Software Executive Magazine

OCTOBER/NOVEMBER 2017

Software Executive magazine helps software executives grow their businesses by showcasing the business best practices of our readers, executives from established and innovative software companies.

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The second calculation involves minimum revenue per head, margins, discount thresholds, and the total cost per rep. For example, Epos knows it costs about $11,000 per month in overhead per sales rep. Based on its software margins and discount rate, reps need to generate about $20,000 per month to help the company continue to grow. "Once you have those metrics, it al- lows you to scale a lot more effectively than what some companies do, which is get VC funding and say 'OK, we have $10 million, so just add three more sales teams,' without really understanding the math behind it." step 2: how to hire & whom to hire Stop reading now if you don't know the math behind your total cost per rep and what revenue they need to bring in for your company to be profitable. Assuming you do know this, the next step Duncan recommends is finding a recruiter. An external recruiter with a low flat rate around 10 percent per rep is worth the expense to get your first four or five sales hires in place. Once those step 1: know when to hire Epos has always had a scrappy startup mentality be- cause of its decision to bootstrap the company from day one. That means profitability metrics are at the forefront of just about every decision the company makes, especially when it comes to adding to its head- count. Actually hiring new sales reps is relatively easy, but knowing when to hire them can make or break a growing company. Duncan describes two simple math equations that dictate the pace of hiring for sales reps. The first is calculating lead volume. Epos knows a rep needs "X" leads per month to hit target. In order to scale to 50 reps, that means 50 times the number of leads repre- sented by "X" must be generated each month. Epos decid- ed early on to develop software that could be sold across multiple verticals, which helps boost its ability to generate leads. "You have to make sure you've got the demand so reps can have a job and not be sitting around twiddling their thumbs all day," Duncan explains. Whether your software company is an inbound or outbound environ- ment, it's essential to know your funnel's capacity and how many leads each rep needs to close enough business. hen David Duncan graduated with a law degree in England in 2011, he probably never imagined himself doing push-ups on the sales floor of the software office he was running in Orlando, Florida six years later. The push-ups were a fair trade – Duncan offered one push-up for every outbound call made that day, which added up to more than 600 (disclaimer: Duncan is an amateur MMA fighter, too; Software Executive doesn't condone average sales managers doing hundreds of sales incentive push- ups without consulting a physician). For someone who never imagined a career in sales to begin with, Duncan's story is impressive. He is now the VP of sales and operations at Epos Now, a cloud software company that he has helped grow more than 150 percent for each of the past six consecutive years. Duncan has come a long way since CEO Jacyn Heavens hired him as Epos Now's first employee. Back then, his only sales experience was some door-to-door selling to make extra cash while he was still in school. When he started at Epos Now, "It wasn't even a real job. It was a bit of money every week just to help out," he says. "They were looking for an initial guy to answer the phones, maybe pack up a few systems, and sell a few customers." He thinks he remembers making about $200 per week in those early days (or about $155 British pounds if we're being technical). "It wasn't like I was there for the money," he admits. "It was definitely for the journey." And what a journey it's been. Epos Now was founded in 2011 and already has more than 30,000 customers in more than 100 countries. Overseas, the company has a lot of traction. It has been named to the Sunday Times Hiscox Tech Track 100 list for two consecutive years, which tracks the fastest-growing privately held companies in the U.K. The Epos headquarters in Norwich, about 100 miles northeast of London, employs more than 200 people. This growth has been organic – to this day Epos has not taken on any outside funding. When Epos set its sights on international expansion, Heavens tapped Duncan to lead the way. The company start- ed noticing satellite offices of U.S.-based competitors popping up in the U.K. in 2014. Epos needed to take it to their turf and capture some market share in the U.S., or it would risk having competitors operate at a loss in the U.K. and essentially put Epos out of business. Heavens and Duncan booked a flight, explored four U.S. cities, and then Dun- can stayed back to find office space in Orlando. Finding an office is easy. Hiring 50 sales reps within a year, quickly scaling U.S. operations, and achieving a 150 percent growth rate in a new market takes some skill. Duncan shares a step-by-step playbook for sales success that any software company can learn from. W SOFTWAREEXECUTIVEMAG.COM OCTOBER/NOVEMBER 2017 14 EXCLUSIVE FEATURE Executive By A. Sorensen PLAYBOOK FOR GROWING A SOFTWARE SALES TEAM FROM 0 TO 50

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