Innovate Like a Lean Startup

Enterprise organizations are taking a rigorous look at the principles used in the Lean Startup movement. They are carefully considering how they can incorporate the approach for building and launching new products faster to increase revenues and reduce costs.

Why? Speed of innovation and time-to-market can translate to millions in revenue gained or millions in lost opportunity costs for organizations of every size. One known fact for product-based businesses is that the typical time for market development can no longer take years for planning to launch. Competitive forces require organizations to be in cycles of continuous improvement and a constant state of innovation.

Some businesses acquire other businesses to gain momentum, others set up lean approaches within their product development and design centers. If enterprises want to compete with the "young and restless" entrepreneur community, they need to consider moving faster in definition, development and bringing new products to market.

The father of the lean movement is Eric Ries, author of The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. The Lean Startup methodology promotes shorter product development cycles driven by experimentation and validated learning. Instead of waiting until the final product is "complete" before launch, the lean practice recommends to use iterative releases to confirm adoption and use cases for a minimum viable product.

The constant develop-release cycle provides for ongoing feedback to modify and pivot to meet buyer and user needs faster. The goal for this technique is to speed products to market, maximizing early product adoption cycles and capturing the most market opportunity. This all translates to revenue.

The risks associated to this approach are primarily related to creating products that seem to never be finished. Consumers must have a strong loyalty to stay committed to products that are always upgrading. Businesses have to evaluate the risk-rewards of being first to market with products that are viable and utilize the information gained in the customer feedback process during each release to keep customers happy.

The growing consideration of going lean for many business owners today is whether they do so through an M&A strategy or reorganization of the product development operation. "The only way to win is to learn faster than anyone else.” - Eric Ries

By Jamie Glass, President and CMO of Artful Thinkers, @jglass8

This article first appeared in the CKS Advisors CKS Updates May 2013 Newsletter.  Visit www.cksadvisors.com for additional information.

Innovation Arizona Summit 2013 on June 11, 2013 at the Tempe Center of the Arts

Join us for Innovation Arizona Summit 2013 on June 11, 2013 at the Tempe Center of the Arts 

You will be networking with hundreds of your peers while meeting up with incubators, accelerators, funders and investors, entrepreneur program groups, education and supporting growth organizations. All this and you can enjoy a little noshing and rocking out with a Grammy award-winning artist and his band. Don’t miss it.

Visit www.mitefphoenix.org today for details and to get your ticket to the biggest entrepreneur event of the year! 

Registration is only $25 for the BIG exhibition and main presentations! We have additional breakout sessions with experts for only $20 to get fresh ideas, hands-on-tools and insights on specific business topics that matter to you the most or go to seven special sessions for only $75! 

It all starts at 3PM on Tuesday, June 11. RSVP Now!

Racing to Close the Sale

The sales process provides a road map to follow when you are driving toward winning new business. The course begins with identifying a prospect and traverses through a series of events to the finish line. The intended destination on the map is the “close”. The place where you complete the sale, where you can declare you have won the race! 

All sales people desire the race to be short from start to finish. Sales people hope to navigate around a few laps versus taking a long and winding road trip with many starts and stops. Experienced sales people have the endurance for the longer trek; where as, new sales people often lack patience and the will to stay seated for the extensive ride.

Most “starts” in the race never make it to the finish line. They breakdown somewhere in the process. The early racers may believe they are driving a qualified opportunity, yet fail to make the needs analysis turn or drive off the road at negotiation. By laws of averages and experience, more than 90% of opportunities that start will fail to get all the way to close. No matter the product or service, for every 10 qualified starts only one winner will result.  In other words, nine out of 10 deals will never make it to the close.

Winning or losing creates great anxiety in sales. The race to closing is arduous. Gripping the wheel, staying on course, focusing ahead requires concentration, skill and patience. The better drivers know they need to use their road map and not veer off course. The effort to get to the finish line can be months and even years with large deals. The pressure to close can drive sales people to make some simple driving mistakes.They take shortcuts to get to the finish line, avoiding key road signs that tell you whether you are approaching the finish or have miles and miles to go. Worst, they give up and quit the race.

