Naked Sales People
While you were likely very curious about what I might write here, I was very curious about what picture my wife would choose!
Yes, you read it right. Naked sales people. They’re everywhere. And most of them don’t even know it.
If you’re selling for someone or you are paying someone to sell for you – you need to make sure everyone is covered! I’m not talking about clothes. (Though, if that’s in question, you might start there.) I am talking about money.
Here’s what I’m saying. I’ve seen many sales people, through their words and their actions, act like their pay is similar to those back in the office who are responsible for processing the work. That’s the wrong thinking.
Here is the thinking any sales person should have – at least from a defensive perspective. My pay is a financial burden on the company until I pay for myself through my sales production. Meaning, I must bring in enough revenue monthly, minus any commission and cost of goods sold, to pay for my salary, benefits, taxes and a portion of the company’s overhead. Once I hit that number, I am a financial blessing on the company. That’s the goal!
Let’s quantify for clarity. This is just a simple illustration and certainly not to be taken literally as many other factors play in. Imagine a sales person being paid $50,000 a year in salary, that’s $4167 per month. To make it easy, let’s assume that figure includes the carrying costs - taxes and benefits, mainly. Now, figure the margin on their sales to be 50% - meaning the cost of their product is 50% of what they sell it for and the other 50% is available to pay the sales person, etc. At what point is this sales person no longer naked? I’m no accountant, and likely far oversimplifying this, but here’s my take. Until they are selling twice their monthly salary, they are costing money. This does not consider any overhead, profit sharing, commissions, and on and on, but it gets the basic foundation in place. And, more important than the accuracy of this number, it gets to the root thinking we need to have as sales people and business owners. We need to think like owners. We need to cover our costs – to start. And sales people, while a highly valuable investment, must eventually pay for themselves. Sales people who think that way from the beginning will be far more successful that those that don’t.
Ultimately, there are far too many sales people that are not covering themselves – financially - and they often don’t really understand, or take the time to truly understand, where that money they’re paid every week is coming from.
It comes from sales. If I’m not covering me, someone else is. And if they’re not…who is?
One more thought…because I’m feeling like sales people reading this might feel like they’re just another financial number on the owner’s P&L statement, you are not. You are more. You are the engine that drives the success of the organization, and frankly, the engine that drive this US economy. As a good friend of mine, Mark Johns, often quotes, “Nothing happens until somebody sells something!”