WEBVTT 00:01.087 --> 00:02.989 [SPEAKER_02]: This is the sales gravy podcast. 00:03.309 --> 00:08.473 [SPEAKER_02]: Hi, I'm Jeff Blunt, bestselling author, fanatical prospecting objection, sales EQ, and ink. 00:08.853 --> 00:13.677 [SPEAKER_02]: And I'm here to help you open more doors, close bigger deals, and rock your commission check. 00:14.438 --> 00:22.545 [SPEAKER_00]: Describing my experience with bus fee is, so I had a business, and I tried to hire for those folks, and I just hired anything breathing, and it was one of the warm bodies. 00:22.565 --> 00:24.346 [SPEAKER_00]: So I had three sales people. 00:24.386 --> 00:25.467 [SPEAKER_00]: So I went through them real quick. 00:25.647 --> 00:26.568 [SPEAKER_00]: It cost me a lot of money. 00:26.608 --> 00:28.650 [SPEAKER_00]: So right now, I'm just starting from scratch again. 00:28.930 --> 00:40.937 [SPEAKER_00]: One thing I did learn was the sales process as well, has to be in place, because I was the sole sales person before I saw a channel impart that knowledge real time without documenting your habitant place, kind of screw build I guess, basically. 00:40.977 --> 00:48.562 [SPEAKER_00]: So question is, what's the best way to kind of put together that process, where you can bring in to one end and they actually move. 00:49.142 --> 00:52.245 [SPEAKER_00]: want to do how to do it kind of measurable things to do it on. 00:52.365 --> 00:57.790 [SPEAKER_02]: You're describing a major problem with entrepreneurs who are trying to ramp up a sales team. 00:57.810 --> 01:01.753 [SPEAKER_02]: I mean, give you three basic stages that we run into as business owners. 01:02.114 --> 01:05.597 [SPEAKER_02]: And this can happen if you were for a small company and you're responsible for ramping things up. 01:05.617 --> 01:05.717 [SPEAKER_02]: But 01:05.977 --> 01:20.915 [SPEAKER_02]: begins with the entre seller you come in like you're the best sales person you're starting the company you can sell everything and you're cruising you get to the point where you are getting into what the roller coaster face the roller coaster phases that you're selling so much. 01:21.195 --> 01:38.722 [SPEAKER_02]: that you can't service what you're selling so you switch to being the customer service person and managing the process person and managing the business person and then your pipeline dips and then you need more so now all your sudden you're back to selling and you realize after a while it's a really terrible way to live and then you move into the building phase which is what you did. 01:38.982 --> 01:42.524 [SPEAKER_02]: And the biggest mistake in the building phase is that we shift into the building phase. 01:42.544 --> 01:46.906 [SPEAKER_02]: I'm going to build a Salesforce, your desperate and you don't have any infrastructure for it all. 01:46.926 --> 01:48.426 [SPEAKER_02]: Like I have no process for it. 01:48.806 --> 01:51.488 [SPEAKER_02]: And that's because you're in the roller coaster phase. 01:51.788 --> 01:57.930 [SPEAKER_02]: Like in the roller coaster phase at the bottom of the roller coaster, you're desperately trying to get new revenue in because you need cash flow. 01:57.950 --> 01:58.571 [SPEAKER_02]: Right. 01:58.651 --> 02:01.352 [SPEAKER_02]: And at the same time, you recognize that this is unsustainable. 02:01.372 --> 02:03.473 [SPEAKER_02]: So you just hire people and you throw them at the problem. 02:03.633 --> 02:25.127 [SPEAKER_02]: The only way to make this work and this is terribly painful is that you have to block time probably the weekends and you're going to have to do this over a month where you have to walk through and go through how do I do this and this would be like if anybody's read my book sells EQ hardest book I wrote it was just off was excruciating because it was my opus on selling 02:25.607 --> 02:34.416 [SPEAKER_02]: And it required me to get out of my head, I just know how to do it and to build it out into a system that other people could consume. 