That really hurt the company and we have just now recovered. The small company risk has been removed going from a little known start-up with $500 K in revenues to a well known industry player, publicly traded stock with a market cap of $2. Our business seller thought his company was worth a great deal and that he should be paid with cash at close for all the future potential his product could deliver. He avoided the big cash drain that a bad sales person hiring decision would have created and he sold his company before a competitor dominated the market and made his technology irrelevant and of minimal value. It might be time to consider the alternative of selling your business. When their firm wanted to make the transition from the early adapters to the conservative majority, the sales cycle slowed to a crawl. Throw on top of that the objection that he has never had to deal with before, the small company risk factor, and the odds of success diminish. So when I look at a company, it is from the sales and marketing perspective first and foremost. If you are only hiring one or two, the likelihood is that you will not get a top performer. If you don't fire him first, he will probably quit when his draw runs out. To hire a good salesman that can handle a complex sale requires a base salary and a draw for at least 6 months that puts him in a better economic condition than he was in on his last job. Current customers are most likely the early adapters, risk takers, pioneers, etc. This client had no sales background but was a very smart subject matter expert with an outstanding background as a former consultant with a Big 5 accounting firm. The soft ware company is doing $3. This is a very difficult decision for an entrepreneur who by nature is very optimistic about the future and feels like he can clear any hurdle. He will not understand how to properly set milestones, judge progress, evaluate performance objectively, or coach the new hire. 5. A lower risk approach is to outsource your VP of Sales or Chief Marketing Officer function. His install base has been increased from 14 to 800.5 million in sales, has a good group of loyal customers, produces a nice income for its owner or owners, and has a lot more potential for sales growth in the opinion of the owner. Finally, this transformation from a core group of early adapters to now selling to the conservative majority elongates the sales cycle by 25% to as much as double his prior experience. That may be a slight exaggeration, but in many instances, a company sale is the best route. We won't do that again. Below are several factors that you should consider when you are at this crossroads: 1. Some light bulb has been lit that suggests that they need to step this up to the next level after relying on word of mouth and the passion and energy of the owner to get to this stage. He did not make the hiring mistake, but instead went the outsourcing of VP of Sales function as step 1. Your new hire is most likely someone that came from a bigger information technology company and may be comfortable performing in an established sales department. Every one of the buyer's current customers is a candidate for this product. When a information technology business owner is faced with that crossroads decision of bringing on a significant sales resource that will be faced with a complex sale and the executive suite does not have the sales background, a company sale may be the best outcome. 80% of sales are produced by 20% of the salespeople. My professional contacts sometimes tease me and suggest that I think every company should be sold. With a well structured earn out agreement and the right buyer, our client will reach his transaction value goals.5 billion. 4. These early adaptors, however, are not viewed as good references for the more conservative majority that needs the security of a Heat Pipe Heat Sink Manufacturer big company backing their product selection decision. That may be the best way to go. 3.Thinking of taking your information technology company to the next level with a major marketing campaign or by hiring additional sales resources? These are decisions that can impact your company's future.

There are a number of highly experienced and talented free lancers that you can hire on a consulting basis that can help you establish a sales and marketing infrastructure and guide you through the staffing process. We are often approached by software company or information technology business owners at a crossroads of taking the company to the next level. For frame of reference, prior to embarking on my merger and acquisition advisor career, I spent my prior 20 years in various sales capacities in primarily information technology and computer industry related companies from bag carrying salesman to district, regional, to national sales manager and finally Chief Marketing Officer. An option that one of our clients chose when faced with the six points to consider from above was to sell his company. They engaged our firm to find them a buyer, but then we encountered the valuation gap. So you are probably looking at $150,000 annual run rate for a decent candidate. It is the rare salesman that can transform from that environment to developing the environment while trying to meet a sales quota. His earn out is based on future sales, but his effective sales force has been increased from one (himself) to 27 reps. For a smaller company with sales below $5 million this can be a critical decision. Meanwhile their technology advantage was being eroded by a well funded venture backed competitor that had struck an alliance with a big vendor. If you have not had a formalized sales effort before, you are probably lacking the sales infrastructure that your new hire is used to. The buyer, on the other hand, wanted to pay based on a trailing twelve months historical perspective and if anything was paid for potential, that would be in the form of an earn out based on post acquisition sales performance. You know this one. 2. The 80 20 rule of salesmen. The decision in most cases is whether they should bring on the one or two hot shot sales people or channel development people necessary to bring the company sales to a level that will allow the company to reach critical mass. I am sure that if I had a public accounting background, I would look at my clients through those lenses. The natural inclination is to bite the bullet and bring on that expensive resource and hope your staff can keep up with the big influx of orders. The reality is that in most cases the execution was a very expensive failure. So with that backdrop, let's look at what might be a typical situation. I have either spoken with more than 30, primarily technology based companies over the years that have faced this exact situation and can count on one hand the ones that had a successful outcome. With all this going against the business owner, most of them go ahead and make the hire and then I hear something like this, "Yes, we brought on a sales guy two years ago who said he had all the industry contacts and in nine months after he hadn't sold a thing and cost us a lot of money, we fired him. 6." What are the alternatives? Certainly strategic alliances, channel partnerships, value added resellers are options, but again the success rate for these arrangements are suspect without the sales background in the executive suite. The president of the company and decision maker has no sales background so the odds of him making the right hiring decision are greatly diminished. and are not afraid of making the buying decision with a small more risky company. Proper contact management systems, customer and prospect databases, developed collateral materials and sales presentations, sales cycle timeframes and critical milestones and developed competition feature benefit matrixes will need to be developed.