26/11/2014 coachadmin

How to Open a New Sales Territory without Working Capital

recruitment interview for salesperson

Attitude Coach talks about opening a new sales territory with no office, no working capital and needing to recruit sales people in a new territory. How did he do it? Read on for the innovative solutions employed to overcome these obstacles.

Thinking outside the box

What can seem like insurmountable business problems often can be resolved by using innovative lateral thinking solutions. These are referred to as “thinking outside the box

When I wanted to expand my door to door sales business into a new sales territory i had a number of major obstacles facing me, any one of which could have shut down the goal. We had an established sales force in New South Wales, Australia and wanted to move 1500 km north to Brisbane.

Some of these problems included:

  • No working capitalto fund the expansion for an office or recruitment
  • No existing sales staff who were willing to relocate
  • No office to work from

The danger of having no spare working capital for the expansion is that traditional ideas would suggest that a business loan or overdraft is the way to overcome this problem. Of course this solution has ongoing impacts on a business’s cashflow with servicing the resultant debt. It is also possible that the additional capital required can be underestimated causing the expansion to be stalled part way or even halted. This can actually have a detrimental effect on the business.

Having no trained staff ready to go into the new territory is also problematic. Systems and processes that are well known and understood by existing staff have to be taught and ingrained into new staff. This can cause an additional administrative burden on head office as they deal with problems and errors caused by new staff not completely understanding or following processes.

Finally, having no office to work from can cause branding and perception issues for clients as they cannot see a physical presence.

I remember how we faced these problems and determined to overcome them. If we had attempted to open a new sales territory goal using the normal method of renting an office, paying staff to move and spending money on a recruitment drive we would have failed as we had no money to spend on an office or recruitment. We also didn’t know anyone in the new sales territory.

We had two brainwaves that allowed us to achieve the goal bypassing these problems:

Initially the move to Brisbane was made just by myself and my business partner. We spent the first three months generating income by selling door to door during the day while searching for office space at night. This overcame the working capital problem as the sales earned funded the office rent when we finally located it.

The recruitment problem was more interesting and was resolved through what we called the buddy program. More on that below.

The Buddy Program as a Recruitment Technique that works

Locating motivated and willing sales people is always difficult. Often recruitment agencies source people who don’t really meet the company’s requirements. Sometimes people who are employed seem like the right fit at the time but 1 month later clearly are not the right fit. The primary difficulty in both of these scenarios, as is in all recruitment, is locating the right people for the company. This is always difficult to do in a 1 hour interview.

We had an untapped resource right under our noses. All our existing sales staff had networks of friends and relatives. By asking our staff to nominate friends and relatives in our new sales territory or even where they lived if they might be willing to relocate, we suddenly had access to a large pool of potential staff to interview – without having to pay a recruitment agency or advertise. We had a much higher level of satisfaction right from the get go that these people could fit right as their relatives and friends had recommended them based on their understanding of our corporate culture. We had a scaled remuneration system for the buddy program for any successful leads who were recruited and then achieved results in the business. The existing staff had a financial incentive then to locate good prospects and help them get to a level where they were making sales. Some of them were even recruiting from their customers! Our working capital wasn’t compromised as the remuneration was funded by sales from our new recruits. This program proved to be the most successful recruitment drive we had ever attempted.

Duplicate myself when Opening a New Sales Territory

When you have a key person or people in a sales team it is often difficult to replace them. They know the products, how to overcome objections, have a high close rate and meet sales targets.

New recruits on the other hand have a steep learning curve in all these areas. The cost to the business in lost opportunities, appointment to close ratios and in turnover of staff while locating the right people can be high.

Once I had potential recruits to bring into the field I had to demonstrate an entirely new sales process and products to raw recruits. How was I to successfully duplicate myself? The biggest obstacle to overcome is the fear of failure for a new person who says to themselves “I can’t do that”.

I implemented a training method of taking potential recruits out with me to see how I sold and offered them a small incentive to come along. For every successful sale I made I paid them a small fee.

I remember the time I took Willy T with me into my new sales territory on a day where I had 4 sales appointments lined up. I sold 4 from 4 – and with every additional success I could see the belief level in Willy increasing. By the end of the day, he went home fired up – and with cash in his pocket!

In the next two weeks he sold 12 units – an almost unprecedented result in our company’s history! Why? He had not seen any failure, he had seen me overcome objections and make successful closes – and had a total belief that he could sell based on what he had seen me do. I had learnt how to successfully duplicate myself.

As you read this article did you ask any of these questions?

  • How can I do that in my business?
  • Could Attitude Coach help us expand into a new sales territory?
  • How could we implement a buddy program as a recruitment drive method?
  • Is lack of working capital stopping me from expanding into a new sales territory?
  • What other obstacles have I faced when expanding into a new sales territory that made that expansion unsuccessful?

Attitude Coach would love to hear from you – contact us using the form below now and we can talk about how we could profitably help you open a new sales territory.

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