Importance of sales processes and systems to investors

If you’re looking to attract an investor or an acquirer one day, expect them to dig into your sales and marketing processes. 

If you’re a company that sells to other businesses, an investor such as Scale Up Capital will want to know where you get your leads from and how much each costs you to generate. They’ll want to know what technology such as i-snapshot - now SalesRelay is part of the SalesWindow division of the SalesFitness Group you are utilising to support your sales team. They’ll want to understand how your salespeople get meetings and how many appointments a good representative has each week. They’ll also want to know the closing rate of high performers and how it compares to average performers.  

The investor’s questions aim to gauge the scalability of your sales model under significantly higher investment rather than simply to assess your past performance. Acquirers love finding businesses where the main constraint to growth is capital. They fall over themselves for a company that has an efficient sales engine that needs more fuel (i.e. money). Most investors have lots of capital but struggle to find businesses with a sales system that won’t collapse under the weight of more money. 

How Gregg Romanzo Built a Sales System?

In 2004 Gregg Romanzo started a traditional freight brokering business. Most freight brokers are nothing more than a handful of people arranging shipments in return for razor-thin margins, but Romanzo realised his sales model had the potential to grow into something much bigger. 

Romanzo’s model involved hiring high-potential people with a relatively modest base salary of between $40,000 and $60,000 per year and teaching them the business from scratch. He armed them with a computer and access to the best scheduling software and tied their variable compensation to the gross margin of the jobs they booked. Romanzo knew if he could get a representative to clear $100,000 per year in total compensation, he would be able to keep them for the long run. 

Romanzo took his very best talent—the top one or two percent—and built a team around them so they could earn even more. This cohort of salespeople could clear three, four, or even five hundred thousand dollars in an exceptional year. 

Since Romanzo paid a relatively low base salary and his people didn’t need a lot of equipment, he was able to hire a lot of salespeople. By the time he sold his company, he had 200 employees, 190 of which were salespeople. That’s 95% of his headcount dedicated to sales. 

How does that compare to your company? If you have a winning formula you think would hold up if you doubled or quadrupled your sales team, consider monetising the sales model you’ve created. Either hire a lot more sales representatives or show a deep-pocketed investor or acquirer how durable your sales model is and how all you need is their capital to grow it. Here ROSEDALE ADVISORY LIMITED we have the network of investor contacts and access to SalesFitness Group who can help you with your sales and revenue generation.