Tag Archives: Points

How Do You Hire Good Salespeople? Eight Points

Situation: A CEO struggles with finding competent sales people. Issues include both finding these people, evaluating their skills, and assuring that they fit with the culture of his company. What techniques do others employ to find good candidates? How do you hire good salespeople?
Advice from the CEOs:
• Hiring salespeople is one of the most important jobs a CEO has, yet is paid the least attention. In a small company the CEO is deeply involved in the process, while in larger companies the CEO’s role is assuring that those responsible for selection and hiring are bringing in quality individuals. In either case the important points for the CEO to oversee are as follows:
• Determine what you want the person to do. What skills do they need? How much can you pay? Is that competitive with the market?
• Advertise – use internet portals, print media and referrals. Beyond this, one of the most successful means of recruiting is to hire individuals who have proven their skills in other companies and who are known to and respected by your existing salespeople.
• Review resumes for basic qualifications and weed out all that do not meet those qualifications.
• Test potential hires. There are a number of good tests including: DISC, Meyers-Briggs and Identity Compass.
• Bring candidates in for interview. See how they react to pressure. Are they a good match for the company culture? What is their personality like? Are they comfortable with the company’s philosophy, size, reputation, products and services, and so on?
• Check references and contact their current customers to gather their impressions of the candidate’s capabilities.
• Remember that past performance does not guarantee future results – particularly if there is a significant change in what is being sold.

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How Do You Negotiate the Purchase of a Franchise? Seven Points

Situation: An experienced CEO is considering the purchase of a franchise. What are the key points to consider in both evaluating the opportunity and in negotiating the purchase? What advice should be sought? How do you negotiate the purchase of a franchise?

Advice from the CEOs:

  • Most franchises have a set contract in use by all of their franchisees.
    • Ask for the names of existing franchisees and ask them what works or doesn’t work both about their contract and the services provided by the franchisor.
    • Ask the franchisor whether they will agree to a side letter to cover areas of importance outside of the franchise agreement.
  • What services and are offered by the franchisor as basic infrastructure and what are offered as a percent of sales or other fee arrangements?
  • Look closely at the frequency and amount of franchise fees. What fees are set or variable? What is non-negotiable?
  • Is there a need for a professional to represent you as the buyer?
  • Closely inspect the prospectus financials – franchisors in many states are required to provide these to prospective buyers. What is the initial investment? Are there monthly or periodic minimums to be paid by the franchisee? What are typical monthly operating costs.
    • Add to these your salary replacement costs – assuming that you will have to pay yourself something over the break-even period.
    • Calculate the monthly revenue needed to break even, and to pay off the initial investment.
  • Evaluate the competitive situation facing the product/services offered by the franchise. Network with others in the market to assess both the market potential and any barriers that that will be faced as the franchise is established.
  • What other questions should be asked?
    • Why is this business interesting?
    • What is your experience and what is the experience of the franchisor?
    • How well do you understand the market that the franchise will be serving?
    • What does the franchisor bring to the table that you cannot do yourself? What are the comparable costs?
    • What is the anticipated rate of return? How is it being calculated? Can this be verified with third parties?
    • What criteria are deal makers and which are deal breakers?

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