02:34.777 --> 02:39.441 [SPEAKER_02]: That's what you have to do in really the place to do that is before you get into the roller coaster face. 02:39.541 --> 02:41.924 [SPEAKER_02]: You've got breathing room and you're starting to sell. 02:41.944 --> 02:45.768 [SPEAKER_02]: Now, I'm doing that right now with our digital learning solutions group. 02:45.868 --> 03:04.376 [SPEAKER_02]: So to give you an example, the sales revenue university product, which is for individuals is for small teams when we have it for large teams as well who integrate this into their LMS and we started this off and like 2019 and it's now a multi million dollar business and I have just basically done this through brute force. 03:04.736 --> 03:06.537 [SPEAKER_02]: Now we have to scale up a team. 03:06.857 --> 03:11.518 [SPEAKER_02]: What we've done is we've stopped the first thing I did was hire a leader for the team. 03:11.658 --> 03:22.141 [SPEAKER_02]: The next thing we're doing is that leader is doing what I've done, but they're doing it through a separate lens and they are documenting the process and we're talking about it every day. 03:22.341 --> 03:23.201 [SPEAKER_02]: How does this happen? 03:23.421 --> 03:24.941 [SPEAKER_02]: It's also like with coaching. 03:24.981 --> 03:26.342 [SPEAKER_02]: Walk me through your process. 03:27.282 --> 03:37.132 [SPEAKER_02]: Digging this out and we're documenting it because what we've got to do yummy is when we bring people in and by the way, one of the mistakes I made this year, the $45,000 mistake was exactly what you did. 03:37.293 --> 03:37.953 [SPEAKER_02]: I'm like, run in. 03:37.973 --> 03:39.014 [SPEAKER_02]: I'm like, I got to grow this thing. 03:39.034 --> 03:39.695 [SPEAKER_02]: I got to go. 03:40.135 --> 03:43.018 [SPEAKER_02]: I'm tired trying to manage everything in the process. 03:43.079 --> 03:45.141 [SPEAKER_02]: Our training consulting solutions is going great. 03:45.321 --> 03:49.946 [SPEAKER_02]: So I bring in somebody, throw them at the problem and then I move on to the next thing didn't work. 03:50.306 --> 03:53.329 [SPEAKER_02]: But what I learned from it is exactly what we're talking about now. 03:53.429 --> 03:59.554 [SPEAKER_02]: What I learned from it is that if I don't get a leader and don't get a process in place, we're going to have a problem. 03:59.614 --> 04:03.317 [SPEAKER_02]: Now, if I was a sole person doing all the selling, I would do this in my own. 04:03.337 --> 04:05.178 [SPEAKER_02]: I just got a much larger company to run. 04:05.599 --> 04:11.444 [SPEAKER_02]: So this person is step by step by step by step documenting exactly what we do. 04:11.944 --> 04:13.105 [SPEAKER_02]: What's our sales process? 04:13.165 --> 04:14.326 [SPEAKER_02]: How many calls do we have? 04:14.566 --> 04:16.047 [SPEAKER_02]: What are the objections that we get? 04:16.268 --> 04:16.688 [SPEAKER_02]: Everything. 04:16.988 --> 04:20.631 [SPEAKER_02]: And then we're going to bring our first person in and put them into that system. 04:20.932 --> 04:27.518 [SPEAKER_02]: And what that allows us to do is tell very, very quickly whether someone can succeed or not, like we'll know. 04:27.998 --> 04:30.000 [SPEAKER_02]: And if they can succeed, then we'll move them out. 04:30.020 --> 04:31.121 [SPEAKER_02]: We'll move someone else in. 04:31.161 --> 04:35.245 [SPEAKER_02]: But we don't have to wait until we've burned 45 grand to figure out that we made a mistake. 04:35.405 --> 04:36.526 [SPEAKER_02]: We're going to know that quickly. 04:36.826 --> 04:40.371 [SPEAKER_02]: and it doesn't put the person themselves and trying to figure out how to do it. 04:40.491 --> 04:42.313 [SPEAKER_02]: And by the way, you're a savant. 04:42.494 --> 04:43.555 [SPEAKER_02]: You just know how to do it. 04:43.575 --> 04:45.498 [SPEAKER_02]: Like you know how to sell your stuff. 