Tag Archive: hiring_decisions

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?by Iris Dorbian.

When David Greenberg launched Parliament Tutors (an academic coaching service targeting students from kindergarten to college), in 2009, he did everything—from sales and marketing to training and recruiting. The multi-tasking paid off because a year later, the twenty-something wunderkind found himself in an enviable position: His startup, whose staff consisted of just himself and an academic advisor, was thriving, having reached $30,000 a month in sales. Upon hitting that figure, the NYU graduate decided it was time to hire his first sales rep.

It was an auspicious move. In January, Parliament Tutors, which now employs more than 500 tutors (most of whom are independent contractors), has four full-time employees and serves customers in 25 states, had its best month ever with sales of $52,000. A large part of that success, according to Greenberg, is attributable to his decision to hire a sales rep.

Still, it wasn’t easy. “Making that step was definitely intimidating because things obviously slowed a bit while [the sales rep] adjusted into his new role,” Greenberg admits. “However, it proved to make sense, while I focused on improving our business model and growth strategy.”

For entrepreneurs like Greenberg, hiring a sales rep can be a pivotal point in a company’s growth. The critical question is: When is the right time to make such a hire? Is it the obvious—when your company starts generating profits and you are unable to meet your business objectives without assistance? Or are there other circumstances that warrant it? Furthermore, how do you train and retain these new sales reps so they will fit in with your corporate culture and not flee for greener financial pastures once another opportunity arises?
Hire when it’s affordable

“New businesses should hire their first sales rep as quickly as they can afford it,” says Michelle Furyaka, executive vice president of NPD Global Inc., a five-year-old executive recruitment firm based in New York City.

However, she acknowledges there’s a catch. “It takes time to find the right personality to work for a small firm,” she cautions. “Don’t be fooled by a sales rep that promises you a lot of business. Small companies struggle to pay a top-notch person and they wind up leaving quickly because they are not used to rolling up their sleeves.”
PQ_SalesRep.jpgFind like-minded souls

For Greenberg, it helps that his first sales rep shared his vision about education and had done plenty of homework about the company well before the job interview.

“When we spoke, he was less focused on the deficiencies in the system, and was incredibly knowledgeable on what was working,” Greenberg recalls. “I was really impressed, considering most of my interviewees focused on the problems when asked to discuss the education environment today.”

NPD Global hired its first sales rep a year after its launch. “We stabilized our expenses and became self sufficient,” relates Furyaka. “Once all operational expenses were covered, we were ready to grow. In the beginning, one of the principals was doing all the sales, but once we reached a certain number and she was needed for another role, we were ready to hire.”

Although NPD Global’s first sales rep did play a key role in growing overall sales, profits were still flat. Management underestimated the total cost of hiring a sales professional. “We found the right person who helped us open a few new accounts, but there were expenses affiliated with him, such as salary, support, and client [costs].”
Analyze your sales cycle

The equation changes if the sales position is a straight commission role, says Tom Armour, co-founder of High Return Selection, which helps small- to medium-sized businesses attract and retain top talent. In this case, the cost can be relatively low.

The length of the sales cycle is a factor as well. “Sales roles vary dramatically across businesses,” continues Armour, an HR executive who once worked at Hewlett-Packard. “Basically there are sales roles that sell products, while others sell services. The length of the sales cycle can vary from one hour to 18 months.” Armour cites retail sales as an industry with a sales cycle that can be completed quickly, typically within an hour, while B2B product or service sales can take months to complete. Longer sales cycle jobs can cost a business 10 percent to 15 percent of new sales, he says.
Time it right

Other than when your company starts growing revenue, when is it time for your small business to hire a sales rep? Here are a few more hints from the experts:

You don’t have the time anymore to generate leads and follow-up with potential or existing customers in a timely fashion.
You are not a skilled sales person.
Your time is better served in working on other areas of your business.

Like a casting director seeking out the right actors for roles, small business owners should be deliberate when bringing on a sales rep that best matches their company’s culture.

Other best practices to employ:

Make sure your first sales hire has values that match your own. “Your first sales rep is going to be the new face and the front line of your business,” advises Greenberg. “Don’t just consider their ability to ‘sell’ a customer.”
Look for people with a solid work ethic. They don’t need to be from the same industry, says Furyaka. “If the foundation is there and they are willing to learn, you will retain them and everyone will be happy.”
Offer competitive compensation and enticing incentives. “A top sales professional can make good money in many businesses,” maintains Armour, “but it is the leadership and recognition that retains them.”

How to hire a family member: It may be harder than you think

Although 80 percent of the world’s businesses are family owned, according to research from Kennesaw State University Coles College of Business, these businesses are not necessarily hiring their own family members. We took a look at the dynamics, benefits and pitfalls of family businesses earlier this year, click here to read more about it. Today, we are going to offer some advice on hiring family members, whether it’s your child, your parents or your spouse.


Many entrepreneurs dream of passing on their business to their children, or just spending extra time with them. In some cases, they start grooming their sons and daughters from a very early age – involving them in product design around the kitchen table; introducing them to clients and staff and even analyzing their playtime behavior for signs of business potential.

