How many times have we hired sales personnel only to have them flame out after only a few months? Or if they became successful, they “outgrew” their job (in their own mind) and either demanded more pay or threatened to leave and take their accounts with them?
What if you considered offering an equity position and perhaps even eventual ownership of your business? A potential exit strategy, if you will. This may not be a fit for many firms especially if you have a family member planning to take over the business or if you feel you need to cash out with a sale. However, a total cash out is not in the cards for many smaller firms.
What are the advantages of offering an equity position?
What are the disadvantages of offering an equity position?
How can you deal with these issues?
I believe that there are many firms that are unable or unwilling to pay the price to hire and attract the caliber of person that can succeed in today’s marketplace. Many more sales hires fail than succeed.
I set up an equity program for a young person and eventually sold the entire business to him. The entire process took about 15 years. He had no cash but lots of talent and willingness. We started slow and accelerated in later years. I got full price for the business, receiving my money over time and with interest. It was an exit strategy that worked for me, and it gave me a dedicated employee who helped make the business very successful.
If anyone would like additional details, feel free to e-mail me at firstname.lastname@example.org.
It might just make business sense if you are experiencing sticker shock or have had trouble hiring and attracting qualified sales or management talent.