04:45.518 --> 04:49.803 [SPEAKER_02]: And you try to teach people using your language versus a language they can understand. 04:50.104 --> 04:51.666 [SPEAKER_02]: That's why you need to process in place. 04:51.866 --> 05:06.080 [SPEAKER_02]: I have so much empathy for where you are and this process because I've been there more than once and the one thing that I know to be true is you have to stop, like you literally have got to stop, pull the car over and sit down and work through it. 05:06.520 --> 05:09.643 [SPEAKER_02]: And the only way to get there is to like find that time. 05:09.683 --> 05:10.624 [SPEAKER_02]: I think it's the weekends. 05:10.884 --> 05:14.146 [SPEAKER_02]: Now, if you need some help with it, we do that with larger companies. 05:14.226 --> 05:15.146 [SPEAKER_02]: It was a consultant. 05:15.226 --> 05:16.267 [SPEAKER_02]: That's what I was doing last week. 05:16.307 --> 05:19.008 [SPEAKER_02]: I'm on site and I'm breaking down processes on site. 05:19.129 --> 05:22.090 [SPEAKER_02]: Because as a consultant, it's a heck of a lot easier to do it for someone else's company. 05:22.130 --> 05:23.451 [SPEAKER_02]: That is to do it for your own company. 05:23.631 --> 05:24.892 [SPEAKER_02]: So, that's what you got to do. 05:24.932 --> 05:26.272 [SPEAKER_02]: And I know that's not an easy answer. 05:26.312 --> 05:28.454 [SPEAKER_02]: Like, I might tell on you anything you probably don't already know. 05:28.494 --> 05:31.975 [SPEAKER_02]: And I'm certainly not giving you an easy button to push, but that's the truth. 05:32.336 --> 05:32.836 [SPEAKER_02]: Thank you. 05:33.116 --> 05:35.017 [SPEAKER_02]: And I have a t-shirt by the way that I wear sometimes. 05:35.077 --> 05:38.279 [SPEAKER_02]: It just says failure on it for all the times that I've screwed this up. 05:41.000 --> 05:44.263 [SPEAKER_01]: on a B2B environment and we're talking about financials right now. 05:44.463 --> 05:47.845 [SPEAKER_01]: And I mean, the healthcare space trying to reach out to position practices and all of that. 05:47.986 --> 05:52.189 [SPEAKER_01]: How much of your growth revenues would you contribute to a wholesale team from a budgetary perspective? 05:52.469 --> 05:59.355 [SPEAKER_01]: And also from a compensation perspective, I know that there's always there as your basis littlest possible and all that. 05:59.575 --> 06:01.056 [SPEAKER_01]: What was your recommendation on this end? 06:01.176 --> 06:05.618 [SPEAKER_02]: I don't have an answer to that question, or what part of your gross revenue you used to spend on sales. 06:05.778 --> 06:11.981 [SPEAKER_02]: The answer is going to be getting out of calculator and thinking about where you need to be in terms of sales like why you need to be there. 06:12.001 --> 06:19.764 [SPEAKER_02]: So for example, if you were growing your company and your goal was eventually to say sell your company, then you would say, what's the valuation basis going to be? 06:19.784 --> 06:20.665 [SPEAKER_02]: Is it going to be on a revenue? 06:20.685 --> 06:21.685 [SPEAKER_02]: Or is it going to be on EBITDA? 06:21.785 --> 06:25.887 [SPEAKER_02]: If it's going to be on EBITDA, then you may have a different calculation than if it's going to be on revenue. 06:26.047 --> 06:27.468 [SPEAKER_02]: The next thing is how fast you want to grow. 06:27.488 --> 06:35.072 [SPEAKER_02]: If you want to grow super fast, then you might allocate more of your gross revenue and just sales than if you wanted to be more conservative. 06:35.212 --> 06:40.014 [SPEAKER_02]: The last thing that comes in the play is supporting the sales that people make. 06:40.114 --> 06:41.575 [SPEAKER_02]: That becomes a real issue, right? 