Hire Slow, Fire Fast.

In today's economic downturn more than ever acquiring and keeping the best sales people is a major challenge for small & medium sized businesses. SMBs too often do not put a concerted effort both in looking for and recruiting the best talent. This can be attributed to a number of factors such as the owner who continues to take it upon himself to be the go-to person for everything including the company's marketing & sales - He's the "closer". The systemic mistake made in sales is the one that permeates through other operational aspects of an SMB and that is the boss' inability to let go of some operational control to others such as his designated gun-for-hire, sales expert.

Mistake one, is hiring too fast. Sales people are in the business because they can sell and when a salesperson seeks a job with your company they are selling to you. Owners need to be deliberate in assessing the quality of the candidate. So what if the person pulled in $10 million in sales at that Fortune 500 company. In that company he had an enormous infrastructure support and a huge brand when he walked into a prospect. How much of those sales were from an existing client base versus new account acquisitions? Hire that animal that has proven himself in new account acquisitions and has experience in selling with limited organizational resources. If you are able to pluck a gorilla from an enterprise firm, assess if his client base would be transferable to your SMB. In other words will those clients buy from a smaller organization? Are those clients loyal to the brand or salesperson? The best opportunities are in acquiring a top performer from a competitor with an offer greater than their existing situation is providing.

Mistake two, is firing too slowly. SMBs do not have the same room for error as do larger corporations. They can neither wait as long for results nor can they afford it. The salesperson sold himself to you and you took a big chance on them. If you believe you were honest in your organizations' representation to that person and you provided the resources you indicated you would, then assess their performance fairly & quickly. Lack of results mean they have to go. Remember, in the end you and your other employees are relying on that sales revenue.

Finally, pay for quality people. Simply putting a body in sales will not provide a security for generating sales revenue. You will spend more time and resources in the end on a less qualified person than you would on paying a premium for a closer. There is a reason some can ask for "$X+1" versus "$X". Top performers for the most part care little about your personal reality or about the potential as so much as they are motivated by dollars and they will only leave where they are living well if they can live better with you.

See CBC's Dragons' Den judge Arlene Dickinson and Leyland Brown, VP of Commercial Solutions at HP discussing the hiring challenges for SMBs: http://www.youtube.com/watch?v=Rz3MvPYIiUk

Why are SMBs thriving in Germany?

According to Statistic Canada's "Survey of Employment, Payrolls and Hours" (SEPH) on average in 2008, 64 percent of private sector employees covered by SEPH were employed by small and medium sized businesses. SMBs employ the most people and they create the most jobs. Yet, 43 percent of SMBs "reported a significant reduction in business revenue" in the last 12 months according to The Strategic Counsel and the Canadian Bankers Association survey released this past October. This while in Germany small businesses are thriving during this time. Why? A major reason is their access to money. Today, the country's 450 public savings banks and 1,200 credit cooperatives finance three-quarters of all SMBs. "In hardly any country is the cooperation of local banks with small businesses as important as in Germany," says Sigurt Vitols of the Center of Social Science Research Center in Berlin. In Canada the concentration has left much of the lending resources to the largest financial institutions which have been more reticent in their lending practices during these economic times. Western nations such as the US have complained about the modest stimulus package Germany's government has made ($66.9 billion US). For the most part SMBs in Germany are not in favour of large government expenditures. "The danger people see is that we're going to leave huge debts to the next generation, " says Frank Wallau, head of the Bonn-based Research Institute on Small & Middle-sized Enterprises.

See article in Christian Science Monitor: www.csmonitor.com/2009/0412/p18s01-woeu.html
Direct Engagement show on what is being done to support SMBs: www.youtube.com/watch?v=AnwwbdvWLh8

Harmonized Sales Tax is good for business but...

On a show held on June 15, 2009 the panel and the vast majority of the audience composed of small, medium and large businesses were in favour of implementing the 'Harmonized Sales Tax' ("HST"). They all cited that it would streamline operations making them more efficient and in turn increase their organizations competitiveness in doing business domestically and internationally (See video: http://www.youtube.com/watch?v=IoQ7GMbRDg4 ) Rick Spence, a small business commentator, also agreed the essence of the reform the HST was to bring about was positive. His reservation though was that it would put tax on new items or increase the tax of some items that would effectively impede consumer consumption and thus inadvertently impact the sales of small businesses in particular. I too agree with the HST for the operational efficiencies it will impose on companies. That being noted considering the harsh economic realities presently besetting our market economy the present HST consideration should be modified. The government should grant a reprieve on taxing items that are not taxed under the existing system. This would benefit the struggling consumer and small businesses that would bear an inordinate financial burden under the HSTs implementation. If the government is simply seeking new revenues lost during these lean times it should then simply state it and let the people decide the eventual course to be taken.