Hiring your first salesperson? Build this before you post the ad.

The whole job of a business owner is to keep replacing yourself. First as the salesperson, then as the sales manager, and eventually as the person running the company. Hiring your first salesperson is where that starts, and most owners do it backwards. They post an ad, hire whoever sounds good and then try to figure out pay, rules and training while the new rep is already sitting there.

Here's the order we use instead.

Start with gross profit

Gross profit is what's left after the cost of delivering your product or service. Once a salesperson is in the picture, their pay is part of that cost too. Before you hire, you need one number: how many sales does this person have to make each week to pay for themselves?

Doug uses a simple example on the show. Say you sell an indestructible red rubber ball for $1,000 and it costs you $500. You pay a new rep a $500 weekly base. One sale covers them. Pay $250 commission per sale on top of that and now it takes two sales a week for the rep to pay for themselves. Every sale after that is profit for the company.

That break even number becomes your floor. Below it, the rep is underperforming. Above it, they're making you money.

If I can make 10 sales a week, then a brand new salesperson is probably going to be around five.

Doug Mitchell, Building Great Sales Teams

Plan for that. A new rep needs roughly 30 days to find their groove, and they won't know the business like you do yet. Run the math at half your volume and make sure it still works.

W2 or 1099

This isn't tax advice, and you should confirm it with your CPA or an employment attorney. The rule of thumb Doug has used for years is simple.

If you tell that salesperson where and when to be there, then make them W2.

Doug Mitchell, Building Great Sales Teams

The same goes if the rep doesn't pay for anything of their own to do the job. A rep who sets their own hours, works from home and decides how to work their territory looks more like a 1099. A rep who comes into the office at the same time every day looks like W2. One paid hour with an employment attorney early on can save you years of guessing.

Base plus commission or base against commission

Base against commission means the rep earns their base or their commission, whichever is higher. It's a performance model and it works best with a high margin product, where a few sales put the rep past their base quickly.

Base plus commission pays the base and adds commission on top. It fits a low margin product where commission might only be 20% or 30% of what the rep takes home. The rep still needs their bills paid. The tradeoff is that it takes them longer to pay for themselves.

Set the base for the seat

On the episode, Doug sets an entry level base at about $500 a week and goes up toward $1,000 a week for an experienced rep with a track record who'll hit the ground running. A harder sale, a licensed product or a longer sales cycle pushes you toward the higher number.

The base is not their income. A good rep should earn double or triple the base in commission, and it should be possible to have a $1,000 day. If that isn't possible in your business, look hard at your pricing before you blame the rep.

Pay weekly

New reps need to see the money coming. Pay weekly, about one week after the week closes, and keep commission simple enough that a rep can do the math in their head. Four sales at $250 is a $1,000 day. That's a sentence a rep can repeat to themselves at 4pm when they want to go home.

The one sheeters

Before you place the ad, put these on paper. Front and back, so they're easy to hand over on day one.

• Comp plan and opportunity structure. Your five to ten best selling products and what the rep earns on each, plus a path to a six figure income on the back. If you can't map the promotions yet, at least be ready to explain where the role can go as the company grows.
• Script and common objections. The structure of a sale in your business, usually intro, qualify, present and close, plus at least five objections you hear all the time and how you answer them.
• Code of conduct and a day in the life. Your core values and the places a rep could cross a line in your industry, plus a real schedule: when they prospect, when they run appointments and what the week looks like once their pipeline fills up.
• A 1099 agreement or an employee handbook, depending on how you classify the role.

If you only sell five products well, train them on five. Throwing the whole catalog at a new rep in their first 90 days slows down the first sale.

Where to post

Indeed brings volume, so put a hoop in front of it. Use the screening questions or send applicants to your own application. Most people won't complete it, and that's the point. The ones who follow directions are the ones worth calling.

Facebook brings a more targeted candidate who can look at your page and see what you're about before they ever apply. If you're only hiring one rep, skip paying for resume database access until you've hired a couple and know the profile that works in the seat.

How we do it at Ballast

This is the first step of every Ballast search. We build the seat before we fill it: the role outline, the scorecard, the comp math and the knockout questions. Then we source across the job boards and social channels, assess every candidate on Crew Fuel and run every first round interview. You meet four finalists. See how a search runs.

Adapted from Building Great Sales Teams, #ThePlaybook 1. Quotes are lightly edited for reading.