Is Sales Outsourcing Good for Startups?

August 28, 2023
5 minutes to read
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The key to sustainable growth is sales. Every business knows this, no matter where they are in their journey. If you are starting up your own business and experiencing a little difficulty staying on top of your sales, you might be on the brink of searching for outsourced sales for startups just like you. It’s tempting. Outsourced sales for small businesses seem the most viable option as the costs are relatively low. Problem solved, right? You’ve seen other businesses do it, even ones that are maybe smaller than you. So why delay? Think it over first before you strike up a deal with an outsourced firm. Is outsourcing good? More importantly, is outsourcing good for where you are right now as a small business? It’s a lot of questions, but as you are only beginning your journey to growth, you will be making many decisions. 

Decision-Making in Startups

Typically, as you enter startup mode, you will be faced with questions and decisions practically on a daily basis. For early-stage startups, decisions need to be made quickly. This includes figuring out and understanding the product and service you are selling, the market you are targeting, and how you plan to reach those consumers.

  • Getting any of those rights won’t happen when you decide on them. You’ll need to keep experimenting. That means always learning, evaluating, and adjusting as you go.
  • Try to make initial decisions quickly, but keep in mind that you have to revisit decisions only if you can communicate new inputs or a new context into the mix
  • Remember that putting off a decision is a decision in itself. Avoiding decisions as much as possible might be nice, but you’ll have to face them eventually.
  • Another thing to remind yourself continually is that you’re not alone in making decisions for the company. If you have a team of professionals behind you, don’t forget to include them in the decision-making process as much as possible.
  • Growing a startup is all about decision-making. Some decisions must be made, while others must be contemplated upon spontaneously. One of these decisions is whether or not you should employ a third party to deal with your sales.

Outsourced sales for startups is a good choice. However, there’s a big, but that needs to be acknowledged. Outsourcing sales is a good decision, but the timing has to be right. You can’t just go at it from the very start.

To determine the best time to outsource sales for your small business, you must first understand the two stages of sales for any company.

Sales Exploration 

Yes, this includes all the decision-making outlined above. This is where you will be piecing and figuring things out individually. There’s a lot of experimentation and learning happening at this stage, so be patient with yourself and the company you want to grow.

Sales exploration is when you have not accurately calculated a repeatable and foreseeable sales model. Your sales funnel does not exist yet, and you have many questions to answer. These questions are:

  1. How will you generate sales? ”
  2. How do you qualify your leads, and how do you close them?
  3. What are your conversion rates? 
  4. How long will it take from initial lead generation to closing a customer?
  5. What’s a customer’s average lifetime value (LTV) specific to your industry?
  6. What kind of sales rep do you need at this stage, and how will you compensate them?
  7. At this stage of your business, do you have scalable resources?

Take note that you don’t have to have all the answers to these questions, but it’s best to know how to respond to 70% of them.

Sales Execution

This is the stage where you should have all the answers. If you don’t, at least 70% of them will do. You can’t build a solid sales execution or plan without anything on hand. Data is necessary for the outsourced sales team you’ll eventually decide to employ for your startup. It’s just a matter of scaling up from here. This is the stage where you’ll experience a lot of optimization to your already established answers.

When is the Right Time To Employ an Outsourced Sales Team for Your Startup?

One thing is for sure – you cannot outsource sales exploration. This is something only you and your internal team are qualified to do. You and your early employees have a deeper and more comprehensive understanding of your business than anyone else. This information should come from you. All the lessons you will learn from your decisions at this stage are crucial. Hence, you can’t simply let a third-party provider do this for you. You’ll need your eyes and ears on the market’s pulse to understand what your consumers and prospective buyers respond to.

The biggest mistake you can make at this point in your business’s journey is hiring a sales rep to talk and interact with customers. The problem is that you’re at the earliest stages of your business, and you will only learn your customer’s needs if you and your team go out there, show the people your product, understand their reactions, and ask them about what you need to improve on to satisfy their needs After this, you must talk with your team about what you have learned and how to incorporate your new insights into your product/service plans. It doesn’t end with one, though; you’ll have to keep repeating this until you see patterns. There is an inherent risk you are putting your business into should you decide to push through with outsourced sales at the sales execution stage. A team of sales reps will only work well if they know the product like it’s the back of their hand. How will you expect other people to do so if you don’t know your own business?

Key Thoughts

You can only outsource sales if you have already accomplished your sales exploration stage. You can hand over the data and information you have gathered to trusted sales professionals who understand the execution and optimization of a sales model. Employing outsourced sales for small businesses can help your business thrive in more ways than one. It can save you plenty of time, allowing you to focus on what matters to your business. It also saves you a lot on costs, and who doesn’t want that? 

Remember that you’ll have to do most of the work in the sales exploration stage. The information in this stage is crucial to your business, so don’t give it to someone else. This information is necessary for the sales team you plan on onboarding once you’ve passed the exploration stage and your startup. A strong foundation of who your market is and how to tap into it can help you develop your product or service even more.