Monday, May 14, 2012
Profit and Loss for First Year Sales hires: Loss (and the Golden Eggs)
Even when a new sales hire does 500K in sales the first year, the parent company may have negligible profits, or even report a loss. When you add salaries, benefits, equipment and overhead costs, administrative personnel costs etc, the 150K gross margin may not cover expenses. Hiring Sales people, though, is like Woody Allen’s comments about a successful marriage. He says finding a good partner is like finding the goose that lays the golden eggs. He keeps looking because he needs the golden eggs.