Employing a direct sales force is a costly proposition. If you have already run your numbers, you already know that you need to provide an attractive base and a nice bonus package to attract talented and self-motivated sales professionals. The carrying costs also include the reimbursable expenses to support them such as a car allowance and other reimbursable expenses. You must have the infrastructure to support the team whether it is a team of 5 or 25, and the cost of payroll, benefits, taxes, and insurance are all reasons why some companies prefer to remain small. They never test the boundaries of what is possible, and they never take the risk to create exponential growth. These companies will also never experience the multiple value that their company deserves.
There are many examples of when deciding not to build up a sales team, is the best decision. For example, your product is so specialized that people come looking for it and know where to find it. Another example is that your services are based on expertise that is not easily reproducible and therefore rate limiting. You can sell more but not provide more. As the key business decision maker in your organization, you are in the best place to make this decision. These examples, of course, are exceptions, as most organizations with excellent products and/or services have built scalable growth into their business models. They believe they have an excellent product or service and believe the benefits of such will produce the revenue needed to support an appropriate number of sales territories. The usual questions are always how large are these territories and how many clients represent the full potential of each territory. Business decision makers need to build out their assumptions and project valid revenue numbers over a specific period of time, to determine whether I can afford to, or can I afford to not, build a sales team.
Since these may be daunting questions to ponder if you would need to build supporting infrastructure, a sales team, training, all while projecting sales expectations and revenue growth, it might be better to collaborate with an external sales organization. Some companies provide outsourced sales and sales infrastructure that is close to turnkey. They can build the team, support the team, and follow your exact strategy for targeting, selling, and cultivating engagement with new clients. These companies will charge for their services as a percentage of the team’s cost, but they may save you money because they do not have to build internal infrastructure from scratch. You can pre-determine go/no go KPI’s to determine future scale up (make more money). You may reach a level of success; such that ending the agreement and transitioning to permanent employees is the best option. If you think your business model and core products are at the tipping point of accelerated growth, you may want to inquire how an outsourced sales organization can help you build while minimizing risks.
The Caswood Group specializes in outsourced commercial solutions for many types of sales organizations in pharmaceutical/healthcare, technology, and consumer products, for the last 27 years.