One of the best indications for assessing how close you are to the finish line is to ask for agreement at every turn. “Are we there yet?”  It is true, the repetitive process of asking “are we there” can get annoying for some; however, you need to identify your road markers.  You need to know how close you are to the end of the race. The only way to know is to ask if you and your prospect are in agreement. You don’t want to end up at the finish line and find out your paying passenger jumped out long ago.

Every turn you make in the sales process requires a pit stop. Stop. Check to make sure the prospect is still engaged, agreeing to the journey and willing to go the distance.  If you fail to engage at the check points, you will mostly run out of gas and never see the checkered flag. You successfully end the race when you cross the finish line with your new customer seated next to you and you both are headed to the winners circle.

“The winner ain’t the one with the fastest car, it’s the one who refuses to lose.” – Dale Earnhardt

Jamie Glass, President and CMO at Artful Thinkers @jglass8

Prepare to Hire a Sales Person

It is the time of year that businesses start to look at their anticipated revenues and question if they can increase the top line with additional sales resources.  A sales person is an investment in your business. Preparing for the role within your organization is as equally important as hiring the right person.

Before you hire anyone, have you created a sales plan?  The sales plan is where you define your revenue goals for the year, the budget for required headcount and support resources, and the tactics you will employ to achieve your goals.  At a minimum, you must define what you are willing to invest into the selling of your products and services for every expected new dollar of revenue.  Once you make this calculation, set your budget based on your investment requirements and expected returns with new sales.

Now that you have your sales plan outlined, here are some steps to help you get ready for hiring a new sales person:

• Sales Role: Will your new hire be a direct, field sales person or an inside sales person?  A direct sales person will have a larger budget for travel and expenses, in addition to higher compensation.  The expense of a direct sales person can be offset by a putting in place a higher quota.  A direct sales person is expected to negotiate larger contracts and develop profitable long-term relationships over the phone and in person.  An inside sales person will conduct all of their selling over the phone. They will be qualifying opportunities, making online presentations, negotiating and asking for the business over the phone.  Inside sales people will have a smaller quota and also typically sell smaller priced products and services that do not require face-to-face presentation and negotiation.
• Job Description:  Create a job description that clearly defines the requirements for the role, responsibilities and expectations of what the sales person must deliver.  Be specific. State the sales goals, types of customers they need to sell and how they will engage with prospects.  Will they be a “hunter” or a closer or both?  Will they need to have existing relationships?  How much experience in your industry?  Note how your sales person will be measured and how you view success.
• Quota and Territory:  Generally inside sales quotas will start at $100,000 to $250,000 in new business revenue per year.  The defined quota will always depend on the sales price.  A direct sales person can be expected to have a quota of $500,000 to $1,000,000 a year in sales.  Again price of product will help set the quota, along with experience of the sales hire.  If you hire someone with no experience in achieving a million dollars in sales, they probably won’t hit a million dollar quota no matter how much they sell you on the prospects.
• Comp Plan and Incentives:  Detail how the sales person will be compensated.  Typically there are three factors in sales compensation:  sales commissions on new business, incentives to exceed quotas and bonuses for quality or quantity.  Define your compensation and commission rules.  When will the sales person be paid?  You can set different commissions for different products, based on profitability.  The average sales commission is 4-8% of top line sales revenue.  One word of advice, the easier the plan is to follow, the more focused your sales person will be on achieving plan instead of trying to figure out when and how they get paid.
• Sales Process:  The sales process defines the steps a sales person will engage to find, qualify, present, negotiate and close a deal.  If you know the process, you can better hold a sales person accountable to how they manage their sales funnel.  It will also provide you data on how many leads you need to support the number of deals you expect to close each year.  Data is your friend in sales.
• Marketing and Sales Support:  Sales people will typically work independently; however, you can shorten the sales cycle by providing sales tools and marketing support to help educate the customer, drive the process forward and substantiate the value propositions of your products.  Prepare a training plan to educate the new hire on what they will sell.  A minimum requirement for any sales person is a CRM tool.  Your prospects and clients are a company asset.  Track and manage the data and make sure it is stored in a company repository.
• Measurable Success:  Before you make the hire, know exactly how you will measure their success.  A sales person, no matter the level of experience, will have a ramp up before they start closing deals.  Your sales cycle can range from weeks to years.  The more complex the sale, the higher price of your products and the more consultative the sales process, the more likely it will take six months or more before you see traction with even the most experienced sales person.  Your only exception will be to hire a person that already has relationships with your targeted customers.  The ramp-up will decrease with selling experience; however, you will pay a lot more for this type of sales person in base and expected overall compensation.  Do the math.  Can you invest more early on to increase odds of higher returns with a shorter sales cycle?

