I have a wholesale costume jewelry company with limited funds. Should I hire a salesperson and, if so, should that person be full-time of part-time?
I have been in business for seven years selling in hospitals. I have started wholesaling this summer and have done well. What should be my priorities in organizing my business for success? I have been doing everything myself, but need help to grow the business. My product is excellent. For example, I sold a company 600 necklaces, retailing at $24, and they sold 493 pieces in three months. Ninety percent of the money I make goes back into buying more jewelry and then selling it. I am starting a fund-raising catalogue for schools, hospitals, etc., and I'm developing a website for retailers.
The challenge with hiring a salesperson, as you've probably figured out, is that it creates a larger gap in your cash flow, because you have to pay your person upfront, along with paying for your inventory, before you ever get cash from sales. You may want to start with a part-time person first, and see if you can get some of your stock paid for upfront or in advance.
It sounds like you will also need an additional source of capital to grow faster, so you might want to look at a credit line or a partner. You also may be able to find salespeople who have a good set of contacts to work on commission only upfront.
The key, whatever you do, is to make sure you tighten up your cash-flow gap--or even eliminate it entirely--by working your current business model in a little different way.
All the best.
Brad Sugars is the founder and chairman of ActionCOACH. As an entrepreneur, author and business coach, he has owned and operated more than two dozen companies including his main company, ActionCOACH, which has more than 1,000 offices in 34 countries.