Do you ever get the feeling that 2020 has dragged you kicking and screaming into…
There are a number of benefits to working as a self-employed sales professional. Your earning potential is limitless, you can decide when and where you work, you’re your own boss and ultimately, you’re in charge of your own destiny. One of the biggest pitfalls or downsides however is the variable income, as it’s usually feast or famine. With sufficient planning and preparation, you can ensure that you’re well prepared for the periods of famine and can mitigate any potential downsides.
Balanced portfolio of products
To ease your transition from being employed earning a guaranteed salary to working on a commission-only basis think about working for a manufacturer that has an established client base and selling a product that is well-known in the marketplace. Remember if you’re not selling, you’re not eating, so be very strategic in the portfolio of products you decide to represent. Ultimately you want a good mix of non-competing products, with one or more products from a major manufacturer complemented by less well-known products from small and medium-sized manufacturers (SMEs). Aim for approximately 30-40% of your income coming from these SMEs. There is the added benefit that doing so will also get you around any “dependency” issues (working for one employer) and avoid any legal or tax implications for both you and the company. In addition, try and get products that have a good range of lead times.
As an independent sales professional you need to manage your time and resources effectively as you no longer have the backup of a company to help you manage your administrative and business development tasks. A good rule of thumb is to allocate 20-25% of your time doing administrative, logistic, support and business development work and about 75-80% of your time selling. There are some steps you can take to help yourself with your admin tasks though. Spend time initially setting up various templates, like an email template and a reporting template. In addition, look into getting sales enablement tools like a meeting scheduler tool. On the business development side, you need to allocate sufficient time to source additional product lines and new prospects to target. There are agencies that do the hard work for you, however in the medical technology sector this type of agency is few and far between.
Managing variable income
There are strategies that you can put in place to manage any impact the variable income has. When looking at how you balance your portfolio of products, go for products that have both a long and short lead time. You are more likely to earn higher commission rates on high-value products with a long lead time. Products that are quick turnover, high volume, repeat order products generally have a shorter lead time and a lower rate of commission.
The second most important strategy is to put 10-20% of your income aside every month so that you can build up a contingency fund. Many really successful independent sales professionals have had to give everything up as they have failed to ensure they have a contingency fund to get them through any down times. It can be a very painful lesson to learn.
Ready to take the leap?
If you believe you are an experienced sales professional and have the skills, determination and network of contacts why not take the leap into being self-employed. This could be your opportunity to be master of your own destiny, with an unlimited earning potential and ability to determine your work-life balance. Contact us today to find out more or upload your CV directly.