Each year at budget time, most B2B companies face a similar challenge. How do we increase our revenue from the prior year? For many, the simple answer is hiring more salespeople. After all, if our average salesperson makes $100,000 and they are selling $1,000,000 worth of business, you can easily increase your sales by hiring 2 or 3 more salespeople. The bottom line expense would be $200-$300k for salaries, but the increase in sales would be $1,800,000-$1,900,000. Of course, you also need to factor in your management span and the possibility of needing additional sales managers to account for the increased size of your sales team. Also factor in sales training and other overhead that a growing sales team needs to be effective.
On paper, increasing the size of your sales team each year is a great strategy for increasing sales on an annual basis. However, at some point, it gets very expensive to carry the overhead and expense of a well-paid sales team, and at some point there will be diminishing returns as most markets are only so big.