The Art of Attraction: Building a Sales System That Draws Investors
Irina D'Amore
I help ambitious entrepreneurs prepare and position for a strategic exit, aligned with their vision, terms, and timeline | Strategic Advisor | M&A Expert
If your goal is to captivate potential investors or acquirers in the future, be prepared for them to scrutinize your sales and marketing processes thoroughly. For B2B companies, investors will dig deep into the sources of your leads and the cost associated with generating each one. They’ll be interested in the technology propelling your sales team, how your sales reps secure meetings, and the average number of appointments a top performer achieves weekly. Understanding the close rate of your high achievers compared to the average will also be on their checklist.
These inquiries are not just about reviewing past performance; they’re about assessing the scalability of your sales model with significant investment. Acquirers are particularly keen on discovering businesses where growth is merely a matter of capital infusion. They eagerly seek companies boasting efficient sales engines primed for expansion, ready to rev up with the right funding. Most investors are flush with capital but face challenges finding businesses with resilient sales systems capable of handling increased financial pressure.
The Power of a Sales System: A Case Study of Gregg Romanzo
Take inspiration from Gregg Romanzo, who, in 2004, launched an innovative freight brokering business. While many freight brokers operate with a few individuals managing shipments for razor-thin margins, Romanzo recognised the potential for a transformative sales model.
His approach involved hiring high-potential individuals, offering a modest base salary of $40,000 to $60,000, and teaching them the intricacies of the business from the ground up. Equipped with computers and access to top-tier scheduling software, he linked their variable compensation to the gross margins of the jobs they booked. Romanzo understood that if a rep could reach $100,000 in total compensation annually, he could secure their loyalty for the long haul.
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By nurturing the top one or two percent of his talent, he created a powerhouse team that could earn three, four, or even five hundred thousand dollars in exceptional years. With a lower base salary and minimal equipment needs, he expanded his sales force significantly. By the time he sold his company, he boasted 200 employees, with 190 of them dedicated to sales—an impressive 95% of his workforce.
Reflect on Your Own Sales Model
How does your company measure up? If you possess a winning formula that you believe could thrive even with a doubled or quadrupled sales team, it’s time to monetise your sales model. Consider scaling up by hiring more reps or demonstrating to potential investors or acquirers how robust your sales model is. Show them that all you need is their capital to fuel your growth. Empower yourself and your business—your sales engine is ready for acceleration!