06:41.615 --> 06:51.560 [SPEAKER_02]: So if you're calling it a physician group and you sell a bunch, but you don't have a support team to back it up, the salespeople will eventually quit selling because they spend all their time servicing and then you end up on this roller coaster, 06:51.680 --> 06:59.602 [SPEAKER_02]: but you know as a business owner, like every time you add a support person, that support person is non-revenue generating and they're impacting your bottom line. 06:59.962 --> 07:02.763 [SPEAKER_02]: So you have to have the sales to back up the support person. 07:02.823 --> 07:04.863 [SPEAKER_02]: Now, I know you do these calculations all the time in your head. 07:05.003 --> 07:10.084 [SPEAKER_02]: So the answer is not something that I could tell you, but it would be something that you would figure out. 07:10.244 --> 07:18.586 [SPEAKER_02]: As your business gets bigger, let's get some more complicated, because as my company's gotten bigger, we're investing more on the support on the back end 07:21.467 --> 07:32.700 [SPEAKER_02]: And we're trying to do both at the same time, but there's a lot more money going into infrastructure and it's the complete antithesis of where I was 10 years ago when revenues were a lot lower when I was like just go everything at the sales team. 07:32.860 --> 07:39.168 [SPEAKER_02]: I think you got to look at what stage you're at and what you need in order to support it and I'm sort of in that place from where I need to slow down. 07:39.428 --> 07:41.890 [SPEAKER_02]: and build a team before I can really speed up. 07:42.010 --> 07:52.378 [SPEAKER_02]: It's a gut-wrenching bet that we don't get it wrong because we're talking about adding over the next 18 months somewhere between $600 and a million dollars in additional payroll in order to support this. 07:52.578 --> 07:53.319 [SPEAKER_02]: It's gut-wrenching. 07:53.419 --> 07:59.083 [SPEAKER_02]: It's a tough thing to think through, but I have to have faith that if I do the right things and to have an assistant at a work. 07:59.223 --> 08:03.946 [SPEAKER_02]: Now, when it comes to paying the sales people, this is another thing that I've wrestled with as well. 08:04.206 --> 08:08.088 [SPEAKER_02]: So I come from a place and this is my mindset of pay me nothing. 08:08.208 --> 08:11.810 [SPEAKER_02]: I want the largest commission you can give me, because I'm going to go make it rain. 08:11.890 --> 08:14.672 [SPEAKER_02]: And I want to make as much money as I can possibly make. 08:14.792 --> 08:17.453 [SPEAKER_02]: That's the entrepreneurial way of looking at things, right? 08:17.633 --> 08:21.075 [SPEAKER_02]: Then you go and try to hire people and you're like, hey, I've got this great plan for you. 08:21.095 --> 08:22.916 [SPEAKER_02]: And they look at you and go, what's my base salary? 08:22.936 --> 08:24.077 [SPEAKER_02]: Like, how much are you going to pay me? 08:24.237 --> 08:26.098 [SPEAKER_02]: And you go, well, they want to pay you a whole lot. 08:26.118 --> 08:27.359 [SPEAKER_02]: I want you to make a lot of commission. 08:27.559 --> 08:39.707 [SPEAKER_02]: Now, one of the reasons why this becomes a problem for you is because if you don't have a process, like you have no process to send them into, you've no machine to send them into, you've nothing that's going to guarantee that they're going to be successful. 08:40.027 --> 08:41.768 [SPEAKER_02]: What do you naturally do as an entrepreneur? 08:42.068 --> 08:50.394 [SPEAKER_02]: Pay them as little as you possibly can with as high a commission as you possibly can, because if you screw up and make a mistake, it doesn't cost you that much money. 08:54.056 --> 08:56.097 [SPEAKER_02]: to onboard them and ramp them up quickly. 08:56.497 --> 09:01.999 [SPEAKER_02]: If you have all the tools that they need that you can plug them directly into, like a large organization can. 09:02.299 --> 09:09.102 [SPEAKER_02]: If you have training to get the moving and there's a great place where you can get some amazing training called sells gravy, you should check it out sometime. 