have set for the business since you are relying on them to meet most of them.
You also want to make sure that if you have multiple sales reps that you ensure equal and protected territories, You do not want to cause conflict between your sales reps fighting over the same business. That will frustrate them and is a waste of their time and hurts your business as well.
As with any employee, you should be performing regular performance reviews. It is important for them to get positive and constructive feedback as well as them having the ability to tell the owner or sales manager what issues they are facing. As with any employee, if there are issues that you are having with the salesperson, they must be documented, and there must be a corrective plan of action. Just getting rid of someone because they are not selling is not good enough. You need to make sure that you did your part as well and provided help. Too many times, we have seen businesses who are not truly ready to hire sales personnel. They do not have the proper processes or training in place or have people with the time to manage.
We have seen too many times where we have been brought in to a business to deal with sales personnel employee issues to find out that due diligence was not performed before hiring. They then were brought in, were given a desk and a phone, ignored, and then there was confusion about why they were not performing.
Are there times that you feel you are working 24 hours a day on your business, but do not believe that you are getting what needs to get done accomplished? Do you at times feel overwhelmed? If this is the case, you are most likely experiencing what most small business owner have experienced at some point with their business. This experience is usually a symptom of working too much “in” your business versus “on” your business.
It is not uncommon to have worked to grow your business to a certain size, but become stagnate and have difficulty in jumping to the next level of growth. If you are trying to figure out if this might be you, then here are a few characteristics to determine where the differences are regarding working “in” versus “on” your business. This list is not all inclusive and you can probably add a few lines yourself.
As a business owner if find you are spending too much time “working in your business” and not enough time “working on your business”, you can turn this around, but understand this won’t happen overnight. In some cases, it will take letting go of some of the power and delegating which means you need honest and capable employees. You might have to employ a different mindset which at times is hard, but will be key to your success. As a business owner you need to focus on the top line revenue, margin and expenses and make sure that you have the right people, processes, and systems in place in order to help you manage this and make the right decisions.
The Importance of an Accounting System and Chart of Accounts
Most business owners, when they think of financial statements, think of the compiled statements that their accountant produces at the end of the year for them. In some cases, these were created by providing them a box of receipts and in other cases they were produced from your accounting system. In many cases, we find business owners are not looking at them unless they need them for financing or providing to their bank which is insufficient.
Financial statements provide a view into how your business is performing and should be looked at more than at the end of the year, because at that point it may be way too late to react to less than desirable results.
This is why it is important that you have a professional accounting system such as QuickBooks, Sage, or even one specific to your industry. Once you have the system, it is important that you have your Chart of Accounts set-up for your business. You should want to see a breakdown of your revenue by product or service lines, target markets, sales channels, or maybe even geographies. The same is true of your Cost of Goods. It may be important down the road to understand the cost of raw materials, packaging, labour, shipping, or anything else that is included in your costs; especially if you want to understand how each product line contributes to your profit or loss. Expenses within a business tend to be the same across industries. Setting up accounts for your balance sheet should be very specific to your business.
If you are not sure how to set a chart of accounts up for your business, ask a professional for help.
If you are putting receipts in a box and printing bank and credit card statements at the end of the year along with invoices and providing them to your accountant, you are not managing your financials and this is where we find businesses end up in trouble.
Keeping your Bookkeeping Up to Date
Once you have an accounting system, it is important that you keep the information up to date on a monthly basis. Broadly this includes invoices, expenses, and purchases. For other businesses this can include job costing and inventory as well.
Bookkeeping is not a data entry job, it requires someone to understand the chart of accounts and have some understanding of accounting principles. Most small businesses do not need a full-time bookkeeper and in many cases they can get by with a few hours a month based on the number of transactions their business has. Speak to your accountant, as many firms have bookkeepers on staff and for smaller ones, we find they usually have one or two bookkeepers that they have worked with and can recommend. A good bookkeeper can be a business life saver.
If you are not keeping on top of your bookkeeping, this is where we find businesses run into trouble with paying GST / HST (depending on province) and payroll taxes. You may be small enough now to pay annually for GST/ HST, but at some point you are going to be required to pay quarterly and if you do not know what you have earned, if you are not tracking this closely, you may not have the funds to pay which paying late can result in fines and interest. The CRA (Canada Revenue Agency) are very unforgiving when business owners and operators borrow their HST funds for other business purposes – this is considered “trust funds” and should be allocated to any other use than remitting to the CRA.
