In today’s market, it’s common to see small businesses in Singapore having no dedicated salesperson at all. Whether it’s B2B or B2C business, it’s a norm these days for the founder(s) to do everything.
If the business is starting out, it’s important for the founder(s) to talk to customers, understand their pain point and assess the product market fit. But after acquiring the first 5 – 10 customers (especially in the B2B segment) yourself, having a dedicated salesperson is going to add so much more value.
In this article, we are going to discuss the Pros and Cons of hiring a salesperson for a small business in Singapore.
Pros of Hiring a Salesperson
1. Focus – A well trained and motivated salesperson can easily outpace the founder in terms of capturing customer account, especially in SME (Small Medium Enterprise) segment. A daily routine that focuses on discovering new business opportunities, cold calling, participating in networking events, building relationship with customers, building sales funnel and following up with customers require an individual full-on commitment.
A founder typically wears multiple hats, from product development, operation, customer service, sales, logistics, marketing, strategy planning etc. Given the many responsibilities of a founder, it’s easy for them to overlook potential sales opportunity.
2. Work on Your Business, Not in Your Business – It’s easy for a founder to be preoccupied by many things. By taking the sales element out of your plate, you have more bandwidth to look at your business strategically and take it to the next level.
3. Scalability – When it comes to buying business in Singapore, investor or entrepreneurial acquirer will typically prefer a business that can function well without the founder. This not only reduce keyman risk, but it also shows that the know-how is transferrable. A business that relies primarily on the founder unique capability to perform certain task may face an uphill task to scale. Ultimately, everyone has 24 hours, nothing more.
4. Suitability as a salesperson – A lot of founders aren’t cut out to be a salesperson, based on my observation as a Singapore business broker. Even if they may be able to close a couple of deals during the first 2 year, their closing ratio is far from ideal.
A capable salesperson for small business should demonstrate the following traits: Ability to use different prospecting methods with regular iteration, making small chat to establish goodwill, customer profiling, identify and qualify customer needs, following up with customers, closing the deal at an acceptable closing rate.
Cons of Hiring a Salesperson:
1. Significant investment – A good sales hire does not come cheap. A rule of thumb, if you are a small business in Singapore, you should aim to hire someone with at least 3 – 5 years of working experience. Hiring a fresh newcomer will require the business owner to train, and this might not be beneficial in terms of return on investment (ROI).
A competitive salary for a salesperson (3 – 5 years of experience based in Singapore should be around $70k - $120k per annum. (We are referring to SMEs pay scale, not MNC pay scale.) There should be variable component to motivate the person to deliver results. A good ratio is 60/40. 60% of the target compensation should be fixed salary, 40% should be commission/ bonuses.
Fyi, I was formerly a HR with an International Tech firm.
2. Return on Investment – For any B2B sales hire, it typically takes time to show result. Most of the time, a newly hired salesperson will take 3 – 6 months to close their first deal. (Unless they come from the same trade) The time taken to close a deal will largely depend on the industry, product, ticket size, market segment (SMB/ Enterprise), prospect acquisition channel (Inbound leads, cold-call, partnership) etc.
Most salesperson starts to build a meaningful deal pipeline after 6 to 12 months. They would normally be in their most productive period in their 2nd or 3rd year. If you are in a competitive space or starting out a business, a capable salesperson is essential for your long-term success.
3. Time and Effort to Recruit – Most people thinks that it’s easy to hire. While this may be true, to hire a “A player” requires plenty of time and effort to screen, interview and successfully close the deal with the candidate. This can take precious time from your day-to-day task.
Contrary to most HRs or hiring manager practice, I believe that a good hire can come from outside the industry. This can help you to reduce your cost of hire, since candidates from the same industry typically command a premium if they have proven results. Moreover, new sales hire from outside industry are motivated to prove themselves, and may come with certain perspective or experience that can move the needle.
Read Next Article: 10 Effective Ways to Increase Sales for Your Business!
How to Hire a Capable Salesperson?
1. Quantity Precede Choices - Utilize different sources to attract a wide range of candidates. E.g. MyCareerFuture, LinkedIn, JobStreet, Indeed, referral, networking, company career page, existing customers, etc.
Ultimately, the bigger pool of candidates you have, the odds of finding a “A Player” becomes higher. Contrary to conventional practice by SMEs, it’s far more productive to hire an experienced worker than a fresh grad.
2. Be open-minded – The best hire may not come in the form and shape that you expect. Most HRs typically look for the following types of profile when hiring salespeople, but you don’t have to repeat the same dumb mistake since you are the boss!
A – Good looking lady or guy that comes with limited motivation and sales skill. They tend to be agreeable and nod whenever you say something, even though you maybe talking nonsense. Your number 1 priority should be to hire someone that can deliver results.
B – Overprioritizing sales folks from the same trade. While they may have industry knowledge and relevant network, there is no guarantee for their sales performance. You should inquire on how they build their customer base, develop multiple sales funnels, probe on their sales technique, their customer qualification criteria and perhaps even conduct a role play with them. Motivation level, self-learner attitude, communication and diligence are more important than industry knowledge/ network in the mid – long term.
C – Practicing Ageism. Most employers simply give older candidates a miss. I personally find it unethical and unintelligent. There are many older candidates who are highly skilled, motivated and possess sound work ethics.
For SME, it’s a lot harder to attract highly capable job seeker compared to MNC. For companies like Google, it’s common for them to have anywhere between 300 to 1,000+ applicants for most roles. Don’t shortchange yourself the opportunity of hiring a capable staff.
If Donal Trump can be a President of United States for the second time at 78 years old, I am sure you can do better!
3. Unconventional Traits – During the last 15 years, I observed that the following types of sales hire has reaped rewards for their employers. Sales candidates from the Performing Arts. I used to work for an organization that hire sales staffs who are actors and actresses, and they were incredibly effective in selling a niche subscription software to the banking sector across Europe.
I suspect this got to do with their communication skills, vocalisation techniques and people skills since they know nothing about the banking sector. They know how to have fun at work, plus they are lovely bunch of people who don’t take themselves too seriously. They left me with nice memories.
Sales candidates who are single parent. I find that single parents who are working in sales role to be incredibly motivated and focused, given how their life circumstances are. They would go the extra mile for the sales target and organizational goal. They can be resilient and less likely to create drama.
Candidates who are volunteers. People who volunteer tend to be less self-centered, likely to be a giver and able to empathize others. These are important traits for a wholesome human being. Ultimately, sales is a people oriented role and requires the personal buying in from the customers. By having a sales staff who has positive innate traits, you are more likely to experience success from your hire.
In a nutshell, hiring an effective salesperson for a small business in Singapore can be challenging. But this can be addressed by using the right strategy and being deliberate about it. By building an effective sales team, this will provide you a better position, should you decide to exit from your business at a later stage.
Read Next Article: Top 5 Challenges Face By Small Business in Singapore
As a business broker in Singapore, I help business owners to exit from their business profitably. Whether you are looking to buy a business in Singapore, sell a business in Singapore or simply explore Singapore businesses for sale, it’s a good idea to talk to a Singapore business broker.
Comments