One of the most asked questions I get is how many sales people does it take to get the revenue numbers needed. Personally, I believe in large sales forces because in highly competitive situations the largest army wins. That doesn't mean, however, that you can go out and hire 100 sales people if all you can possibly sell this year is a million dollars if everything goes right. So how do you decide how large a staff you need?
The first thing to do is to determine how much revenue you want. I say want because your present staff is getting you what you have and will be only able to grow so much. But if you want to double or triple your sales you will have to increase the number of people selling. It's just a fact of life. So let's say you are billing $2.5 million and want that to grow to $4 million. Your typical sales compensation is 10% commission so your potential commission pool will be $400,000. Next determine what the average sales person in your business should make. One rule of thumb I've used for new sellers is compensation for a 2 year professional just starting out. Let's say $55,000 per year. Well dividing your commission pool ($400,000) by your compensation target ($55,000) would tell you that you need 7 sellers on staff to get to $4 million. What's that you say? You only have 4 sellers and they are making a little more than $55,000? That's right and that's why you are doing $2.5 million. And you will do $2.5 million give or take a few hundred thousand until you hire those extra 3 salespeople.
Of course, the numbers given here are for example only and may differ in your situation. We can calculate the number of sellers in almost every business, however, so call me if you want to discuss your particulars.
Now how much do you want to sell? We can calculate that too but I'll save that for another column.
Mike Shannon is the owner of Shamrock Business Coaching, a coaching practice that helps business owners increase profits. You can visit Shamrock Business Coaching on the web at: http://www.ShamrockCoaching.com.
![]() |
|
![]() |
|
![]() |
|
![]() |
Sex, Drugs & Rock-n-RollHere's the Scenario...You're at a trade show.... Read More
Good sales people can close, but few "step up" for... Read More
Generous Donor RefusedPicture this. You are a fund development director... Read More
Inspiration and Management from Within ? Part 2.The more you... Read More
Exactly what is CRMThe idea itself is nothing new; its... Read More
In the past, if you said the word "plan" to... Read More
The objective of an incentive is to incite action within... Read More
Recently I stumbled across some notes that I had kept... Read More
The old adage in selling has always been, "Find out... Read More
Do you want to make more money?Yes, I guess that... Read More
Remember in the last message we talked about your directional... Read More
If your letter writing and phone calls have all failed... Read More
While there's no easy answer to this question, there are... Read More
Your ability to write an effective and persuasive business proposal... Read More
Few businesses keep tabs on competitors, yet such knowledge can... Read More
Here's the scene. You're at the trade show, having a... Read More
There are four primary activities that successful salespeople engage in... Read More
I recall a heated discussion with a sales director some... Read More
I don't even like saying the word d---------g. I have... Read More
Is lack of sales results, more sales training costs, months... Read More
How high is your sales trust factor?Is it higher than... Read More
Although I never met the man, I imagine Lou Boudreau... Read More
Sales managers are an interesting breed, effective sales managers are... Read More
The best way to get a new customer is to... Read More
Last week I got a call from Jose, who was... Read More
Targeting is the process of selecting high potential customer accounts... Read More
In today's competitive environment, every organization is trying to improve... Read More
Are you involved in projects that seem to go nowhere... Read More
Another key reason why companies suffer from 80/20 performance is... Read More
No matter what you do, it seems, your employees do... Read More
A recent study of 2,663 sales organizations by Think Training,... Read More
One of the major issues that arises in managing a... Read More
In 2000 a computer distributor hired me to help them... Read More
In 2000 a computer distributor hired me to help them... Read More
Imagine you run a pizza parlour. You have all these... Read More
Another key reason why companies suffer from 80/20 performance is... Read More
Q. What's the single, biggest change exhibitors can make to... Read More
It is very easy to fall into a trap with... Read More
How high is your sales trust factor?Is it higher than... Read More
Of the many mistakes small business owners make, a big... Read More
Here's the Scenario...You're at a trade show. Out of town.... Read More
If you have a small business and you are looking... Read More
Bill Borders stepped up onto the podium. He had just... Read More
Inspiration and Management from Within ? Part 2.The more you... Read More
Although I never met the man, I imagine Lou Boudreau... Read More
Increasing Sales by using Coupons. Will it help your business?... Read More
Design and Implementation of a new Sales & Marketing campaign... Read More
Sales managers frequently approach me for advice on how to... Read More
Question: What do the following have in common?- I spend... Read More
There are really only two types of competitor:1. Obvious2. HiddenThe... Read More
Do you know anyone who regularly wins bids? Or can... Read More
Selling. Cold calls, introductions, interviews, appointments, proposals, referrals, call cycles,... Read More
Where is our success? Although there have been improvements, over... Read More
Things to watch out for when selling your product in... Read More
The American Business Journals produces a Book of Lists each... Read More
Workplace ConflictConflict is an inevitable part of business life and... Read More
One of the major issues that arises in managing a... Read More
The best way to get a new customer is to... Read More
Last week I got a call from Jose, who was... Read More
There are four primary activities that successful salespeople engage in... Read More
In the 30-plus years I spent working in advertising and... Read More
For many years as a sales manager, I would only... Read More
In a small midwestern town, the local high school of... Read More
Seeing the results of advertising your business can be like... Read More
Business can be like war sometimes.You may have to fight... Read More
Your ability to write an effective and persuasive business proposal... Read More
Sales Management |