The Importance of Finding a CPA
As a business owner, you want to make sure that you find an accountant for your business that has a CPA designation and has experience in performing assurance exercises and filing taxes. Just as with any professional that you hire, you want to make sure that you feel comfortable with the individual and are able to sit down and talk to them about your business. Just like with any professional you hire, you need to perform due diligence. Different firms will have different focus areas and designations of accountants with specific expertise. Make sure you find one that meets the needs of your business. In some cases, there might be accountants who focus on particular industries as well.
Too many times we hear from clients that they drop off their books once a year with their CPA and pick up their statements and taxes once completed and never speak to their accountant. As an owner, it is up to you to build a working relationship with your accountant and meet with them to get their advice. They are professionals, so this is not a free service, but is an important one.
Running and Reviewing Monthly Reports
There are reports that as a business owner you should be running on a monthly basis to understand how your business is performing. At minimum you should be running the following reports.
Having Compiled Statements Developed
Every incorporated business should have compiled statements developed by a CPA. The level of compilation is dependent on your requirements. In most cases, most businesses have a Notice to Reader performed. In the case of Notice to Reader statements, your accountant is relying on your books and what you provide them to be accurate and the covering letter will reflect this. If you are having them performed as a management exercise, Notice to Reader statements are adequate. It is important if you don’t understand the statements that you ask your accountant to sit down with you and go through them with you. Too many times we have clients tell us they have them done every year, but do not understand what they are telling them about their business.
This is also why it is important to review statements within your accounting system monthly , as compiled statements are after the fact which means they are completed and there is not anything that can be done to alter what has already happened. It is best to catch it early and make the necessary changes, so there are not any surprises at the end of the year.
For businesses who are looking for financing or investment in their business, a bank or a lender may want Reviewed or Audited Compiled Statements. These two assurance exercises perform more due diligence by the accountant on your books to provide a stakeholder an assurance that the financial statements being presented is fairly accurate. What is required will be dependent on your credit rating, the amount you are looking to borrow or have invested, and your past history with the financial institution. Only Licensed Public Accountants can perform assurance exercises such as Reviews and Audits.
There are several ratios that as a business owner you need to understand about your business, because when you go to a bank in many cases it will be these calculations that will determine whether you get approved for a loan or not. It would be better to know ahead of time before approaching a lender that you do not qualify versus waiting to be turned down. If you have your compiled financial statements, then you can calculate the ratios for yourself.
As a business owner, it is important that you have a good understanding of the financials of your business . If you do not have a good understanding of how your business is performing or where there are potential issues and where to look, it will be difficult to move your business forward and meet the goals that you have set for your business.
If December is your year-end, it is now time to develop a budget for your next fiscal year. A budget is not that difficult to do and is there to help guide you, not to constrain you and your business. An actual budget does not just look at your income statement, but also on your balance sheet.
If you have been in business for at least 2-3 years, you should have a run rate and understanding of your annual growth each year. Forecasting not only looks at your prior years and seasonality, but also should look at the plans you have in place for generating new or increased revenue next year, which could include a new product, new pricing, or a new channel to market. The forecast should also include any expected income from customers in the new year.
Cost of Goods
Depending on your business, your cost of goods sold is most likely going to increase which includes raw materials, labour, and inbound shipping associated with selling the finished product to the end customer. It is vital to plan for this as it will affect your margin.
To budget for your expenses, you will need to have an understanding of the changes that will occur within your costs in the next year and see how this will affect your bottom line. With the changes in the minimum wage, your payroll expenses are going to increase. Once you have completed your marketing budget, this should be input into the expense line as well, along with any other changes such as increases in rent, utilities, or insurance for example. You will need to account for any new headcount or expenses that you may plan to spend this year versus previous years such as travel.
Balance Sheet Items
If you are developing a budget, you have to look at your balance sheet as well as your income statement items. Here is a list of a few items on your balance sheet that need to be planned for and have an understanding of how this affects your cash flow monthly.
IIf you ask 20 people, "What is a marketing plan?", You will get 20 different answers. Most refer to a marketing plan as a promotional plan which are the marketing activities that a business executes to to generate leads and revenue.
In reality, a marketing plan is much more than that, as a promotional plan without re-looking at the other 3Ps can end up not being as useful as it could be if you look at your overall marketing. It is also important to look at your branding and your target market as well. It is vital to develop a budget for the next year as well to determine how much you plan to spend as well establish the metrics that you are going to track to determine the success of your spend.
