When should we appoint a Sales Manager?
For many start ups and small businesses having a full time sales
manager in place is not a viable option. Firstly, there is usually no
one to lead and manage in the sales function however, the function of
sales management should be on your ‘To Do List’ as a business
owner/manager even if you are sales managing yourself. Paying attention
to your sales activities and results, developing your sales strategy
and plan, knowing who to target and how to target viable prospects,
mapping your metrics (lead/prospect/sales conversion ratios, etc.),
success rate, development of product knowledge, reporting, proactive
review, and keeping yourself motivated and committed all form part of a
sales manager’s role.
Making sure these activities feature as part of your regular business practices, your way of doing business, from ‘Day One’ means that when it comes time to appoint a sales manager you have the basis of a sales management function in place.
So when is the right time to appoint a sales manager? How many sales people do you need to get to before you can afford a sales manager? Do you need your sales manager to sell as well?
These are some of the critical questions facing many SME’s. In reality the sales management function should be the second most powerful role in a business behind the CEO. The role has considerable power to make or break a business. Effective sales managers lead the charge for sales growth directly and via a sales team. They make important decisions about customer acquisition, growth and retention, entry into new markets and viability of a sales force.
The appointment of a sales manager into your business is one of the most important decisions you will make. Getting it wrong can be catastrophic. So here are some guidelines to help you with your sales management employment plan:
Step 1: Begin with the end in mind
What do you want to see happen to your business in the next 5+ years? How do you visualise it happening? By beginning with the end in mind you can then work backwards and plan your business progression by mapping it out over the next 3-5 years, taking into account your revenue and profit projections, then plan your sales force around these guidelines/goals including the appointment of a sales manager. For instance, I have clearly articulated my business vision over the next 10 years including the next several steps in my business growth plan which includes mapping the size and type of sales team and the type of sales manager I need. With a clear plan in place, I have now gone to market and appointed the first role, a Director of Sales, whose job it is to grow my business and build a sales team around him to achieve our revenue and profit projections via a well established and clearly articulated sales strategy. In the early stages, the Director of Sales needs to be able to sell as well to get the sales momentum going. This way they learn my business, how it works and how to make it better. They know what needs to be in place for an emerging sales team and how to promote and position my business favourably in the market.
Step 2: Create a transition plan
As your business grows you need to plan for growth in your sales team. You can start with a Director of Sales to lead the charge like I have or you can appoint sales people. However, sooner or later you will need someone performing the role of sales manager in a formal manner. You can use the following points as a guide:
- If you have 2 or more sales people you will need someone taking the lead on the sales management function on a part time basis.
- If you have 4 of more sales people you are likely to need a full time sales manager who can also sell into and manage key accounts.
- If you have 8 or more sales people you will need a full time sales manager whose sole function is to be a sales manager.
- If you have more than 10 sales people you need more than one sales manager.
Remember everybody lives by selling something.