When I interview salespeople, I often ask about their desired management styles.
The response I hear most frequently?
"I want to be treated as if I were running my own business."
On the surface, this might be music to an executive team's ears. The truth of the matter is that it is cause for alarm.
When salespeople say they want to be treated as business operators, their perceptions of running a business are not aligned with reality. They are saying they want complete autonomy to do whatever they want to do, whenever they want to do it. Of course, that's not how successful businesses operate.
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Anyone who has ever operated a business knows that running a company does not include the right to follow the path of the wind. If you operate a publicly-traded company, you have responsibility to the chairman, the board of directors, and the shareholders. If you run a privately-held company, you have accountability to the bank or partners. In both instances, you also have a responsibility to the employees. Thus, laissez-faire management and running a successful business don’t go hand-in-hand.
The first step toward treating your salespeople as real business operators is to ask them to prepare a sales business plan that shows how they will make their business successful. The plan should not be the second-coming of "War and Peace" but should be thorough-enough to give the executive team comfort in their success strategies and tactics.
The best approach is to create a sales business plan template based on questions the investors have about each salesperson’s approach. The overall plan should "map back" to the revenue target set for the salespeople. For example, if you are asking your salespeople to generate a million dollars in revenue, their plans should clearly show how they are going to achieve that target.
The plan template should include five core components:
1. Accounts
The accounts section is the place in the plan to list clients and prospects and their expected revenue contribution toward the million dollar target. If the salesperson's target includes both existing accounts and new ones, this section of the plan forecasts the expected performance of the portfolio and identifies the new accounts that will help achieve the target revenue number.
2. Prospecting
The prospecting section shows how the salesperson will build a sales pipeline. Understanding a salesperson’s strategy to engage prospects is essential for investors to sleep well at night. This area should highlight both pipeline development strategy and tactics.
3. Sales Metrics
The sales metrics section shows how the salesperson’s activities correspond to results. This is a statistical presentation of the sales activities that will help meet the million dollar goal. This should show a success formula that works backwards from the goal and corresponds to sales activities. For example, the formula could outline how many proposals will lead to a sale, or how many meetings will lead to a proposal.
4. Skill Development
This area is often ignored by salespeople, but should be important to the investor group. If there isn’t a commitment to continuous self-improvement, how will the salesperson’s business continue to flourish? The plan should show how the salesperson will aim to gain new knowledge and skills every month.
5. Business Needs
The final section of the sales business plan template asks what the salespeople need from the company to succeed. This area of the plan provides each business operator with an opportunity to share any needs of the manager and the company. It also tells what would prevent the salesperson from achieving the million dollar goal. As an investor, you want to know about potential roadblocks so they can be addressed.
Once the plan is created, a conference call or meeting is scheduled with each salesperson and the “investor group,” in this case the executive team, during which the plan is presented. The investor group challenges the plan to make sure it is sound. Once the investor group (executive team) and the business operator (salesperson) are philosophically aligned on the plan, management of the salesperson becomes very straightforward. All discussions and interactions are focused on the execution of the agreed-upon plan.
Need help with your sales business plan template? Click HERE for a sample sales business plan. You will need to edit the template to match your business objectives.