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Saving Money in Your Startup — Part 3


How to generate sales and market your business without breaking the bank.


If you’ve been following along with this series, you’ve already thought about where to locate your business, the cost of living in your city, where to set up your home office or workplace, how expensive coffee shops are, how to legally set up your business entity, the business model canvas and lean startup methodologies, DIY and low-cost options to build your website, and how to take advantage of Google Apps for business. (If you missed any of that, check out Saving Money in Your Startup Part 1 and Part 2.)

We’re going to keep looking at strategies, tools, and resources to help you grow your business or start your company in a cost-effective manner. Today, we’ll focus on making money — sales and marketing — and our next post will dive deeper into how to run a marketing campaign, including your best options for email marketing.

Unless you’re blessed with a large family or network of friends who will work for free, you don’t have an army of sales and marketing people out there pounding the pavement for your new company to help raise brand awareness and generate sales — and that’s okay.

Let’s take a look at some ideas and options to grow your company’s bottom line and raise awareness of your brand — while still being conscious of your overhead costs.


Sales is the lifeline of your business. You must generate enough revenue to cover your expenses, and then some, if you hope to stay in business for the long run. Below we examine four approaches to growing sales and the financial implications of hiring a sales staff.

Option 1: Hire a Salaried Sales Force

I’ve seen a number of startups pay their salespeople $40,000 a year with a small commission plan, and then send them, untrained, out into the world to go bring in business. It’s not a great idea.

In these instances, more often than not, salary makes up the largest portion of the employees’ earnings, and the salespeople are rewarded more for just showing up than for actually producing sales. Without a proven sales model, or data on what the sales staff should be producing, how do you know what quotas to hold your sales staff to? If you are a startup, don’t invest in salaried sales staff!

One startup company I was brought in to help had four salespeople on staff, each making $40,000 a year without generating enough revenue to justify it.

New business owners, why on earth would you incur $160,000 a year in expenses hiring a sales team to try and generate business unless you are already generating revenue or have raised funding to cover this? It baffles me.

Let’s follow this example further: Four employees each paid $40,000 a year = $160,000 a year in expenses for your business. If each employee generates $20,000 a year in revenue, that’s $80,000 in gross revenue. Your business is losing $80,000 per year by employing that sales force.

Let’s say those same employees double the revenue they produce: $40,000 a year in revenue x four employees = $160,000 in revenue. You break even. Each of your sales reps needs to generate $40,001 in revenue just to generate a single dollar of profit for your business.

While your sales team may generate more revenue than outlined above, this example does not account for the time or overhead costs associated with interviewing, hiring, training, and employee turnover.

If your sales reps don’t work out, you are on the hook for paying their salaries whether they produce sales or not. It should be very clear how important it is to make smart sales hiring decisions for your business.

Option 2: Hire One Superstar Salesperson on Salary

All too often, I see companies hiring a B-level sales team and expecting A-level results. It’s just not going to happen. Hiring someone for $40,000 and expecting him or her to be the world’s greatest salesperson is unrealistic.

If you have an $80,000 budget to hire a sales staff, you’ll get better results hiring one A-level salesperson at $80,000 than paying two B-team salespeople $40,000 each.


If you hire correctly, your $80,000-a-year employee should be more innovative, need less direction and less day-to-day management, and will be more self-motivated and organized than your $40,000-a-year hires. Again, this relies on smart hiring on your part, but I’d take one A talent over two B talents any day of the week — especially at a startup.

Still, you are on the hook for the sales rep’s salary whether he produces or not — so you’d better hope he produces.

Option 3: Make an Offer a Sales Superstar Can’t Refuse

I cannot stress this next point enough:

Properly aligning incentives is essential to getting the most out of your sales team and attracting and retaining sales superstars.

Top salespeople expect to earn more than $100,000 a year. So in order to attract sales superstars, you need to provide them a superstar opportunity.

So, what kind of offer would a sales superstar find impossible to turn down? It should contain:

  • an uncapped commission opportunity! If they produce more, they will earn more;
  • an equity stake in the company — treat them like an owner, because if they help you build your business from the ground up, they deserve to share in the success;
  • a small monthly stipend to get them up and running.

Finding a superstar salesperson is a great way to grow your business, far better than hiring a B sales team and taking on unnecessary overhead for your business.

Uncapped commission: An uncapped commission opportunity gives the A+ salesperson unlimited earning potential. I once worked in a business that lived off outbound cold calls, and our top reps occasionally made six figures… A MONTH. Their earnings were 100% commission based, so the employer took on no additional overhead or risk in paying out those large commissions. While these earning levels were unattainable for most reps, the superstars saw the opportunity and in turn put 100% of their efforts into generating sales.

The employer also gave the reps a sliding scale commission for their production: The more they produced, the larger cut of each sale they received. This also paid dividends for the business owner — he gave up a bigger percentage of earnings to keep the sales reps happy, but he still made a lot of money for his company — without being the risk of being saddled with salaries for an unproductive sales force.

And as a bonus for the employer, the superstar employees told their superstar friends about the opportunity, and many of them came to work for the company.

The best part about this option is that if the sales reps don’t produce, the business owner typically doesn’t pay them, except perhaps a small stipend to get them started so they hit the ground running.

Through trial and error, your sales superstar can help you figure out an effective sales process for your particular business, track data to help you develop best sales practices, and eventually help run your sales department. An early hire sales superstar will often become your first sales manager and help you build out your sales team. Retaining talent saves you the costs of having to find, recruit, hire, and train new workers, and long-term employees will understand your business better and have established relationships with your customers.

Too many small businesses and startups want to pay their sales staff the smallest amount possible, and as a result run into high turnover issues. They fail to recognize the importance of generating revenue, which is just behind oxygen as far as its importance to your business.

