As young startups expand, they need to take on more customers and clients to accommodate growth. That means they also require larger, more productive sales departments to accelerate the conversion of new clients and leads into paying customers.
However, growing a sales department in this fashion can be a tremendously difficult task for many startups going through this transitional period. In the early phases, sales teams may be little more than a few agents managed by the overall company owner. As a business expands, this handful of employees will become its own department, complete with a separate management structure.
It's at this point in a company's growth that business owners need to start appointing specific sales managers and leaders. There are frequently two options used by companies: hiring within and bringing in an expert in the area.
Hiring from within is a natural business strategy. Owners know their new managers are familiar with their companies' products and services. At the same time, these people may not have the experience or skills to successfully lead the departments – sales skills and management skills are by no means 1:1. Sales coaching, on the other hand, could help them develop the necessary leadership skills.
Another core problem with promoting existing employees is that it can negatively impact production. If business owners transition their top salespeople to managerial positions, their contributions to lead conversion will essentially be halted, or at least cut significantly. Companies need to be prepared for this if they go down the hire-from-within route.
At the other end of the spectrum is bringing on sales specialists from other companies. These people may not have the product knowledge of internal salespeople, but they have proven management experience. External hiring does come with one huge drawback: discouragement. When employees see that their companies would rather hire externally than promote from within, it can seriously deter them from exceeding expectations and striving for upward mobility.
As companies continue to expand, they need to keep their options over. Business growth often starts with the sales team, particularly in the business-to-business realm, and without effective managers, companies may stunt their ability to expand.