Product looks at the products and services you provide to consumers or businesses. It is essential to look at all of the products and services you sell and determine if there are ones that are not making money for your business are not sold on a regular basis and decide whether they should be discontinued.
At the same time, you should be looking to determine if there are additional products or services that make sense to add to your business.
With some of the changes that are or could occur over the next year or so with minimum wage increases and possible modifications to NAFTA that will affect businesses, it is going to be essential to relook at your pricing. You cannot wait until legislation is in place and make a drastic change to offset your costs. You are going to need to look at slowly increasing pricing over time to not lose customers. All businesses are in the same boat, so be sure to understand if you are going to be able to withstand the changes without an increase in your prices.
Promotion is where you will need to focus on what activities will drive sales to your business and will be important to develop a marketing budget to track what you plan to spend along with what achievements/metrics you expect for that spend. Do you need to update your website, outsource your social media, develop new brochures for new products and services, or look at events that make sense for your industry and business? You need to have an understanding of what you are doing, when the activity will be performed, the metrics for the activity, who is responsible, as well as what is the cost.
Placement is where you plan to sell your products and services. Do you plan to add an online store this year, or look for other channels to market? Placement can help in providing additional revenue to your bottom line and needs to be planned for in advance.
In speaking with several small business owners, when asked who their target market is they will say, everyone. The problem with this is that you are not focusing your market dollars on those who are those consumers or businesses who are best suited for your products and services and are fishing everywhere. Take the time to focus your marketing on those who will generate the most profitable revenue for your business.
Does your brand need some updating? Does your current mission, vision and value proposition still make sense for your business today? Does your branding resonate with your customers? The start of a new year is an excellent time to launch new branding if it is needed.
Human Resources is a very broad but is an area in which we find many of our clients struggle with and require help in their business. Below is a set of tips focused on the areas in which we find our clients ask for the most help.
Organizational and Management Structure
Once there are employees in an organization, it is essential to have an organizational chart which shows the hierarchy, responsibilities, and reporting structure of the organization. Every employee needs to have one boss from where they get direction and guidance. It is not that others cannot prove input, but an employee cannot be pulled in twenty different directions by multiple people, as this will affect their productivity.
Every manager who has employees reporting to them need to an understanding of the responsibilities of being a manager.
Before you start hiring employees, you should develop a hiring process that you expect all managers to follow. What are some of the key components of the hiring process?
If you have employees that are working for your business, it is imperative that you provide an employment contract as this not only protects the employee but you as well down the road. If you do not have an employment contract that outlines rules and policies regarding their employment, do not be surprised when they leave and you find they are working for your competitor and are calling on your clients, you do not have a leg to stand on. Make sure you have a lawyer review your contract, as there is nothing worse than having an agreement that will not protect your business.
As an employer, it is up to you to understand the requirements regarding employees, labour laws, and human rights as they relate to your business and industry. There are many general requirements such as health and safety training, written policies around health and safety, workplace violence and harassment, as well as accessibility, to name a few. There are some additional ones that are specific to industries or business types that will need to be understood as well.
As a business, it is up to you to file and pay payroll taxes (employee and company) and know how much WSIB or equivalent is required for your industry/business type. Failure to submit payroll or WSIB (in Ontario) can result in harsh fines and interest and can put your business in jeopardy.
Employers need to understand the rules concerning part-time, full-time, and contract employees. If you are not sure, check with your accountant or corporate lawyer. You cannot hire a contract employee to avoid paying payroll taxes. There are a set of tests that the government checks for and if you have a contractor that is really an employee, you will be responsible for all back payroll taxes and in one case we saw CRA make the employer pay for the employee’s portion as well.
This article is not an inclusive list of Human Resources, but are the ones we find are the areas where many small businesses have issues and need help. If you have any questions, do not hesitate to ask us.
This summer we decided to personally move to Southwestern Ontario which also meant a decision of moving our business. We have been in business going on eight years, and if we had done this even five years ago, it might not have gone as smoothly as expected. Early on we traveling to client locations locally, even when it was not required. In the last few years, we have dealt with a lot of clients across the province or country remotely utilizing technology that, as well as those that were local, where being on their site was not required. Remote service not only increased our productivity by reducing time in our car but kept the costs for the client down. In many cases, we have had clients that we have not met in person and yet have worked with for years. If this weren't the case, it would have been a harder decision to move to the area we live now as a lot smaller population.