Equity stake: We will talk more about offering employees equity and vesting equity in an upcoming post.

Small stipend: Often a sales superstar will want a stipend or retainer for 90 days, until they figure out how to sell your product or service. A small, time-bound payment helps manage your company’s financial risk by limiting the term (I suggest 90 days) and the amount, which will depend on the length of your sales cycle, complexity of the sale, and amount of time the sales rep will need to understand your product and target market and to start selling.

This small investment in a potential superstar is an investment worth making. It takes a certain balance of ego and empathy to be a great salesperson, and while an “all-commission” job offer will scare some people away, sales superstars won’t worry about not making money — they’ll have a strong sense of self-belief — but the stipend may give them the nudge they need to work for you.

Option 4: You Are the Sales Department

You may not know how to find and hire a sales team, or you may not want to go through the hassle of dealing with employees, in which case… you are the sales team.

While it may take away from your ability to run other parts of the business, quite oftenthe founder has unique knowledge and passion about the business and is best positioned to find clients and start generating revenue.

You will have no additional overhead and won’t have to deal with managing employees. But if you are going to be selling on your own, establishing an effective marketing campaign is essential.


Marketing is about generating brand awareness among your prospective and existing customers. How do you tell people about your business, product, or service in the most cost-effective and targeted way? How do you follow up with them effectively after a sale and let them know about opportunities to do business with your company again?

Today there are more choices than ever, and below are a few good options you have — some online, some offline — to spread the word about your business.


My uncle Joe wrote the book on networking. Literally. The guy has networked with everyone from professional athletes such as Brett Favre to U.S. presidents, and covers it all in his New York Times best-selling book Networking is a Contact Sport.

His general premise is that networking is about what you can give, not what you can get. By treating the networking process like you’re hosting a party, you’re able to connect others and make introductions in a way that’s natural — and connects you as well. It’s a much more effective method than trying to sell and coming across as salesy.

You know the saying: It’s not what you know, it’s who you know. And the more people that know about your business, the better. Rather than trying to sell, find a way to serve others and solve their problems.

Think of networking as a way to serve others in your community. Getting to know people you and your business can serve, connect with, and make strategic partnerships with, can help grow your business by leaps and bounds without incurring any direct expenses.

Speaking at Events

Another effective method of getting the word out about your business is to build a reputation as a thought leader in your community.

Local schools, nonprofits, your city’s chamber of commerce, and many other organizations hold regular meetings and events. These events are often looking for speakers and content experts. One of the best ways to get the word out about your business, product, or services is to use speaking opportunities as a platform to get the word out about your company.

The approach I recommend for speaking engagements is to focus on the audience and provide tangible solutions to their problems. Identify something that is important to them, either by researching your audience in advance, asking the organizer, or, if appropriate, sending a short survey to attendees ahead of time. Survey Monkey is a free, easy online tool you can use to conduct public or private surveys and collect data.

Once you have an idea of what your audience wants to learn, focus your talk on education-based selling. When you offer to teach your audience something, you provide value and will be seen as a problem solver. It’s perfectly acceptable to conclude your talk with how your company is well positioned to solve the problems you outlined, but the majority of your talk should be educational and focused on your audience.

Your overhead for a speaking engagement is ZERO, aside from your opportunity cost (time). And if you get good at it, they may even start to pay you a small fee to speak at events!


A blog is a low-cost, must-have marketing tool for your business. Blogging regularly can help you establish yourself as a trusted source in your field. Blogging is another low- or no-cost way to keep your customers and potential customers thinking about you and your business.

Your only investment with blogging is the time it takes to write a post. I started blogging for fun and blogged every Tuesday for almost three years, and now my blog is just shy of 200,000 page views. Think about what that kind of exposure can do for your business.

You can blog for free on WordPress, Medium, Blogger, or a number of other sites out there (I prefer WordPress, but Google “free blog platforms” to find others). You should strongly consider embedding your blog in your company website, assuming you are writing about topics that relate to your business.

Email Marketing

In the 21st century, staying in touch with your clients means having a presence in their email inboxes. The beauty of email marketing is that it’s cheap, or even free, and you can set things up in advance so the campaign works on auto-pilot, building relationships and brand awareness among existing and potential customers.

For starters, what is email marketing?

You know those emails you get from your alma mater, or Home Depot, or the state representative you voted for a million years ago? It’s all email marketing. Whether they’re trying to convert you from alumni to donor, inviting you to participate in a special promotion, or hoping to build your trust, it’s all about establishing and maintaining brand awareness. They want to be on your mind.

While you may delete plenty of those emails, you’ll read some of them, too — and at least catch the subject line on the ones you trash. If even a couple of people out of a hundred open up your email and click through to your website, it’s already working better than direct mail marketing, and for a tiny fraction of the price.

That’s why so many websites try to capture your email address: so they can market to you. The purpose of email marketing varies by company, and even by mailing list within that company, but it is most commonly used to build loyalty, trust, and brand awareness, or to drive engagement around a particular promotion.

Before you can run an email marketing campaign, you need to build an email list comprised of prospective and existing clients. We will discuss email marketing in detail in our next post, including what your options are for email marketing software and tips on how to grow your mailing list.

So Remember…

Sales is the lifeblood of your new business. Without revenue, what are you left with?

Ultimately your goal should be to attract the best talent you can with the resources you have. Invest time to properly align your sales superstar’s compensation with his or her interests, with your interests, and with the best interests of the company. Why? Because we can trust people, even those we don’t know well, to act in their own best interests in a difficult situation.

Networking, blogging, and speaking at events can help create brand awareness for your business for low or no cost.

Stay tuned: In the next post, we’ll discuss the power of email marketing to help find customers and look at some popular options for email marketing software.


 Part 4: Click Here


This post was originally posted at The Simple Dollar.
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