An investment in sales is one of the most important decision an owner makes in the life cycle of a business.  Making a bad sales hire can crush your business.  Prepare and plan for success.  Set reasonable expectations and measure performance.  Sales is a numbers game.  Know the numbers, inside and out.  Know what you spend.  Know what you want in return. Know how the sales person will achieve the sales goals.  Prepare your plan so you know what success looks like and then execute your plan.

“By failing to prepare, you are preparing to fail.” ― Benjamin Franklin

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Entrepreneurial Lessons from Your First Job

We have all had one. A first job. Someone looked you in the eye and said, “You are hired!” The decision confirms they trusted you to represent their business. They were willing to invest in you, train you, teach you how to earn a paycheck.

Your confidence swells with the first yes. Your stride is more brisk, your smile broadens. You did it! You are accepted, wanted and needed. Someone recognizes you for being a contributor. Then, the apprehension begins. What if they don’t like me? What happens if I make a mistake? Can I do this job? The overwhelming reality of being responsible of earning a wage is measured by the sudden onset of nervous excitement.

Many of the emotions and fears of starting your first job are similar to starting your first business. Entrepreneurs have to balance the adrenaline associated with being in complete control with the reality that businesses fail. Lingering in the bravado are facts from the Small Business Administration (SBA) that nearly a third of businesses fail within the first two years. Reverting to your confidence that says “just do it” because you are different and better, you focus on the statistical favor that you do have a 66% chance you will make it.

The first time you do anything is valuable experience. Recalling what you learned at your first job is an excellent way to apply past experience to a new first – starting your own business. Here are some tips to take from your first job that are nuggets of wisdom to apply to your startup venture:

1.  Embrace the Fear of Failing - You have an option to be paralyzed in fear or embrace the opportunity that if you try, you may succeed.  We all know examples of the person who tried over and over again, failing countless times before they finally made it!  They never quit. Using the knowledge of each failure, big or small, prepare yourself for the possibility of next time.

2.  Take Pride in Your Work - Others are counting on you to help them.  Any business is defined by satisfying a need.  If they need you, take satisfaction in your ability to help.  In the early stage of a new business, people will flock to those that are confident in what they deliver.  Uncertainty creates worrisome customers, or even worse, potential customers who never buy.

3.  Always Be Learning - You are glowing green at your first job.  You are a blank slate.  Your training is the groundwork for how you will perform. Soaking up expertise from those that proceeded you is smart business.  What you don’t know today, can propel your business to the next level. Find expertise.  Be a knowledge consumer.

4.  Businesses Reward Hard Work - As you master the skills necessary to do your first job and do it well, you soon learn that businesses reward performance.  Promotions and raises are given to those that work hard and do more than their peers.  Your customers will reward you for your hard work.  Their loyalty is associated to your ability to outperform your competition.

5.  Listening Skills are Important - Listening to your customers in your first job and in your first business is elementary.  Your customer is paramount to delivering products and services that meet the customer’s needs.  Failing to listen increases your odds of an unhappy customer.  Unhappy customers tell others of their experience.  Listening improves potential for high customer satisfaction.

6.  Time Management is Critical - There are no rewards for showing up late or missing work.  One of the most important skills acquired in the first job is how to manage your time.  You soon learn there are no acceptable excuses.  Juggling priorities becomes primary to your success.  Owning a business depends on the genius of multitasking.  You will work harder and that means you have to work smarter to get the job done.

