The Pros and Cons of Outsourcing Your Small Business’ Sales Efforts
Entrepreneurs enter the world of business ownership for a lot of different reasons. Most have a passion for the product or service they create and the people and businesses that they serve. Passion is an important element in running a successful business. Passion, however, is not a sales strategy. To make money and keep your business running, entrepreneurs must find a way to sell.
According to Steve Koenig, a SCORE mentor with expertise in sales management, “Without a strong sales effort, your business is not likely to succeed. You can have the best product or service available, but if people do not know about it or cannot easily find and obtain it, the value is limited. Selling is a process and it requires more than just putting up a website. It is the sale that makes your business viable.”Many entrepreneurs admit that they’re not natural salespeople. So, they either have to learn how to sell or bring in someone who does. For many small business owners who aren’t yet ready to bring on a full-time employee, an outside sales representative is an option.
Like anything, though, there are advantages and disadvantages to outsourcing your sales efforts and putting your brand in the hands of someone outside of your company. Before you hire an outside sales representative, weigh the pros of cons. Use this list as a starting point when determining if outsourcing sales is right for your small business.
Pros of Outsourcing Your Small Business Sales Efforts Outside Reps Cost Less than Employees (Usually)
Hiring is one of the most expensive investments a small business will make, especially when starting out.
Employees require a business to pay payroll taxes, benefits and incur other costs. This is why so many small business owners find themselves struggling through a chicken and egg situation when it comes to hiring and sales; they need increased sales and more consistent cash flow to hire and they need to hire someone to go sell. Since outside sales reps aren’t on payroll, they can be a cost-effective way to potentially break this cycle.
Sales Reps Can Counter a Prospect’s Resistance
A professional, experienced sales rep will have the skills necessary to navigate their way through any hesitations or resistance that prospects may have about purchasing your product or service. They’re prepared to counter push-backs and give your prospects peace of mind in their purchase.
You Tap into a Bigger Pool of Prospects
A part of what you’re paying for when you hire an outside sales rep is their network and reputation. Professional sales reps with years of experience in your industry will immediately introduce your company to many more prospects than you have in your Rolodex. They’ll also keep your name top-of-mind so you’re the company prospects come to when they’re ready to buy.
Cons of Outsourcing Your Small Business Sales Efforts Sales Reps Aren’t Emotionally Invested in Your Company
No one will ever have more passion for your business than you and your team. Outside sales reps are not in tune with your company culture or core values and may not represent your brand with the same passion and authenticity that you would.
There’s Always a Confidentiality Risk
When you hire a sales rep, you’re handing over private, confidential, or proprietary information to someone outside of your company. This brings the potential for greater risk were that information to be misused or shared with an unauthorized person or company.
You Lose Your Relationship with Prospects
As an outside sales rep builds and nurtures prospective customer relationships, that prospect may become more loyal to your rep than to you and your company. Whenever you hand over your sales efforts, you’re also handing over your direct relationships with your prospects. This can also make it harder to build a relationship with that prospect once they become a customer. “A great salesperson knows when to ‘ask for the order’ and stop talking.
Some people are just not inclined to sell, while others can sell almost anything,” Koenig says. “If you can afford it, put a great sales team on your payroll. If you can’t afford it, use outsourcing. But be careful in crafting outsourcing agreements, and follow through with rewarding your agents.”
Determining the best sales strategy for your business is one of the most challenging and important jobs of running a small business. Making the right decision is critical to your success, which is why it’s always a smart move to enlist the support of trusted colleagues and mentors, like a SCORE mentor. A SCORE mentor can provide you with guidance from their years of selling and relationship-building experience and help you determine the best sales strategy for your business. Contact a SCORE mentor today.
Southwest Regional Vice President, SCORE
Since 1964, SCORE “Mentors to America’s Small Business” has helped more than 11 million aspiring entrepreneurs and small business owners through mentoring and business workshops. More than 10,000 volunteer business mentors in over 250 chapters serve their communities through entrepreneur education dedicated to the formation, growth, and success of small businesses. For more information about starting or operating a small business, call 1-800-634-0245 for the SCORE chapter nearest you. Visit SCORE at www.score.org.Funded in part through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, conclusions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA