Building a sales team for your startup

Building a Great Sales Team For Your Startup

You have just done the semi-fearful, semi-exciting work of admitting to yourself that you need a sales team.

As a CEO with little sales experience or a newly appointed sales manager of a startup, this can be a daunting task. How do you start the process? What do you look out for? How do you ensure that your team is the absolute best and pulls in stellar revenue with each deal?

The answers to all of these are below.

When to Start Hiring?

There is a certain specific time when you begin the process of building your sales team. And that is not when you are still on day 5 of your business.

You start hiring when you have more deals than you can handle:

This is a good place to be in except when it is not. You have interested prospects lined up but you do not have the time to convert them into customers. Your selling process is limited because of a lack of follow-up.

Who are you Hiring?

Before you start scheduling interviews, you must know the roles that you will be hiring for.

When it comes to building a sales team, you look for people to fit the role of either an SDR (Sales Development Rep) or AE (Account Executive).

What is the difference between the two?

An SDR’s job is to generate leads and set the stage for a sale to happen. The AE takes it from there and does the important task of closing these deals.

Every day, an SDR sits down and based on the ideal customer profile, generates leads at specific companies.

This can involve sending around 50-300 emails per day and calling about 50-100 people every day.

The success metric for an SDR is the number of scheduled appointments and qualified demos.

An AE, on the other hand, follows up on the interested leads generated by SDRs. More often than not, they meet the prospect in person, seek to understand their problem, and then give solutions in the form of their products.

The success metric for an AE is the number of closed deals.

SDRs pass on the baton to AEs so to speak.

Scaling Your Sales Team

You begin building your team by hiring 2 AEs.

This is because depending on the particular situation you are in you would already have a few leads that you need to follow-up on.

Before the SDRs come in to generate new leads, you need to ensure that your AEs can close the deals that you already have.

These early days AEs need to be highly passionate, hustling, and creative. This is because their responsibility is to market and sell a product that still has a limited audience. This will require them to think out-of-the-box and be persistent with their efforts.

Also, the AEs that you hire first will take on the role of an SDR too. But only initially. Once the AEs begin to pull in business and close deals, you can move on to hire SDRs. Growing your team at this point would look like going from 2 to 3 AEs and from 2 to 3 SDRs.

When it comes to hiring SDRs, you would be looking for a person who has great drive, is passionate about the domain your product belongs to, is curious with a thirst to learn and improve, and can be a great team player.

Once you have a team of 5-6 people in place, you look for a team leader. There are two ways to go about this- either hire someone from outside or promote one of the people in your in-house sales team.

Companies go for the first option when they are looking to bring the sales acumen of another company into their company. However, if you already have a growth model in place, you can go for promoting the most talented/ experienced AE as the leader.

Once your team is ready with a leader, hire slowly. With 3 AEs in the team, you don’t need to hire more until their schedules are overflowing. If their schedules aren’t full to the brim, the SDRs need to improve their lead generation game.

How to Hire

You now have an idea of what your hiring process will look like and how you will scale. But when you finally sit down to interview a candidate, how do you judge them?

The first step is to have a written plan for your sales team addressing key questions.

Do you need an inside sales or field sales team? What kind of business do you want to pull in? Was is your base target? How many experienced and amateur professionals do you need? If you want experienced professionals, what kind of experience and background will you be looking for? How much will you pay? Once the hiring is done, how will you support and train them?

Only after you have answered these questions sufficiently well, you should head to the interview room. Once there, keep the below pointers in mind:

Look for the right kind of sales talent

The right kind of sales talent cannot be pigeonholed or described completely in an ad on

You look for a person who is intelligent. Marks during the degree course are not indicators of intelligence. Evaluate the response of the person during the interview. If you are going to sell a technical product, you need a person who is well-versed in the technical language but can still describe the product in layman terms should the need arise.

Next, you look for enthusiasm. Synonyms for the same include passion, hunger, drive. Sales is hard. You are convincing people to give a piece of their time (and consequently money). You have to be persistent and not lose heart easily. Having the ability to approach the client and deal with them with same optimistic attitude as you did on the first day is crucial.

Speaking of persistence, you need someone who is patient. Someone who won’t give up before all the possible no’s have been said.

Also, look at the person’s aspirations. ‘Where do you see yourself 1 year/ 5 years/ 10 years from now?’ If they have an ambitious plan in place, you can bet that they’ll do all they can to hustle their way to the top.

Finally, look at how willing the person is to learn. At no point in any career can one say that there is nothing more to learn. For the 1-2 AEs that you hire in the beginning, this trait is all the more important. If you have little sales experience yourself and have no sales leader to lead them, they themselves will be responsible for their learning. They should have the drive to learn from their experiences and figure out what does and doesn’t work.