Legislation related to Business in Your New Location
Requirements related to a business can differ from one town or city to the next. Make sure you understand the regulations and legislation related to commercial real estate, home-based businesses if this applies, as well as your industry requirements. There may be local differences in what is required in licensing, taxes, or regulations.
Amending Legal Documents, Licenses, and Marketing Materials
For those that have not moved a business, it is essential to understand what is involved even if you are just going to move to the next town. When you move, you have to change your address on your business license, incorporation papers, as well as WSIB or equivalent, and the provincial and federal government for taxes. You then need to change this on all your marketing materials such as your website, business cards, and any printed material that lists your address. You will also need to change any of your contracts which have your old address.
You will need to notify your insurance company of your move as well and in some cases your insurance could increase or decrease depending on your new location.
Marketing and Your New Location
Once you move your business you have work to do to ensure your business does not suffer and some of these key marketing items are sometimes overlooked. If your website or social media sites are optimized for your local area, then you will need to invest time or pay your web development company to reoptimize for your new location. This will take some time if you are ranked high for your past area. You also need to integrate yourself into your new business area with other business owners and join local networking groups like the Chamber and BNI who can help you grow your business. Get involved in the community of your new business to get the name of the business out there. In many cases, it is a bit like starting over.
Suppliers and Partnerships
Depending on how far you move and the type of business, you may need to look for new suppliers and partnerships in your new location. If this is not the case, it is crucial that you inform both of your intention to move, especially if you have contracts in place.
Updating Customers and Employees
It is vital if you have employees that you keep them informed and up to date on your move. If you are moving a long distance, you are most likely going to lose employees and have to replace them with new ones. If you are just moving the next town over, this will still affect many as could dramatically change their commute to work.
Be sure to inform customers as soon as you can so they are aware of your move, so you retain them and do not lose them as a customer. You want to maintain your loyal customers. You will find customers will travel a little further for products and services to keep the quality and customer service they have with their current vendor.
Updating Your Current Budget
You will need to update your current budget especially your marketing one. If your business situation changes based on location, you will need to reforecast your financials based on the change. Your expenses will definitely change. Be sure not to forget to keep all the receipts for your move, as your move is deductible. Talk to your accountant about this in advance. Be sure to make sure you are investing enough in marketing to draw new customers to your new location.
Moving your business is a big decision, so it is important that you plan the move and be prepared. This is just a short list of key things to remember when you are thinking about moving your business. This is by no means comprehensive and does not include tips for the move itself, but we hope it is helpful to those that are considering the move.
I am not sure how many times a month I hear a client or prospect tell me they hate sales people, they do not trust them, and they do not want to hire them. This is usually after a discussion on how you plan to get your sales increased and how as the business owner, you cannot be the sales person, the marketing person, and the chief bottle washer in the firm. When investigating why they feel this way there are usually similar answers to the questions asked.
How Did You Find and Hire the Sales Person?
In too many cases I hear I found them on Kijiji or this person was the son of a friend of mine and they used to sell something. Ask yourself if you think this is a good standard. A sales person represents your business to your prospects and customers who are key to the success of your business. Does it make sense that you would not hire someone with the necessary skills and experience to represent your business in a professional manner?
Hiring a salesperson is similar to how you should hire all personnel, but with a little extra due diligence. You need to develop a job description that includes the requirements and expectations for the position, the qualifications for the jobs, and the soft skills that you believe are necessary to fit into your business. If you do not understand what this should require, get help in developing a professional job description.
Do not list the job on Kijiji or hire the son of a friend who sold something once. Sales is a profession just as marketing and finance. You cannot make just anyone into a sales person. Use professional job boards such as LinkedIn or hire a recruitment firm that specializes in hiring sales personnel. In many cases, some firms specialize in particular industries. Because someone was a top tier salesperson selling cars does not mean that that individual will be successful selling technical equipment. Sales is not sales – it is industry specific, and the sales process and sales cycle is most likely completely different.
It is also important to understand that the skills differ for direct sales people and those that sell through channels. If you are hiring a direct sales person to run your channels, you may find your salesperson is trying to sell for your channels. If you hire a channel sales rep who is more relationship focused to do direct sales, this could be a skills mismatch. Understand the type of sales person and the skills you need to perform the job.
Once you decide to interview candidates, make sure that you have an understanding of the type of interview questions you need to ask and you do the proper background and reference checking. If you are not sure how to do this, get help from the outside. There is even testing you can have sales people take which can help you for a small fee and is offered by many recruitment firms. They also can help you take care of the interviewing and background and reference checking.
