What it actually costs to be your own salesperson

The owner is the best salesperson in the business. That's how it got to where it is. It's also why it can't get any bigger, why the pipeline runs like a sine wave, and why a buyer one day will offer you significantly less than you think the business is worth.

Being the best salesperson works beautifully for a while. The owner understands the buyer's problem better than anyone in the business, walks into the room with credibility a hire can't easily replicate, and closes deals nobody else could. Until they run out of capacity. Then the hiring starts. And then the firing starts. Most owners conclude, after the second or third attempt, that salespeople are useless and go back to doing it themselves.

They're wrong about why it keeps happening. The hires aren't the problem. Three specific things weren't in place before they started with you - and one of them is the belief most owners struggle to say out loud, even to themselves. Name those three things and the next hire stands a chance. Skip them and the merry-go-round keeps spinning, the pipeline keeps running up and down the page, and one day a buyer arrives and prices in everything you didn't fix.

If you own an engineering, manufacturing or complex B2B business in the £2m–£15m range and you're still the sales engine, half an hour now will tell you which of the three you've been missing, why your last hire failed even though they looked perfect on paper, and -  more usefully - what the fix actually is. It isn't another recruitment round. It starts somewhere most owners would never think to start, and the owner's own selling gets sharper as a side effect.

Press play now.

Transcript

SPEAKER_01 0:02

In 1418, the city of Florence had a problem. For decades a forty-five meter opening in the cathedral roof had waited for a dome that nobody knew how to build. The conventional method, a vast wooden frame to support the masonry while it cured, would have required more timber than existed in Tuscany. The opera del Duomo announced a competition. Filippo Brunellesi, a goldsmith with no formal training in architecture, won it. Construction began in 1420. Magnificent, isn't it? The dome took sixteen years, used over four million bricks, and still stands as the largest masonry dome ever built. Brunelletsky also designed the machinery that made the work possible, ox driven hoists with reversible gearing, mobile scaffolding that climbed with the dome, a revolving crane for positioning stones at height. The methods were unprecedented in Europe, but he provided no drawings, no construction notes, no written record of how any of it worked. The wooden model he built was deliberately incomplete, a guide for the Masons that left out enough just to keep him indispensable. When he died in 1446, his methods went with him. It took until 2020, 600 years after construction began, for a Princeton and University of Bergamo engineering team to publish the first computational and proof of why the herringbone brick pattern holds the dome together. The building stands as a monument to one man's expertise and to what gets lost when one person keeps it all to themselves. Brunellinski kept that knowledge to himself intentionally. Most owners don't. Not vaulting in masonry, obviously, but their inability to articulate and share their sales expertise causes the same problem for them and their business. In nearly every SME, the owner is an accomplished salesperson. Most have built their business from their own expertise. Maybe they're an exceptional engineer, maybe they know how to design a particular machine, maybe they're absolutely brilliant at managing Facebook acquisition campaigns. Whatever. What that means is when they're out with the client, they have a deep understanding of the client's problem. They've experienced the pain themselves or they've solved it for someone like that, like that prospect, dozens of times. They know how their product takes the pain away and they understand the upsides because they've lived them. They can walk in the shoes of the person they're selling to, and that gives the buyer enormous confidence about the solution. It's a fabulous way to grow the business to get at the seven-figure income. There's only so much one person can do, and eventually they run out of capacity. At which point they decide it's time to hire a salesperson. They advertise, they find someone who has sold before, who has the pattern, and they get blown away by someone's experience and what they promise. That person is the answer to all their problems and dreams.

SPEAKER_00 3:23

They bring them in, hand over the marketing literature and go send them out to sell. And then crickets. Six months later, nothing has been sold.