09:09.242 --> 09:20.566 [SPEAKER_02]: If you have a way of knowing very quickly whether you're going to make it, if you've got a way of hiring, so you're testing to make sure you're hiring the best people, then what you can do is you can start increasing salary and reducing commission. 09:20.766 --> 09:28.152 [SPEAKER_02]: If you get the calculator out and you think about the way that entrepreneur is typically one of our people pay the least amount as possible, you may as you said, throw bodies at it, right? 09:28.232 --> 09:29.493 [SPEAKER_02]: I'll pay you tons of money. 09:29.773 --> 09:40.942 [SPEAKER_02]: What you'll find is that essentially when you start looking at it, your cost of sales in that model is a lot higher than it would be if you pay a higher base salary in a much smaller commission. 09:41.042 --> 09:42.403 [SPEAKER_02]: I mean, significantly higher. 09:42.643 --> 09:49.391 [SPEAKER_02]: So what I would suggest that you do, remeshes that you start looking at, what do you want your cost of a new sale to be? 09:49.511 --> 09:52.575 [SPEAKER_02]: Don't include product, don't include your support system. 09:52.735 --> 09:56.139 [SPEAKER_02]: Just what do I want the salesperson to cost me of every sale? 09:56.299 --> 09:59.303 [SPEAKER_02]: And an easy way of looking at this is think about it in million dollar chunks. 09:59.343 --> 10:02.747 [SPEAKER_02]: For every million dollars I sell, what does the salesperson cost me? 10:02.947 --> 10:07.208 [SPEAKER_02]: And then as you look at that, think about the highest level I'm willing to accept. 10:07.268 --> 10:16.711 [SPEAKER_02]: So is it 5% 10% 15% of a will in the pay 20% that's going to be predicated on what your particular profit model is, so what your EBITDA is on those sales. 10:16.971 --> 10:25.373 [SPEAKER_02]: If you have a much higher margin sales and you can afford more at the cost of sale, if you have a much lower margin sale then it's going to be next super low. 10:25.633 --> 10:31.956 [SPEAKER_02]: So this plan is working with their modeling like 1% to 2% as a cost of sale for the sales people. 10:31.996 --> 10:38.900 [SPEAKER_02]: And the sales team will think pretty good money in good six-figure salary, but the sales person's got to go out there in sales $7 million in order to make it. 10:39.020 --> 10:43.282 [SPEAKER_02]: Would you get a much higher margin than you only need $500,000 in your making your margin? 10:43.402 --> 10:44.542 [SPEAKER_02]: But I would figure that out. 10:44.602 --> 10:51.766 [SPEAKER_02]: And then, this isn't the thing you got to start thinking about and hiring on the market is what does my salary need to be, even though we're mesh. 10:52.046 --> 11:10.876 [SPEAKER_02]: right in your heart as an entrepreneur, it makes you want to go throw up in a bucket because you can't believe I'm paying someone a salary to do what I would normally do, but they'll be happier with a salary because it makes them feel better and your cost of sales will actually go down because the people that you're hiring aren't smart like Sarah over here. 11:11.156 --> 11:19.478 [SPEAKER_02]: who says, I want to make as much money as I possibly can pay me the highest commission rate that you can possibly afford, which I do, by the way, and I respect it. 11:19.518 --> 11:20.758 [SPEAKER_02]: Like, I'm totally good with that. 11:20.798 --> 11:23.519 [SPEAKER_02]: Like, I want people around me that would say, don't pay me anything. 11:23.539 --> 11:24.839 [SPEAKER_02]: I want to make as much as possible. 11:24.979 --> 11:27.120 [SPEAKER_02]: But that's something that you can think through. 11:27.280 --> 11:28.140 [SPEAKER_02]: And I'm sorry, Revish. 11:28.160 --> 11:34.822 [SPEAKER_02]: I don't have the exact answer for what you're looking for, but that's what I would be looking at at least from a calculating standpoint on what I'm going to do in your role. 11:43.134 --> 11:43.518 [UNKNOWN]: You