Sales people are good talkers, and we all want them and need to be, but it is important if you feel you are not able to see through the “talk,” be sure to get some help with the interview process.
Before you bring a salesperson on board, you need to have an employment contract reviewed by a lawyer that outlines expectations, probationary periods, confidentiality clauses, quotas, pay & commission structures, and any additional job requirements.
How Did You Train the Sales Person?
I do not know how many times that I have heard it said, “They came in and did nothing and didn’t sell anything.” I then ask, what kind of training did you provide. In many cases they say, none, as they were an experienced salesperson when I hired them.
Someone can be good at selling and understand the requirements for sales in general, but they do not know or understand your products, services, and company. The ownership of training of sales personnel or any staff for that matter about your business and products and services is up to you. The sales process for your products and services may be different from the last ones that they sold, so it is important that you explain how this works in your business.
If you are hiring someone that is out of school that has not worked as a sales person, then it is your responsibility to train them in sales skills as well. You cannot expect someone who has never performed in a sales role to hit the ground running.
How Did You Manage the Sales Person?
Did you make a mistake before of thinking that once you hired the sales person, they would work on their own and would be ready to go out and do their job? Sales people are employees like any other employee you hire, and they need to be managed, but this management is a lot different than other types of employees.
Sales personnel are goal based reward-driven people. They should not have to apologize for this as this is what sets good salespeople apart from low performers. You need to set KPIs (key performance indicators) which are realistic and obtainable for your business, and you or the manager of the sales personnel need to track and monitor performance.
As a manager of sales personnel, you need to provide them with the tools to track their contacts, prospects, opportunities and other key performance indicators that you are measuring. This can be a CRM (Customer Relationship Management System) or could even be Excel Workbooks. There is no excuse for any business not having a CRM today, as there are several that offer free options for small businesses which include HubSpot, Insightly, and Zoho to name a few.
Meeting with sales personnel on a weekly basis is vital whether this is in person or over the phone to get an understanding of your forecasts, pipelines, and issues that they might be having. As their manager, it is up to you to help them in resolving issues and finding out why the forecasts and pipelines are not as expected. Early on there will most likely be the requirement of four-legged sales calls where you accompany them on a sale.
We had a client that was upset that after they hired a new salesperson that they did not hit the ground running. In talking to the owners, it came to our attention that most of their sales to date had been referrals, and through people they knew, so even they had not done “real sales” for their business, and now they were expecting a salesperson to come in and know their business and sell without any guidance, training, or management.
If you find yourself in this predicament, this is when you need to bring in a coach or consultant to help you understand what needs to be done for your business and possibly guide and train your sales personnel.
What Happened When Your Sales Rep Quit or You Let Them Go?
Getting rid of a sales person if it is your choice is harder than other employees, as you have to have shown that you have provided them with goals and set expectations, training, and proper management. If there is an under performing salesperson that you choose to keep after the regular probationary period of 90 days, it will take you 60-90 days to get rid of them if you do not wish to pay severance and the possibility of them taking a lawyer.
For non-performance of sales personnel, you have to provide in writing a notice of non-performance and provide them with 30 days to improve their performance. This needs to be placed on their file. This is the first violation and is why it is important to do this sooner than later. During this period, you as their manager have to show that you have gone out of your way to help them improve performance. At the end of the 30 days, if nothing has improved then you need to provide them a second written notice of non-performance and that if improvement is not seen this could be grounds for termination. In many cases, sales people will have already started to look for another position and will leave before the 60 days is up. If they are still in your business, you need to provide them a final letter stating that this is the final letter and if performance is not seen at the end of this period, they will be terminated. By going through this process and documenting properly, could most likely mitigate and lessen your exposure to legal action and severance pay.
The last complaint that we hear is that the sales person just up and quit on them and took their customer list and gone to the competition. The question they ask is if there is any recourse? In most cases, we find out that there has not been a formal contract where this type of information was outlined as part of their employment contract. Without a contract that outlines the terms of their employment, there is not really any legal recourse.
When it comes time to hire a sales personnel for your business, this will be one of the most important hires you can make. You want to hire the right personnel to represent you and your brand outside your business, so it is important to take this decision seriously and invest the time and effort in bringing the right person on board, training them on your business, and managing them properly so that you have a productive sales force.
If you need help in this area, this is an area where we have helped many of our clients. We can also help you hire other professionals to work with such as recruitment firms for finding candidates or corporate lawyers for developing the right employment contracts and advising you when you need to terminate employment for performance.
RK Fischer & Associates