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The Green Sheet Online Edition

September 10, 2007 • Issue 07:09:01

Outsource the chores, increase the sales

By Ken Musante
Humboldt Merchant Services

One way to increase sales is to hire more sales staff. Common issues arise in developing a sales force, not the least of which is the question of whether the individual should be a 1099 independent contractor or a W-2 employee.

However, as ISOs and merchant level salespeople (MLSs), the best solution for increasing your sales may be to outsource less productive tasks so you can better focus on your most productive and profitable activities.

Although diverse activities are needed to successfully run a sales office, selling is the best use of your time.

Hours spent on staff training, human resources and administrative work, technology support, accounts payables, and tax preparation are necessary but have less impact on your bottom line.

Consequently, you may believe that hiring more sales staff is the route to riches because sales activities directly correlate to revenues.

How much is your time worth?

Unfortunately, this line of thinking miscalculates the cost of your time and ignores less expensive and more efficient solutions.

It is important to have compensation and training programs in place before hiring new sales staff. Both of those take time to develop and must be monitored.

As new vendors or ancillary services are offered, both programs must be upgraded.

Next, because selling is difficult and more profitable than other activities, it is a higher-paying position than many support positions.

Additionally, because of the intense training, variable compensation programs, competing job opportunities, difficulty in meeting goals and types of individuals attracted to sales positions, MLSs have among the lowest tenure rates of all types of staff.

This means you have to devote significant time to recruiting salespeople and continually retraining staff.

Is there an alternative route to increased sales?

Remember, your most profitable activity is selling. It is the skill that is most difficult and expensive to replicate.

Consequently, rather than hiring more salespeople, you may benefit from other types of assistance. Equipment installation is a perfect example of a time-consuming task that can be easily hired out.

Installers are typically paid less than sales staff, and their training and compensation programs are much easier to develop, track and monitor.

Once trained, an installer is much more apt to remain loyal to you because fluctuations in pay (typically caused by incentive compensation for salespeople) are not prevalent in installer positions.

Further, individuals seeking this type of position are less attracted to change. This disposes them to remain with the same employer for a longer period.

Will multitasking work for employees?

Additionally, you may be able to add tasks to an installer's duties.

This could further save you time for more profitable (selling) activities. Possible additional tasks for installers include:

  • Taking vehicles in for service

  • Delivering supplies

  • Picking up paperwork from merchants

  • Running errands

  • Intercepting interruptions, allowing you to handle issues in batches.

It is important that prospective applicants understand upfront that their job duties include running errands (such as taking clothes to the cleaners).

But as long as that is stated in the job description and staff members are treated respectfully, these types of hires are likely to develop into long-term employees.

Are there other ways to leverage your time?

Another way to maximize your valuable time is to outsource personal chores. This may be an easier way to increase sales because you can outsource these activities without incurring the paperwork and liability associated with employees.

Think about all the personal tasks you do that could be done by someone else -- cleaning, cooking, lawn care and yard work, car washing and maintenance, grocery shopping -- essentially any routine personal task.

Outsourcing these types of chores boosts the number of hours you can use to sell more, increasing your income without taking away from family or personal time.

Just be sure not to sacrifice tasks that you enjoy (some individuals claim to enjoy yard work, for example).

How do you measure outsourcing's benefits?

Quantifying the benefit of outsourcing further illustrates the point.

Assume you sell three new relationships per week. The average benefit of the net present value (proceeds if each account were sold at the time it was approved) of the relationship is $700.

This includes travel and expense management, as well as ancillary income and bonuses.

Assume further that you provide either a terminal lease or a cash advance on every fourth account, and the net earnings on the lease or cash advance is $400.

Thus, each account provides an additional $800 in net present value.

With three accounts sold every five business days, you sell 12.6 accounts per month, with a monthly increase in net present value of $10,080 per month or $120,960 per year.

If you were to sell one more account per week, those numbers would increase to $13,440 per month and $161,280 per year.

That is a monthly increase of $3,360, which is certainly enough to pay for a housekeeper.

Intuitively, this makes sense; you know your own level of productivity. If you create more time to sell, you will sell more -- guaranteed.

Is this a workable strategy?

Hiring a new salesperson does not increase the amount of time you can devote to selling. It takes time to train and monitor a new salesperson. And upon completion of the training program, new hires may or may not remain successfully employed.

This diminishes your opportunities because the time you have available for selling actually decreases.

On the other hand, outsourcing personal chores and routine business tasks ensures you will have more time. If you use that time to sell, you will sell more.

Think about it. Perhaps this strategy can work for you. end of article

Ken Musante is President of Humboldt Merchant Services. Contact him by e-mail at kmusante@hbms.com or by phone at 707-269-3200.

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