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Sales Org 1.0 for startups

# 48 April 2016

An important step for a startup (apart from those selling exclusively via e-commerce) is to organise its sales, and to do this with the right timing. Not too early when the company is still in the entrepreneurial phase where everyone needs to take on many different roles, and not too late so the company loses momentum due to lack of a structured approach. Our experience is that startups generally tend do this too late rather than too early. Doing it right from the beginning could have a major impact on how the startup develops. A basic model for setting up a sales organisation – a Sales Org 1.0 – consists of the following components.

Allocate customer responsibility
The first customers are vital to a startup. They will give a reference value and an opportunity to test and further develop the products and services. A good approach is to start prioritising the potential customers, and then to allocate them among the people responsible for sales. These resources may be dedicated sales people, but who could have other responsibilities in addition.

Establish targets and follow-up procedures
Set targets for what each sales resource should accomplish – both in terms of sales and other KPI:s/activities (such as number of customers they are expected to visit during the year). Since sales revenues don’t materialise immediately, it’s important to track that the right type of activities are done in order to generate revenues later on.
Result tracking should be based on a simple reporting routine where the sales person and the manager go through and discuss the outcome regularly. When following-up sales targets a monthly meeting will usually be enough, when following up activities a short one-to-one every week is required.

Opportunity follow-up
When starting to approach the potential customers, business opportunities will surface. Keeping track of these opportunities and how they develop is central for a successful startup.
Here the follow-up and reporting should be focused on getting an overview of all opportunities, understanding what stage they are in (have you just found the opportunity or are you about to close it?), discussing how to progress them and finally making sure opportunities continue to be added to the list.

Supporting meeting structure
Regular meetings with a deliberate agenda are a support for driving the business. Where major corporations sometimes tend to have too many and too long meetings, startup companies tend to have no meeting structure at all, which leads to insufficient follow-up.
A meeting structure for a startup can look like this:
-Weekly one-to-one. Going through what customer meetings and important events took place during the week, and what is planned for next week.
-Monthly business review. Reporting and commenting sales results vs. budget, plus reviewing and discussing business opportunities.