• Every company should have a proper sales budget that covers salaries, coaching, and tools. Shawn Finder and Ollie Whitfield share their top tips for building your first sales budget, from hiring top talent to buying the right tools. 
  • Sales tools are only as good as the people who use them. Plan to spend half of your sales budget on hiring and coaching salespeople, then you can start thinking about sales software. 
  • Don’t fall into the trap of hiring a VP of Sales too early. Wait until you’ve hired 3-5 strong salespeople, then bring in a leader to manage and motivate them. 

So you’re a founder who’s ready to build out your sales organization. Do you really need a sales budget, or can you just start hiring people and pull money from the marketing budget to cover tools? 

Shawn Finder and Ollie Whitfield say that every company, from small- and medium-sized businesses to large enterprises, needs a sales budget. And they’ve got advice on how to spend it.

In an episode of The 0 to 5 Million Podcast, Shawn shares his framework for spending a sales budget, based on his journey as a founder—and some of the mistakes he’s made along the way. 

The steps to spending a $1 million sales budget

Let’s say you have a $1 million sales budget. Here is how Shawn suggests you spend it: 

  • Invest 40-50% in hiring account executives who are ready to hit the ground running, not a VP of Sales who expects to manage a team. 
  • Put 5-10% toward bringing in a sales coach—just for the first year, to set your sales organization up for long-term success. 
  • Take the remaining 40-55% and buy sales tools that fit your company’s current size and needs (not necessarily Salesforce!). 

Here are the steps Shawn recommends for putting this sales budget breakdown into action: 

1: Build your sales team

“One of the mistakes that companies make right off the bat is they take their million dollars and spend it on sales tools,” says Shawn. “I would say that sales tools are only as good as the people who are using the tools, the process you have in place for the tools, the planning with those tools.” 

Shawn recommends that you spend 40-50% of your budget hiring your first account executives—and that you don’t hire a VP of Sales straight out of the gate. (More on that later.) 

Deciding how many salespeople to hire 

Shawn recommends that you hire according to the size of the total addressable market for each of your target verticals. 

Say insurance makes up 60% of your total target market, and software and healthcare each make up 20%. If you hire five salespeople, put three of them in insurance and one each in software and healthcare. 

Keep in mind that sales compensation comes in part from revenue, not your sales budget. That gives you room to invest a good chunk of your budget in attracting top talent. ”You want to make sure you’re putting your eggs in the right basket,” Shawn says. 

Shawn’s six steps for hiring top sales performers are a useful resource for the hiring process. He also points to Silicon Valley-style perks like free lunches and good benefits plans (and Ping-Pong tables!) as an example of how to draw the best talent. 

When to hire a sales leader (and when not to)

“Probably ten of our guests on this podcast have said that they hired a VP of Sales too early,” Ollie says. 

That’s eleven now—if you count Shawn. “When I started Autoklose, my first hire was a VP of Sales. He was really an account executive,” he says, admitting that he gave out that title “just to make the company look bigger.” 

That wasn’t the only time Shawn got creative to help Autoklose survive early on. He fesses up to winning over a major prospective client by creating 30 fake LinkedIn accounts to make the company, then just three employees strong, look bigger. 

Realistically, Shawn recommends hiring a sales manager once you have three to five people on board. “Some people need that person behind them motivating and pushing them,” he says. “Not a hands-on micromanager, just that person who’s in their ear, talking to them and motivating them on a daily basis.” 

2: Support them with coaching

Shawn suggests putting 5-10% of your budget toward sales coaching and playbook development, at least for the first year. “You want to make sure that you have a repeatable, scalable process,” he says. 

That means figuring out, as Shawn puts it, “exactly how you want salespeople to go from A to B, from the top of the funnel down to the bottom.” 

He recommends hiring someone who can help you develop that playbook and train your new sales team on it. Ultimately, you want a repeatable process that you can teach to the next batch of salespeople you hire so they can succeed in their new roles. 

“We all know what happens to an employee who doesn’t hit quota and doesn’t succeed,” Shawn adds. “They move to the next position.” 

Shawn views this as a yearlong investment, which tracks with his other beliefs about sales training: notably, that one session is enough. (After the first year, try his five-step framework for sales onboarding to set new hires up for success.)

3: Invest in the right tool stack for your business

So you’ve hired a great team and brought in a seasoned coach to help you build a process. Finally, you’re ready to buy tools. It must be time to call Salesforce, right? 

Shawn says no, not necessarily. “One of the biggest mistakes people make is they jump right into sales tools they know,” he says. “People think they need a CRM, so they get Salesforce, which is good for enterprise. But is it good for small or medium-sized businesses?” 

Check out Autoklose’s sales software catalog for a comprehensive overview of the market. If you follow Shawn’s advice to bring on a sales coach, they should also be able to help guide you toward the tools that are best for your business. 

Over to You

Ultimately, sales is about human interaction, not tools. The secret sauce is hiring great people and providing them with the support and motivation they need to make quota. These three steps will set your company up for sales success with the right mix of people, processes, and technology. 

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