SPEAKER_01 3:37

Prospects the owner knew they could win haven't been won. The owner can't understand it. The hire is frustrated and both sides blame each other. Ultimately the hire gets fired or quits, and off the owner goes again on the recruitment merry go round. We had one client by the time we came in to help them who had been through three salespeople in 18 months. He'd fired them all. So why do so few sales hires work out for SME businesses? And for me, my experience, I think there are those failed sales hires come down to one or more of three problems. First, the salesperson doesn't salesperson doesn't have a detailed, intimate knowledge of the ideal client's pain and how the product solves it. They may understand the features, but they don't understand the so what, what those features actually change for the buyer. They can't make the rational and emotional argument that closes the deal. They've been giving the mark been given the marketing literature, but not the depth of knowledge that sits underneath it. Second, there's no defined sales process and sales playbook in the business. No stages, no questions to ask along the way, no journey to take the prospect on, no guide to what works and what doesn't. The owner does it all by fail, and the fail is built on years of pattern recognition. The hire has no pattern to draw on, they flounder like a fish out of water. Third, and this is the one most often missed. The owner asks the hire to be both a hunter and a farmer. The hunter is someone who finds new business, they love the chase and the clothes. The farmer is the opposite, they love working with existing race relationships and growing them. They're completely different beasts with different skill sets. People who are good at both are rare. The owner is one of them because if they weren't, there'd be no business today. And naturally the owner assumes that everyone can do both. In case you're wondering, that is not a good assumption. Even within hunting, there's a further split. Brilliant cold callers are usually very good at generating appointments for an expert closure to complete the sale. Expert closures are not usually the right people to be making the cold calls. Finding one hire to do all of it, cold outreach, qualification, demonstration, negotiation, close is like searching for a needle in a haystack. You can find one, but it's usually pure luck. Unfortunately, after trying and trying again, most owners conclude, this is bloody useless. I'm wasting my money on salespeople, I'm just going to have to keep doing it myself. And that's a very damaging belief because it keeps the owner in the business stuck. And when you dig under it, you know, nearly every owner I've spoken to about this is stuck because of one or one or more of three self-limiting beliefs. The first, but they're salespeople, they should know how to do this. They've sold before. Why am I having to teach them? I'm paying them a lot of money to do this job. They should know how to do it. The second is the one most owners don't name out loud because they struggle to articulate what they actually do during a sale. It's so natural to them, so inherent in their knowledge, their approach, their experience, that they can't bring it out in a form that can be taught. It feels like a failure that they can't explain it.

SPEAKER_00 7:21

Some will admit it, quite a few won't.

SPEAKER_01 7:25

The third self-limiting belief about hiring great salespeople is some others will say to me, Yep, that's all very well, Richard, but but what the hell is the sales process? Is a sales process. How do I do it? And that's because the engineer or the creative who built the business has never run a sales function.

SPEAKER_00 7:47

They get the diagnosis, but they don't know how to fix it.

SPEAKER_01 7:56

When owners recognize they need to push past that salespeople or useless dialogue and self-limiting belief, the obvious next move is to up the salary and commission bonus and seek out someone with deeper relevant experience. Either someone who has done the job at the client side or someone who has sold complex products in the same industry. Unfortunately, that doesn't work either, but for a different reason. The industry expert, someone who's done the job on the client side, they carry enormous credibility. They get respect from the people they're trying to sell to. What they don't have is sales knowledge, they don't know how to ask the right questions, how to position pricing, how to navigate the decision processes inside the client. They have the product knowledge depth without the process to go with it. The complex sales specialist is the opposite. They understand process and have great sales skills, but they don't have the depth on your product, your service, the specific pain it addresses, the benefit it brings, the question set to draw all that out. They're used to working inside a defined process with the defined playbook. So when there isn't one, they too fly under. And there's a third trap, even when you do find someone with both depth and process. I had a client who hired a fabulous sales guy, really good at process, lovely bloke, fabulous industry-specific Blackbook. But he'd spent all his time in the industry selling a low spec, low-price product. My clients who sold the high price premium version. The sales guy couldn't cope with the price premium and he couldn't articulate why it was worth paying. He'd been so price conditioned by his old clients he couldn't see the value the premium product created, so he couldn't sell it.

SPEAKER_00 9:55

Now, what happens if you give up and stop there? Because that's an option. The first is that the sales flatline.

SPEAKER_01 10:08

The owner can go out and find bigger jobs, can win bigger contracts, can push the average deal size up, but the volume of conversations they can have and the conversation rates they can stay sustained don't change much.

SPEAKER_00 10:21

Year-on-year growth will slow significantly. May even go slightly backwards.

SPEAKER_01 10:29

The second is what I call sine wave sales, as you can see in this graph. This happens when the owner is the main salesperson, but they're also trying to drive the business, deal with the delivery, deal with strategy, deal with production, deal with staff issues. They focus on sales for stretch and the pipeline fills up and businesses won. Then they get sucked back into the business and the pipeline empties. A few months later, it's oh shit, I have no business coming in. And when that realization hits, they drop everything and get back out selling. The pipeline fills up again. So year on year there's a bit of growth, but when you look at the month by month pattern, when you go into the detail of the year, it looks like this sine wave running up and down.

