Related Posts Plugin for WordPress, Blogger...
2012 DSA Annual Meeting Speech

Subscribe By Email


Email Us

228 Park Avenue South, Suite #92144 New York N.Y. 10003


5 Tips On What A Direct Selling Startup Needs

Several startups I have advised ask what the ideal headcount for their startup is.  Or what functions are needed and how many people should be assigned to complete them.  Every startup is different, and sometimes their competitive advantage dictates more personnel needed in the order fulfillment area than in the sales and marketing area.  

Others outsource everything not pertaining to their competitive advantage, and that minimizes the need for headcount in areas that otherwise might be greater.  But the most important ingredient in a successful startup is a dedicated Team, working together towards the same goal.  The right people are the reason a company wins.  

1) Marketing

Whether your startup was conceived in your kitchen, or it is part of another diversified company, its organization should make sure there is a strong advocate of your brand on staff who understands the urgency of social marketing.  Although that can be outsourced, you will also need savvy marketing personnel to lead and manage the relationship.  Social marketing gains market awareness for your product, idea and culture, and creates the desire, through social media and your website, for the consumer to join and buy.

2) Technology

Technology is a competitive advantage today for the companies that have offered innovative or even consumer friendly ways to relate to the company when buying or selling the product.  Make sure you have not only a tech savvy person at hand or on board, but that several on your staff can pinch hit when there is a glitch in the system and it can be solved internally.  Sellers of your product do not want to know why your system does not work, they just want it to work when their limited time allows them to work with your system.  

3) Finance

Having a financial manager on board is like having an alter ego.  He/she should be the voice of reason, at the same time be passionate about the business (well, finance people can almost be passionate), and should have skin in the game.  If you have been "lent" the services of the finance department of the larger organization, watch out.  The person assigned is not completely on the team if his/her compensation is not tied to the success of the direct sales organization.  A finance leader should also be managing the operations part of the business until it becomes big enough to specialize.

4) Forecasting & Inventory Planning

Forecasting and Inventory Planning in a direct sales organization is somewhat like Monday morning quarterbacking.  The product has been ordered before it has been sold, and now you hope the consumer and seller order what you have on hand.  Maybe even oversell to what you can provide on an immediate basis.  But if you are like most organizations, your product has lead time, especially if it comes from the far east, and oversales can be as dramatic on a sales force as undersales are to the company's balance sheet.  When starting out, you will need a forecaster, reporting to that finance manager.  When you gain traction, you will need an inventory planner, who will interface with marketing on undersales needing marketing attention, as well as buy strategies for top selling items to maximize cost breaks.  These two functions are not a luxury, they are a necessity for the cash flow and profitibility of the startup.

5) Sales Leadership

This is so important, I am placing it last.  All the other functions mean nothing if you don't have it.  A startup needs an aggressive sales team, performing all the necessary functions.  I cannot stress this enough.  The organization needs a Leader who is a sales driven individual, and who will focus the entire organization on getting and keeping buyers and sellers of the product.  Someone who has proven ability to build an organization.  In addition, a lead generation campaign is needed, ideally created by the lead generator in the field, who is responsible for converting leads into sales people.  It helps to have a third person, the nurturing trainer, on board already, who is charged with making sure all training needed is given, and those converted leads stay beyond 3 months.  Examine your organization.  Pay scale for these three positions go in descending order, and you need to know if the person you are interviewing is truly what they represent they are.  Without this dedicated team, it will be hard to win.  

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>
« Become Ruthless With Overhead | Main | Direct Sellers: What is Your Company‚Äôs Crisis Plan? »