If you decide to bring a family member into the business fold, you might want to consider these basic guidelines:

Have him/her work somewhere else
Try to instill a sense of cooperation and teamwork
Recognize that they will need mentors, and that the best person for that job might not be you.
Let your children know that, if they see a future for themselves
If several of your offspring are vying for the same position, make sure you have the fortitude to make the best decision for the company. This might not be your oldest child.


As the vibrant baby boom generation is reaching retirement age, many find they want to continue working. A good number of them are going to work for their children who are small business owners.

If you decide to hire your mom or dad, consider the following before bringing them on board:

Decide if your parent has a skill or set of contacts
Be sure to pay your parent the same amount that you’d pay anyone else in the same position – don’t be tempted to hire them for less than the going rate
Assess your relationship with your mother or father and make sure you’re not in danger of playing out a family drama
If your parent is somebody who has typically overstepped personal boundaries, i.e. giving you unwanted parenting advice, you might want to think twice

Your spouse

It might sound pessimistic: However, the first thing you should do before bringing a spouse into your business is to anticipate the worst.

Consider drafting a prenuptial-type agreement for the business
Recognize that it can be risky
Decide early on how to handle vacation or holiday time
Protect your “me time” by ensuring you keep up with individual hobbies, memberships and friends.

Hiring a family member can be tricky. Keep in mind that for every benefit, there is also a potential downside. Once you have committed to the decision however, sit back for a minute and realize how lucky you are to share something this important with family.

Four Ways to Snag Top Intern Talent

There are a lot of reasons you shouldn’t hire an intern. You shouldn’t hire an intern if you are only interested in free labor. You shouldn’t hire an intern if you need someone with a lot of experience. You shouldn’t hire an intern if you want an autonomous employee. You shouldn’t hire an intern if you need help with coffee runs and filing.

What is one of the primary reasons you should hire an intern? Hire an intern if having one is beneficial to your company and the intern.

Benefits to your company

As a small business owner, hiring an intern can allow you to see if the employee would be a good fit as a future employee. Seeing someone in action – contributing at meetings; participating in company events; accepting constructive criticism and thinking outside the box – is much more valuable than anything a candidate could tell you in an interview. Also, if it isn’t a good match between your company and the intern, you can part ways without feeling like you’ve made a major investment in bringing a new person up to speed.

In a way, internships can become part of your marketing program. Interns can help you spread the word about your business to customers and potential employees, which can be particularly valuable for small businesses that don’t have a lot of money or manpower. Further, if your small business is an active and visible part of a local community, hiring local interns can be a great way to give back to the community that supports your business.

Interns can also benefit longer-term business operations. For several months, a business with fewer than 10 employees can have the experience of managing a larger staff. Further, managing interns can also act as an impetus to spur a business to take a closer look at their operations and ways they can save on labor costs.

Benefits to the intern

According to a recent National Association of Colleges and Employees (NACE) survey, 61 percent of those who underwent a paid internship during college ended up with a full-time job upon graduation.

There are many ways to find an intern, including forging relationships with the career services offices of local universities, posting listings in local newspapers or on LinkedIn, and utilizing the services of a national “matching service” like Urban Interns.

Businesses often look for students from top colleges, with high GPAs, who are majoring in an area that has some affinity with their businesses. Since a lot of these students are snatched up by larger companies, it becomes more challenging for small companies to attract these candidates. However, there are some things small business owners can do to make themselves more appealing than their big business counterparts:

Stress the fact that interns may get a broader spectrum of experiences at a small business, where they can touch on many job functions versus a large business where they may be focusedon one small area.
Pull Quote.pngAssign a mentor who will spend at least 20-30 percent of their work week actively teaching the intern. Have the mentor intervene as soon as they observe issues with work performance.
Offer perks that have a tie-in with your business, such as clothing discounts if you’re a fashion designer, or free courses at a school.
Highlight any community-focused work your company dedicates its time to.

Finally, there are several things to watch out for if you decide to have an internship program:

An internship is meant to expose a trainee to a business area with which they have no previous experience. So don’t make your hiring decisions based on existing skill sets but on qualities you would hope for in any full-time employee – intellectual capacity, work ethic, technical skills and openness to constructive criticism.
Some problems may arise from the age gap between senior employees, who may be in their 50s or 60s and college-aged interns, who may still be in their late teens. These issues could include misunderstandings about the value and appropriate use of the Internet and social media in a business setting, as well as appropriate workplace attire.
When hiring interns there are a number of criteria laid out by the Department of Labor in its Fair Labor Standard Act that must be followed, including some of the following: training must be similar to class work in an educational setting; interns cannot replace paid workers; and there is no obligation to hire at the end of the internship.

That is not to say that you cannot hire your intern if you want. After three months of teaching an intern the ins and outs of your small business, you may discover that you’ve found a valuable long-term employee. Have you ever hired interns? What has been your experience – share your thoughts with the SBOC community below.