Aim for Diversity

Build a team that is diverse in terms of gender, culture, and experience.

First, a diverse team means a wide-ranging set of talents. Women bring their empathy, whereas men bring their tirelessness work ethic. This is not to say that men are not compassionate or that women can’t work hard. It just happens that there are some traits which are natural to a large percentage of a gender. The overall team that is created is more balanced.

A culturally diverse team means that you have different people you can go to when in need of different perspectives. Also, as your clientele expands, an SDR from Germany will be better able to tell the cultural and professional nuances of a German client to an English AE. Also, people are more easily able to trust people from the same racial/ ethnic/ cultural background. You can leverage this fact when trying to permeate new markets.

When you have a team where everyone has varying experiences and backgrounds, everyone is kept on their toes. The juniors are eager to learn from their seniors while the seniors are continuously challenged to retain their position by the very same juniors. This fuels drive which (hopefully) leads to more leads and conversions.

After Hiring

Have a learning process in place that readies your new employees to be successful in their roles. Set targets and deadlines and encourage them when they seem to falter. Remember, the team is as new for them as it is for you. Invest in tools, technologies, people, and workshops that improve their knowledge and help them to work efficiently. Use leaderboards and a point system to (positively) motivate them.

Set benchmarks of excellence and mediocrity. Those who keep up with the former, reward or promote. Those who aren’t able to move beyond the latter, fire away.

Summing up

Building a successful sales team is no easy task. There is a high chance that initially your newly-formed sales team doesn’t look like your dream team. Worry not. With time, patience, and all the other skills of a salesperson, you and your team will soon be on your way to creating more business than you can keep up with! Which is a very, very good thing.

What is CLV and Why it is the Most Important Startup Metric?

What is CLV and Why it is the Most Important Metric for Your Startup?

How can one make sure of the fact that their company is succeeding?

Well, one of the obvious answers could be by looking at operation metrics such as revenue, profit margins or sales and then comparing these figures with one’s own annual projections, historical records or number of competitors in the market.

But, these are not the only metrics one should adhere to especially if they want to assess their company’s success in long-term.

One of the most important metrics whose importance has been understated for a long time is CLV or Customer Lifetime Value. As the name suggests, CLV refers to the net revenue a customer would be bringing to the company during his lifetime.

While marketers have been repeatedly talking about the importance of CLV, surprisingly the term is not much known. A 2018 UK study revealed that “only 34% of the marketers who participated in the survey really knew about CLV and its real value in startup growth, while only 24% of them agreed that CLV was being calculated properly to assess their company’s success.

What is CLV or Customer lifetime value?

If we speak of definition, Customer lifetime value (CLV),  customer profitability analysis or simply User Lifetime Value (LTV) is a metric used to calculate a customer’s monetary worth to a company by factoring his relationship with the company over time.

CLV is a crucial metric that lets companies assess how much they should spend to acquire a new customer and to retain already existing ones.

What are the benefits of CLV?

1) CLV helps to design better Customer Acquisition Strategies

Paying attention to CLV can drastically change the economics of your customer acquisition plan.

For instance, if the CLV of a customer is $2000, you know how much you can spend to acquire a customer.

No wonder why companies like Uber, Amazon and others offer lavish discounts and offers to get a new customer in their door. Because they know the lifetime value of that customer is far higher to make up for any initial loss.

2) CLV Allows Better Customer Segmentation

Recognizing the company’s most valuable customers (ones with highest CLV) will give an insight on who should one target in terms of demographics.

3) Reducing Churn for Better Customer Retention

Knowing CLV of a customer will give a better insight to decide if the customer is worth retaining and then decide on implementing steps which can encourage them to come back to using your services.

4) CLV helps in Analysing Payback Period

The payback period determines how long the business will take to recover its acquisition cost from a customer.

A long payback period could directly associate more risk to the business.

For instance, if a customer churns before the payback period, the business would be bearing a loss in regard to that customer. Alternatively, if a customer runs past its payback period, any purchase from him will bring value to the business.

5) CLV Helps in Improving Customer Service

CLV can be deployed as an early warning sign to managed defection rate and complaints.

For instance, if a customer with low CLV complains about a particular issue, is it necessary to investigate the problem to the nth degree? Offering a solution and ensuring the fact that customer leaves happy is important but at the same time investing too many resources on chasing an already sinking ship is also not a wise decision to go forward.

The Math Behind CLV: How to calculate it?

There are a wide plethora of ways when it comes to calculating CLV for your company which we will look into detail one by one.

The Simple Formulae

The simplest way to determining CLV is by subtracting the initial cost of customer acquisition from the total revenue earned from a customer.

