David and Hillary Levine, owners of $2-million Levine Construction, in Teaneck, N.J., wanted faster growth but had resisted hiring sales help. Then last year the couple took a sales workshop. Impressed with the teacher, they hired her as a part-time sales consultant. Soon she was the company's full-time sales manager, and she hired and trained three reps. According to the plan, her team would double the commercial builder's sales by year's end.
But six months later, disaster. Hillary Levine reports: "No one sold anything, and we paid $60,000 out of pocket" -- for the manager's salary and the draw on commissions for the reps. "The sales cycle can be very long," she admits, but at the rate the sales force was racking up expenses, the company would soon go bankrupt. The couple let the sales manager and reps go, and were forced to cut other staff.
"We'll rise again, but it's been miserable," Hillary adds. "David blamed himself." The sales manager had insisted David not accompany reps on sales calls, and he'd given in.
Where did the Levines go wrong? Our panel of experts agreed that they should have hired just one salesperson at a time, offered performance-based incentives, and remained active in sales.
"I've seen a lot of people enamored with hiring a sales manager. After hiring mine, I spent more time on the road than ever, traveling everywhere with him the first year.
-- Bob Evans, president, WEK Enterprises, an Inc. 500 clothing manufacturer in La Mirada, Calif.
"A business plan expecting sales to double is the first mistake. Second, cut the overhead -- act as your own sales manager. You'll make some silly mistakes, but the goal is to figure out what the salesperson needs and point him or her in the right direction. The Levines know their niche, and they should pass that knowledge on to a new salesperson."
-- Hal Fahner, longtime sales manager for large and small companies, now at Blue Cross Blue Shield of Florida in Jacksonville
"The Levines chose to trust a theoretician rather than their own instincts. Effective managers must delegate, but abdication is deadly."
-- Russ Smith, managing partner, Sales and Marketing Search, a recruitment company in Danvers, Mass.
"When I hire a salesperson, I take 30 days to evaluate how things are going. Then we set goals. You have to talk about sales support up front. Are there target accounts? They should find someone who can talk to builders, not necessarily a professional salesperson."
-- Gina Day, CEO, Rockies Brewing, a $3-million Boulder microbrewery/brew pub* * *
For resources, consult Barron's reference guide Selling and Sales Management (800-645-3476; 1993; $16.95) and AMACOM Books' second edition of Selling Through Independent Reps (800-262-9699; 1994; $69.95).* * *