SPEAKER_00 11:16

Worse, the emotional cost is heavier than the financial one.

SPEAKER_01 11:22

The long hours, the only person driving sales while keeping everything else from falling over, it's tarring, frustrating, emotionally draining. When you're younger and full of energy, that's often not an issue.

SPEAKER_00 11:36

But as you get older, it's much harder to sustain, and your health can take it off. So, Richard, what actually works, you might ask.

SPEAKER_01 11:52

Well, what works is preparation up front. Taking what's in the owner's head and getting it onto paper in a form that can be taught to someone else. That means being crystal clear in a few things. Who the ideal client is, what the problems are, the pain those problems cause, and that's both the emotional and the financial pain. And then the bit most owners skip are the third, sorry, second and third order pains. For example, if a business owner hires the wrong salesperson, the obvious first order pain is the wasted money and salary and commission, and the sales forgone, they'd expect to have won. The second order pain is that the owner has still has to keep selling. Nothing has been offloaded but the stress levels have gone through the roof. The third order pain is that they now have to start the whole hiring process again. More time, more agency fees, more wasted leads. Sales drop while the search runs and they're in a horrible vicious circle. That kind of articulation of the pain, not just this hurts, but exactly how the hurt compounds and the cost it brings is what a new salesperson must be trained on. This hurts simply isn't enough. Then there's the sales process itself. What stages do you take a prospect through? How do you trigger their interest? How do you engage them once they're aware? How do you assess if they're a good fit? How do you convert them into a client? And how do you harness that client's future sales? References, repeats, recurring revenue. I call that the teach model, which you can see here. So it's trigger, engage, assess, convert, harness, and back to the start again.

SPEAKER_00 13:36

Okay, that's part A.

SPEAKER_01 13:40

Part B is being clear of which part of that sales process your new salesperson is going to do and what skill that requires. You are unlikely to find one person who can do everything. So which bit are they doing? And what support are you going to put around them for the rest? Sounds like a lot of work, and it is, but the good news in all of this is there's a double uplift from this work. Once the ideal client and the pain are clearly articulated, your marketing materials get sharper, lead quality goes up, the owner's own sales conversion rates go up, and once the process is written down, a new hire can actually be trained on it. So it's not just that you finally make a new hire work, your own selling as the owner gets better as a side effect. And there are three other benefits on top of that when you fix it. First thing to say though, this is not a quick fix, it takes a year, sometimes 18 months, to get in place. But when you've done the work, you know, so ideally signed articulated, pain points clear, sales process written down, one or two dedicated salespeed against the process and out delivering, three things change. Three extra things change. First, sales become predictable, repeatable, and reliable. It's a bit like a manufacturing process. You know the inputs, you know the steps to follow, you know what comes out the other end. In a business I ran in a previous life, if a 100 leads, you know, 100 visitors walked into one of our showrooms, on average, 33 booked an appointment with our designer in their home. So they 33 out of the 100 left the showroom with a book designer appointment. Of those 33, 55% bought, so around 17 bought at an average sales value of roughly 3.5 grand. Those numbers are slight, you know, they varied a little bit, but we were pretty confident in those numbers. 100 people in went 17 sales at 3.5 grand, roughly. Slightly less consistent than a real manufacturing line. We were dealing with humans after all, but predictable enough that we could forecast our future sales with confidence. Second, that nagging anxiety about where the next sale is coming from goes away, or perhaps more truthfully, it reduces. With consistency of sales and confidence, confidence about what's coming in and when it's coming in, you can plan production against real number. Your stocking, your resources, your cash flow, all of it gets easier. Third, and for me, this one matters more than the first two. It frees you, the owner, up. You stop being the salesperson and start and you start thinking about the future for the business, about strategy, about how the team gets built, about how the business improves, about what it might be worth one day and to whom. You move from the operator to what I call a value architect, the person driving value creation, making the business worth more, making it more transferable, and reducing its reliance on you. If you find yourself in this situation, the first step to fixing it is not building the sales process or even writing everything down. Somewhat counterintuitively, it starts with identifying your ideal client. The tighter you can define your niche, the easier everything else gets. Marketing copy, lead quality, conversions, the questions a salesperson should ask. The difference shows up in the specifics. Imagine you're a doctor specializing in pregnancy and birth, and take two pregnant women you might be considering marketing to. So that's the starting point. Define who you're for tightly enough that the right person recognizes themselves and that the wrong person self-deselects. Once the niche is that clear, a good salesperson can succeed because they know exactly who they're going out to sell to and exactly why that person should buy. That's easy for me to say, but if you're experienced this and you're experiencing this in your business, you're probably thinking, where the hell am I going to get time to write all this down, Richard? I'm flat out doing the actual selling. It's a fair observation.

