It is great when early stage startups put an emphasis on business development right out of the gate! I’ve managed dozens of commission-based employees over my career, and I can tell you that finding the right candidate with the right attitude for that position can be even more challenging than the actual sale of the product/service itself. Sales in general, but especially commission-heavy sales positions, require a certain temperament and conviction from people to be successful (for themselves and for your company.)
Deciding how to fairly compensate a new sales associate depends on a few factors (whether you are a digital startup or a brick and mortar small business.)
- Is the product/service being sold primarily B2C or B2B? B2C sales usually mean that associates can subsist on their month to month commission disbursement as the close cycles are tighter and payments come in faster. Inversely, B2B sales typically mean longer close cycles and payments coming in over a longer timeline (which could make it difficult for an associate to live month-to-month.)
- How are leads being sourced to the sales associate and what is the overall quality of those leads? If they are being asked to go out and cold-build their own book of business from scratch, it usually necessitates some other consideration other than commission to be included.
- Has anyone gone out and proven sales already for your company/product/service? If you can show success with someone else selling your wares (even yourself as the founder) then the argument for a larger commission-based compensation package could be made.
- Does your sales process require specific industry knowledge, level of education or length of experience out of the candidate? Typically the more sophisticated your requirements are for experience/pedigree, the harder it is to argue just a commission-based package.
The bottom line is that sales people, in general, typically embrace the commission side of their job with open arms; this is because they believe they can own/grow their earning potential themselves with effort and energy. So, if the primary metric for a position is the amount of revenue they can bring in, I would look for those people who are confident and get excited about the opportunity to own their earning potential, versus shying away from it right out of the gate.
If you want to discuss structuring your sales team or other compensation/motivation ideas, feel free to reach out.
The founders need to be out selling. If you can't sell, find a co-founder who can. Unfortunately, that's the only way. It's the same as trying to build a business without a technical co-founder. It's a very bad idea. The best bootstapped startups usually have 2 founders. A technical one and a soft skills one. You are either building something or selling something, there's just nothing else worth doing at that stage.
Make them equal partners and get them involved in a common strategic goals. Let everyone feel it's something you all are building together. And they are doing it for free. Because everyone in a team likes ownership. When you go bootstrapping no one is a leader, but let everyone be an operative
Start to clearify the higher purpose with your business. Then you can adress your purpose and values to other people that has the same values that you and your business have. The inner force can then start to work for you 24/7/365 when you execute on this 5 step-process:
1. Communicate that purpose to people with human-to-human-communications-skills.
2. Secure that does people have high authenticity and love to create quantifiable values to other people. Customers love to speak with honest and authentic people who can deliver on trust, as part of the foundation for a good relationship.
3. Neglecting coin-operated people. Does guys are leaving next time that they get better payd somewhere else, and is often more "me-focused" than customer-value-focused.
4. Create a incentives based on stock options for a fixed price over time, linked to KPIs that drive increased value-sales. Higher NPS (NetPromoterScore) and improving quality and sustainability in all customer dialogues.
5. Eat -> Sleep -> Rave -> Repeat (Rave = Your purpose)
I have been involved in many startups, early stage and mature companies as a founder, owner, director, investor and advisor. I have observed that sometimes the best sales people will will work for just commission only but it must be a big commission and an easy sale. Usually the best sales people want a draw and expenses and other emoluments, and they can command them. If you would like to discuss this further please feel free to get in touch.
GIVE THEM A REASON TO GO TO BATTLE....
Money motivates. Sex motivates. Awards and titles and ego and power -- they all motivate. But NOTHING motivates like passion.
Sales isn't business. It's a god damn reason to burn down villages and conquer new lands. It's primal and bloody. If another dude is going to lay his life on the line for you you reward him accordingly -- you give him part of the booty. Right?
Not everyone is independently wealthy or can work without pay. As an executive in a startup you need to make certain sacrifices to keep the momentum going and hopefully you've prepared for that and have some cash flow to pay your bills. However, you can't expect everyone you hire to live by stock alone. There has to be some compensation as the best people out there should be making money at their current position. You have to find the happy medium of stock and cash flow. If your top candidate is the right candidate they should be willing to sacrifice a bit of cash flow to get in at the ground floor and help the organizations grow.
Proper incentives really depend on the person. Most really talented sales pros that I know are motivated by more than money. They might want upside (in the form of options or profit distributions). They might want the freedom to work weird hours or to not come to company meetings. They might want a base salary, plus commissions, plus milestone-based bonuses. Or they might want commission only with a fancy title and leadership responsibilities. Or they might want a certain percentage of topline profits plus performance-based bonuses. You've got to ask point blank, "What kind of offer can we make you that would be too sweet to pass up?" Then it's your job as the founder/executive to cobble together that offer in one way or another. Cliches still apply: you get what you pay for. A crappy base salary will get you a crappy sales rep. I love strategizing around this stuff, so if you want to discuss in more detail, let me know. Cheers, Austin
Enter your answer partnership, make them a part of the company
Hire part time sales people from low cost countries like India