7.  Handling Money Builds Trust - When you take money for any product or service, you are now accepting the currency of trust.  You are expected to provide equal or greater value in the exchange of cash for goods.  Exceeding expectations builds credibility.  Manage others money with the same respect you demand from those that manage yours.

The knowledge acquired from a first job is fundamental to a startup. How you apply that knowledge and skill will often result in similar or better experience as an entrepreneur. The mistakes are lessons of how to do something different. The successes are foundations to build upon.

Challenge yourself to reflect on your first job. What was the best lesson learned on your first job? Can you instill this in your values, culture and standards as a business owner today?

Nothing is a waste of time if you use the experience wisely. ~Auguste Rodin

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Return on Marketing Requires an Investment

One of the most important decisions a business owner or CEO will make is establishing a budget for marketing. Like talent, product and infrastructure, marketing must be viewed as a necessity in business.  Marketing expenditures are essential investments for growth.

An average SMB (small-to-medium size business) will typically set a marketing budget at 4% to 6% of sales revenues.  There are several factors that can impact this budget.  As an example, a well-funded startup may invest 20% of revenues for aggressive consumer acquisition programs and advertising.  Notice, the “well-funded” qualifier.  Likewise, there is always difficulty in setting a budget for a pre-revenue company. Entrepreneurs will often spend most of their investments in product and then struggle to bring in sales. Startup costs must include marketing.  For every dollar invested in product, people and infrastructure, an equal dollar should be set aside for investment in sales and marketing.

Here are three simplified phases for marketing investment planning:

1.  Brand Awareness:  Your marketing investment should start with focus in reach and awareness including brand identity, a website, company advertising and direct and social marketing.

2.  Engagement: The second phase invests in additional marketing programs that support your sales efforts including lead generation, publicity, web marketing (SEO and SEM), market validation, events, advertising, presentations and customer case studies.

3.  Nurture:  Finally, maximize your marketing investments with customer communications, CRM services, loyalty initiatives and nurturing programs to maintain the valuable potential and existing customer relationships.  Once you have them engaged, use your marketing spend wisely to develop and grow your relationship.

After your marketing budget is defined, you will want to establish how you will measure the success of your investment.  ROMI is the acronym for Return on Marketing Investment.  The calculation is total revenue divided by marketing spend.  ROMI = Revenue ($) / Marketing Spend ($).

Some marketing activities such as branding, advertising, PR and social media are harder to track impact and influence. As a rule of thumb, the simple ROMI equation gives you a thumbnail sketch of your return on your marketing investment.  ROMI is a good KPI (key performance indicator) for leaders to use in the business dashboard.

If you are a startup or pre-revenue, the marketing spend will be set as your budget for purposes of forecasting. Some may argue that there should be other factors added or subtracted, such as attributable revenues; however, most businesses have a difficult time tracking every dollar spent on activities such as advertising. Start with the broadest “buckets” and as you increase your marketing reporting and tracking sophistication, you can scrutinize spending with finer analysis.

Marketing is an investment.  Success in ROMI requires budgeting, reporting and analysis in order to fully actualize the benefits.

In lean times, business owners have a tendency to cut marketing spend. Lost time and lack of investment, even during challenging periods, impacts long-term growth. The result may not be felt right away. It is an illusion. Prolonged periods of reduced marketing spend can dramatically reduce sales opportunities. The fewer dollars you put into a marketing budget the greater the exponential impact on future revenues.

Similar to an investment savings account, the more you put into your “growth” marketing account, the higher potential return on your investment. The more dollars spent on high risk marketing activities, the greater risk to returns. Any sound investment advisor, marketing or financial, will counsel a business owner and CEO to invest based on the organization’s risk tolerance.  Marketing investments should be treated like any financial investment.  Know your risk tolerance, invest accordingly.  If the business has low tolerance for risk, eliminate marketing spend in expensive tactics that are difficult to measure. Always diversify your investment to mitigate risk.

