Blog

How Much Can You Afford to Pay Your Salespeople?

July 27, 2022

How Much Can You Afford to Pay Your Salespeople?

Pax Momentum wants to help you answer a key question: how much can you afford to pay your salespeople? 
 
At PAX we’re all about helping startups who've established some product/market fit and early traction scale up their go-to-market efforts. One key milestone is when the founder is no longer involved in every deal, which means finding, hiring, and training a sales team. However, first you need to figure out what kind of sales team makes sense for your business model. 

In this video, we’ll walk you through a model for financing your sales team that takes into account your unit economics, market rates for different types of sales professionals (SBRs, Inside Sales, Account Executives, and VP/Management level) and realistic performance expectations for the various types of contributors. This model will help you figure out if the projected cost of building a sales team makes sense with your overall strategy. 



 
You need to have a general understanding of SAAS metrics in order to understand the model. This SaaS metrics breakdown from  Updata Partners offers a good overview.

Download Model https://paxmv.com/wp-content/uploads/2021/10/Sales_Hiring_Tool_Explainer_720p.mp4

Key Terms:

  1. tCAC: Total Customer Acquisition Cost. Includes marketing, lead gen, trade shows, sales expenses and onboarding.
  2. sCAC: Sales Customer Acquisition Cost. Includes all the expenses of sales rep (Account Exec, Inside Sales, etc.), PLUS the cost of management of the sales rep.
  3. mCAC: Marketing CAC. For our model, the mCAC is all the Customer Acquisition cost not included in the sCAC.
  4. PSR (PAX Sales Ratio): This handy ratio compares the sCAC and new Monthly Recurring Revenue (MRR) the sales rep lands. The Formula is: PSR = sCAC / MRR

PAX Blogs

Open Letter about New Selection Criteria

PAX has excellent news to share with our community: Starting in Spring 2023, PAX is expanding the selection criteria for our leading B2B accelerator program to include pre-revenue companies!

What actually happens after you get accepted into Pax Momentum?

Well first thing, you get funded. PAX wires the money before the program starts, not at the end. This means that from the very beginning, PAX becomes your partner as we are literally invested in your success.

One Big Mistake Entrepreneurs Make When Telling Their Story

Lights! Camera! Action! What can Hollywood teach entrepreneurs about deeply engaging our customers?
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.