Business Law

Sales Management

Unless you're opening a non-profit business, you're like most entrepreneurs and you're starting a new small or family-owned business to sell something to make money. No matter what you're selling - hamburgers or office supplies - someone has to sell it, otherwise the business fails. Right?

That's why your business plan has to explain things like who's doing the selling, who's supervising them and what everyone's responsibilities are.

A Force of One, or Many?

In some respects, it doesn't matter if you're the only sales person for your business or if you hire people to sell for you. Many of the same basic, important things have to be included in your business plan. This includes:

  • Sales objectives and goals. How much do you have to sell to keep the business running and profitable? What are the time frames for your goals? For instance, are they weekly, monthly or annually?
  • Who's supplying the raw materials you need, like buns and meat for your hamburgers? You can't sell what you don't have, so you need to make sure you have what you need at all times
  • How are you making sure your marketing and advertising strategies are running properly and generating sales?

This is a lot to do. That's why some entrepreneurs hire a sales force so they can focus on running the day-to-day operations.

Sales Force

Here you need to describe who you're paying to sell your product (assuming you're not the only "employee" of your new business). There are several questions you may need to answer, such as:

  • Are you hiring employees or outside sales people, like independent contractors?
  • How many are you hiring at first? Your sales goals and objectives will help you figure out if and when you need to increase or decrease your sales force
  • What's the plan for keeping the sales force up-to-date on sales goals and objectives and their progress towards them?
  • Where are you selling? How is the geographic area split-up between the sales persons? Are selling over the internet or through mail-order? If so, who's responsible for filling those orders and keeping records of those sales?
  • How's the sales force getting paid, hourly wages, salaries or on commission? How much? Are there quotas to meet?

Management

Are you going to manage the sales force by yourself or hire a manager? If you're hiring, this part of the business plan has to explain the manager's qualifications and experience. If you don't have an individual in mind, describe the candidate you're looking to hire: How many years' experience or education and training are you looking for? If you're managing the force, explain a little bit how you're qualified.

A sales manager has big job. She has to do many things, like:

  • Make hiring decisions about the sales force
  • Evaluate each sales person's performance
  • Supervise all sales activities, from "cold" telephone calls to special ads or promotions, to make sure goals and objectives are met
  • Make sure the business has enough inventory and raw material to cover sales
  • Arrange special prices, discounts or credit for your "best" customers
  • Prepare detailed reports on profits, losses, costs, budgets, and forecasts of future, expected sales
  • Identify new products or services your company may be able to sell at a profit, and identify any that aren't profitable
  • Make sure all sales activities are done legally and ethically

It's Important

It can't be emphasized enough: Your business will fail if you can't sell your goods. Investors know this, too. If you need financing to get your business up and running then your business plan needs to convince potential investors that you have the right people and plans to make the business successful.

Because the future of your new business may be at stake, talk to an experience attorney if you have any problems or questions while writing this or any other part of your business plan.

Questions for Your Attorney

  • A friend offered to manage the sales force for my new business and says he can bring some of his customer contacts from his current job. Is there anything I need to be concerned about his offer?
  • How can I stop my sales people from using my sales training and techniques if they move to another company?
  • Should I hire employees to sell my goods, or should I get independent contractors? What are some of the benefits and disadvantages of choosing one over the other?
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