In order to qualify for a return, it requires an investment.  Failing to set aside funds to market is failing to invest in business sustainability.  Expectations of sales without an adequate marketing budget is a business built on luck. Though we would all like to be lucky, if you plan to sell something, invest in marketing to create the sale.

“I have a problem with too much money. I can’t reinvest it fast enough, and because I reinvest it, more money comes in. Yes, the rich do get richer.” -Robert Kiyosaki

By Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

Arizona Capital and Business Growth Resources

There are many organizations in Arizona that support innovators, startups, entrepreneurs and the established business community from early stage to exit.

This is an easy to use reference of various groups, associations and service providers in Arizona that help businesses with financing, strategy, venture development, M&A, growth and mentoring services and business networking.

Accelerators, Venture and Growth Advisors

• CKS Advisors
• Tallwave
• Stealthmode
• ASU Edson Student Entrepreneur Initiative
• T-Gen Accelerators
• BioAccel
• Growth Nation
• Arizona Disruptors
• Arizona Small Business Association (ASBA)
• Furnace (ASU)

Investment Bankers (FINRA Registered)

• CKS Securities
• Columbia West Capital
• JDB Capital Partners
• Greene Holcomb & Fisher
• Green Manning & Bunch
• Miller Capital
• Clear Growth Capital

Angel Investor Groups

• Arizona Technology Investor Forum (ATIF) 
• Desert Angels
• Biltmore Angels
• Arizona Angels
• Thunderbird Angel Network

Venture Capital Sources and Funds

• Agility Ventures
• Greyhawk Capital
• El Dorado (Pinnacle West) 
• Epic Ventures
• RCT BioVentures
• Solstice Capital
• Venture51
• Valley Ventures
• Social Leverage

Private Equity

• Alerion Capital Group
• Cave Creek Capital Management
• Canal Partners
• The Miller Group

Incubators - Map

• SeedSpot
• Arizona Disruptors
• Arizona Center for Innovation (AzCI) – UA
• ASU Venture Catalyst
• Center for Entrepreneurial Innovation Gateway (CIE)
• Northern Arizona Center for Entrepreneurship and Technology
• AZ TechCelerator
• MAC6
• Gangplank
• SkySong
• Innovations -City of Chander
• GROWop
• LOT2Labs

Collaborative and Shared Work Space – Map

• SkySong
• Co+Hoots
• Gangplank
• LaunchSpot
• Arizona Disruptors
• HeatSync Labs
• The Lab 137
• Maker Bench
• MonOrchid
• Spread the Weird Studio
• Union WorkSpace

Associations and Support

• Arizona Technology Investor Forum (ATIF) 
• Arizona Technology Council
• Arizona International Growth Group (AZIGG)
• SkySong
• MIT Enterprise Forum Phoenix
• Arizona Commerce Authority (ACA)
• TiEAZ
• 85 Broads Phoenix
• Association Capital Growth Arizona (ACG)
• AZBio
• Arizona Entrepreneurship Conference
• Arizona Small Business Association (ASBA)
• Score
• SBA
• Startup Grind Tempe (Meet-Up)

Pitch Contests & Competitions for Capital

• Arizona Innovation Challenge
• TiEAZ Annual Rapid Fire Angel Pitch
• InvestSouthwest

Chambers of Commerce

• Arizona Chamber of Commerce
• Chandler Chamber of Commerce
• Flagstaff Chamber of Commerce
• Gilbert Chamber of Commerce
• Glendale Chamber of Commerce
• Mesa Chamber of Commerce
• Greater Phoenix Chamber of Commerce
• Scottsdale Chamber of Commerce
• Tempe Chamber of Commerce
• Tucson Chamber of Commerce
• Green Chamber: Greater Phoenix
• Greater Phoenix Black Chamber of Commerce
• Arizona Hispanic Chamber of Commerce

Additional Resources:

• Link to resource about early stage financing terms and options by Startup Professionals Inc., Founder & CEO, Martin Zwilling.
• The Discovery Triangle Innovation Concentration Map of Phoenix-area accelerators, incubators and work spaces.