SPEAKER_00 19:02

And you have a choice. And it's a choice with real consequences. If you don't write it down, you stay where you are.

SPEAKER_01 19:12

Sales keep flatlining, the sine wave keeps happening, and you're not going to magically make a salesperson do what you do unless you can clone yourself. If loaning technology is coming along, you might be alright. Until then, the business does not get beyond where it is today. There's a second consequence, second order consequence. While you're stuck in the sales detail, the market is moving, competitors are evolving, the brains of the organization you don't have time to keep up. You don't just risk flatlining, you risk going backwards. And then there's the consequence nobody wants to think about. What happens if you get hit by a bus tomorrow? What happens if you fall seriously ill? What happens if someone in your family does and you have to look after them for three months? If you're the person doing the selling and nobody else can replace you, sales will drop dramatically. You could even lose the business. And there's also a long-term impact in your business value. Look, all of this is invisible to the casual external observer. None of it shows up in this year's accounts, but it does show up in the year-in-year trends, and it's one of the first things a prospective acquirer investigates. When they're evaluating your business, owner-dependent sales is one of their top concerns. They dig into who's doing the selling, they dig into how predictable, repeatable, and reliable the sales pipeline actually is. They want to know that when the owner steps back, the sales keep coming. If the answer is the owner's the sales engine, they get nervous, very nervous. And they do one of three things. They walk away, it's just too much risk for the time, effort, and cost. Two, they cut the price to reflect what they've discovered, so you take less off the table. Or three, they offer a similar price but a smaller lump sum and completion with the payment balance linked to an earnote, and you staying around for two, three, sometimes five years to transfer the relationships and document what they'll do. And they will make that documentation a contractual condition of the earnout. All the writing down work you've been avoiding for years becomes mandatory on the buyer's timetable with your money tied to it. Callingly, if you'd done the work years ago and you'd have got a better price and they wouldn't have insisted on an earnout. Typically, the earnout itself comes with a financial penalty. Depending on who you talk to, earnouts have roughly a 30% chance of success. If you've been told you've got a million on the earnout, the average realization across deals is closer to 300 grand. The rest gets lost to performance shortfalls, disputes, or change of strategy by the new owner. I'm in the middle of one of these deals right now. We've made an offer to buy a business. Both owners are nearing retirement. One of them doesn't really work in the business, so we'll be able to walk away. The other, we'll call him Jeff, is the key salesperson. The relationships are his, the deal's close because he's in the room, the business depends on him being there. When we're estimating the business's value to us, the key question was if Jeff doesn't stay, how much of this business are we confident will remain? We already know some of the clients and they'll continue to buy from us. But there's a lot of the clients we don't know that we start that we want to start cross-selling to, which is why we're buying their business. But there's a big risk those clients go when Jeff goes. We've told Jeff he needs to stay for two years in an earnight tied to those relationships being transferred to us and the clients continuing to buy from us. If he doesn't want to do that, we're not buying the business. We are not willing to take the risk. If Side is straightforward, if Jeff had two good salespeople in place with the sales process written down and managing those relationships, we've we would have been able to offer him more money up front with a much shorter earn-out and feel much more comfortable about the whole transaction.

SPEAKER_00 23:21

Okay, time to wrap up. Brunelleschi's dome still stands.

SPEAKER_01 23:30

Engineers are still working out how he did it. It's an extraordinary monument. It's also a warning. The building outlived him. The capability that created it didn't. Most owner managed businesses look the same from the outside. Strong, resilient looking businesses that work. The clients are happy, the revenue looks solid, but the sales knowledge that drives it all lives inside one head. None of it has been written down because none of it has needed to be.

SPEAKER_00 24:03

The owner has always been there until the day they aren't. Or want not to be, or have to step back, or want the scale, or want the sell.

SPEAKER_01 24:16

Question, dear viewer, dear listener, is do you want to be Brunelleschi, happy to take all that knowledge to your grave? Are you going to do the work of capturing it, teaching it, and embedding it in your organization so your business becomes more valuable, sellable, and less reliant on you?