If you know of an organization that fits into the categories above, you can add the reference in a comment or email jamieglass8@gmail.com.

This list is maintained by Jamie Glass, CKS Advisors, CMO & Managing Director, Sales & Marketing Practice and President of Artful Thinkers.

Ready to Hand Over the Keys to Your Business?

Business owners can easily be consumed by the short term activities of day-to-day operations.  Sole focus on immediate outcomes exposes any business to long-term financial risks.

Every business leader needs to mitigate risks associated to being the one in charge.  The value of a business is built upon the sustainability of the operating plan, with or without it’s leader.  As an owner or CEO, have you asked yourself the “what if” question?  Are you fully prepared to hand over the keys to your business today?


You may have imagined that some day you will be transitioning your leadership to a partner, an investor, the next in line or even family member.  You may see your fabulous retirement life through the eyes of selling your business in multiples above your investment. In order to realize your dream, you need to spend time and commit resources to adequately prepare for a favorable transition. When? Now.

Succession planning is critical to an effective transition.  Achieving optimal outcomes in transitioning a sustainable business requires years of preparation.  How confident are you in handing over control of your business to your successors today?  A successful transition plan gives the new leaders a complete operating manual.  They need to be adequately prepared to operate the business day one.  They need to be able to take your business forward to protect your investment and to benefit your employees, stakeholders, customers and partners.

Some owners avoid planning for the end of the business because of the time it takes away from working “in” the business right now.   The lack of preparedness puts your business value at risk. It is never too early to prepare for an exit.  Whether you are a small owner-operated business, mid-market company or family-owned enterprise, you need a definitive succession plan.  It should be part of your standard business.

Here are some tips on how to start your succession planning:

1.  Document company processes and procedures.  Everyone is not replaceable. Unfortunately, when a person leaves the business they take institutional knowledge.  Key personnel that do not document their knowledge or share it with their direct reports, cost your business long-term and expose you to great risk.  This includes the owners and founders.  You can mitigate that risk by making sure every employee documents their processes and procedures.  Start with key roles.  This is not a job description, it is a “how to” operating manual for every role in your company.

2.  Review your wealth preservation strategies with your advisors.  Meet regularly with your personal and professional financial team members to analyze your current situation and review your short and long term goals.  Be “in the know” at all times of where your business stands financially.  Use strategy and growth advisors to help you pivot the business, so that you can exceed your goals.  Update your business evaluations annually.

3.  Build a culture of knowledge sharing.  Create internal social exchanges and information sharing networks.  Use your company meetings to have one department or key player provide a highlight of their role and what it means to the business.  Reward employees for creatives ways they educate others.  Commit one hour a week per employee for education and cross-training.

4.  Host quarterly strategy updates with key personnel. Spend time with your “next generation” of leaders to share business plans, KPIs, lessons learned and company strategies.  They are the future leaders of your business and they may be executing your business plan.  Keep no secrets.  Share your wealth of knowledge.  Sharing keeps people engaged and actively participating in achieving business goals.

5.  Reward excellence in execution.  Find opportunities to reward performance for those that take initiative and demonstrate they are prepared to lead.  A business full of up and coming leaders, results in sustainability.

Exit planning helps you increase the value of your business today and in the future.  Investors and bankers should ask to see your succession plan.  As you plan your beginning, you need to plan for the end.  Make your investment of time and energy pay off more than you imagined.  Plan today to realize a profitable, rewarding and fulfilling end.

Jamie Glass, CMO & President of Artful Thinkers and Managing Director of Sales & Marketing Practice at CKS Advisors.

A Bad Sales Hire Can Crush a Small Business

The decision to bring a sales person into your business is the most important decision you make as a business owner. Financially, it can be very rewarding or it can be devastating to your bottom-line.  The reality is that your hiring decision can propel you to mega-success, crush your business or land you somewhere in the middle.

There is no absolute science in making good hiring decisions.  Know your associated real and opportunity costs of making a bad hire.  Calculate the risks of the person not working out before you sign the offer letter.  Will your business survive making a bad hire?  How soon will you need to pivot if performance is substandard?

Based on the financial risk assessment, you can qualify whether you should invest in a professional resource or hiring profile tool to reduce the risk.  In other words, decide if you will pay now or potentially pay later.  What else can you do to protect your long-term financial security as a business owner and make an informed decision about hiring a sales person?

Ask candidates questions related to sales activities.  Don’t focus on their industry knowledge.  Industry knowledge is trainable.  You don’t need a nurturer or relationships person.  You need a sales person that will ask for money!  It is the secret skill that will bring revenue in the door.  There are two types of sales people:  hunters and closers.  In the beginning, you will need someone who is good at both.  They will cold call, with or without leads, and they will ask for the close.  These are “rare birds”.  Ask questions about the candidates history with sales cycles, average size of deal, average daily cold calls, number of customers sold each year, and presentation-to-close ratios.  These are all indicators of past performance and predictors of future success.  When a resume lists awards for exceeding quota, that does not tell you what they sold in the past is going to translate.  You want to know what they did to exceed quota.  What activities made them successful?

Invest in training and sales support materials.  Basic training materials should be product feature and benefit lists, industry keyword definitions, product overviews, competitive analysis, market positioning statements and scripts of common objections and how to overcome them. Utilize your team of in-house experts to train your sales people.  Set up daily Q&A sessions with product engineers, marketers, customer service personnel and anyone else that touches the customer.  Share all the secrets, good and bad.  The more knowledge and access to experts the sales person has the better prepared they will be to overcome objections.  The first two weeks of any new sales hire should include at least two hours a day training and practice calls.

Set sales quotes and activities quotas. An experienced sales person may only close 1-2 deals per year, with an average deal size of $2 million.  You need to clearly outline your expectations and what you will inspect regarding number of calls, meetings, presentations, proposals and closes.  Assigning the closing numbers without understanding how many calls that might take will cost you severely.  You must know, for example, 500 calls or 20 face-to-face meetings may result in five closed deals at an average sale of $10,000.  If this doesn’t meet your expectations, adjust accordingly.  Then measure the number of calls to see if you are on pace each week.  Early indicators will provide you the opportunity to pivot quickly.

Know your exit strategy.  What is the maximum time you can invest in a bad hire?  The answer can not be zero, because every hire has inherent risk.  If it is 90 days, then have a very specific plan with measurable key performance indicators (KPIs) that you can inspect every week.  You only have 13 weeks to determine if you will terminate employment or keep on staff.  Sales people are used to 90-day probationary periods.  You should have inspection points with planned exit strategies at 6 weeks, 90 days and 180 days.  Cut sooner and learn from your mistakes.  A year-long bad hire could close down your business if you are not well capitalized and depend on this new hire’s revenue to sustain your business.

Identify the characteristics that could be a threat or high risk to your business.  Character matters as much as sales skills.  You need to adequately assess the “fit” of this person in your business.  You are handing over the keys to your future.  Can you trust this person? Is this a person you would take with you to all your important meetings?  Does this person dream big?  Are they kind, friendly and positive?  Will your customers like this person?  If you can afford a hiring assessment by a professional, with tools that can define their character and skills, it will be worth the investment and potentially save you from making a big mistake.

Do your homework.  Never, ever skip reference checking.  Dig deep!  Ask community and business people that might know the person, look at their LinkedIn connections and recommendations.  Reference and background checks are as important as due diligence when buying a business.  You will be writing substantial checks to this person on a promise.  They will be creating your business first impression.  Reduce the risk by learning from other’s experience.  Again, it may be in your best interest to hire someone to do your reference checking to get a complete picture.

Finally, use your gut.  Do they represent you?  Your professional and personal instincts will serve you well.  A bad hire can scar you and make you timid in making a future decision.  Know that it can take four or five hires to find a rock star.  An early success in hiring a sales person is rare, so have a backup plan.

Sales people can make or break a business.  Know your upside and downside when hiring a sales person to promote your business.

Jamie Glass, CMO and President of Artful Thinkers.  Creative. Strategic. Results.