Total Revenue Earned from Customer= (Annual revenue per customer * Customer relationship in years)

CLV = (Annual revenue per customer * Customer relationship in years) minus Customer Acquisition Cost

Here is a quick illustration of the above formula:

Let us assume a SaaS company produces $4000 each year from every customer that has an average lifespan of 3 years and a initial CAC of $2000 for every customer. Hence applying the formulae, CLV should be calculated as:


This simple method of calculating CLV can prove effective when the profit contribution from customer remains consistent. For example: If you provide a subscription-based service with only two models, then customers can be expected to provide a consistent source of revenue.

Historic and Predictive CLV

In terms of data used, the methods of calculating CLV can be divided into historic and predictive.

Historic CLV

It is defined as the sum of gross profits from all the past purchases of an individual customer.  The formulae used is:

CLV= (Purchase 1 +Purchase 2+……. + Purchase N) * AGM

Where purchase N stands for the purchase value and AGM stands for Average Gross Margin.

Predictive CLV

Predictive method of calculating CLV is considered a more complete method which helps to project how much revenue a customer will be generating for the business during the course of his relationship with the business.

  • This method makes use of certain behavioural patterns and transaction history that is used to determine the current value of the customer as well to forecast how much will the customer evolve during his lifetime with the brand.
  • The accuracy of this methods improves over time as more and more data pertaining to a customer is collected with every purchase.

There are different formulas available to calculate predictive CLV, but here we will focus one of the simplest ways through which a predictive CLV can be determined:

CLV = (P × AOV) × AGM) × ALT

Where P stands for average number of monthly purchases, AOV stands for Average Order Value and AGM for Average Gross Margin and Alt for average lifetime of a customer.

How to improve your company’s CLV?

There are myriad ways that can be used to enhance the CLV of your company. Some of them are as follows:

Regular Communication

Keeping in touch with your most valuable customers can be a good way to increase CLV of your brand. For instance: online retailers can make use of email reminders to let customers know about new products and offers thus encouraging them to come back to the company’s website.

Long-term customer relationships are built on the base of customer loyalty hence marketers should focus on devising strategies that can improve customer-brand relationship letting customers stick loyal to them and not switch to other brands.

Remarketing Campaigns

Refining company’s marketing strategies to target most valued customers who are likely to make repeated purchases can be a powerful way of improving CLV.

Cross Selling and Upselling

These two marketing strategies can be effectively used to improve CLV. Though both these terms are used interchangeably, they work in tandem.

Cross Selling is the practice of encouraging customers to buy a higher end product than one in question while Upselling pushes customers to buy related or complementary items alongside the items they are already buying.

Let us take the example of e-commerce industry to understand the two terms more clearly.

  • Cross-selling is a highly effective tactic in e-commerce that comes in the forefront on product pages, during checkout. It aims at targeting repeat purchases and introducing a wide catalogue of services to customers.
  • Similarly, upselling involves showing comparison charts to market higher-end products to customers. Offering suggestions for better versions or models of a product customers are looking forward to buying can leave them more satisfied with the purchase, encouraging them to come back for their future needs.

Loyalty Programmes

Introducing Loyalty programs with additional perks can be one of the most effective ways of targeting customer retention as well as improving customer-brand rapport for years to come.

  • Special discounts, freebies or free shipping can encourage customers to make repetitive purchases.
  • Repeat customers are always more valuable as compared to ones that make a single purchase – as it costs less to retain a customer than to acquire a new one.


Whether you are a small brand with a limited customer base or a reputed firm with millions of loyal customers, determining your company’s CLV is a robust way to earn customer lifetime value.

Factoring your company’s CLV effectively will act as a recipe for your business success that can leave your less-data driven competitors struggling while you will be dancing in your company’s success bash.

Top Differences Between LLP vs Private Limited Company

11 Top Differences between LLP and Private Ltd. Company for your Startup in India

Starting a business is no cakewalk; there are a lot of things entrepreneurs have to consider while investing in a huge amount of hard work, effort and time.

If you are one of those aspiring entrepreneurs looking forward to starting your enterprise, there are chances that you must have thought of one of the most fundamental issues about what kind of business entity: a private company incorporated or a limited liability partnership (LLP) would suit your business needs.

It is crucial to know about both these types of companies in order to assess which option would prove better for the business to flourish.

While both these legal entities: LLP and private limited have their distinct advantages and disadvantages, there are substantial similarities and differences too that we will look forward to in this brief piece of annotation.

LLP vs. Private Limited Company: Where does the difference lie?

Limited liability partnerships were first introduced in 2008 under the LLP Act and have been growing in number ever since.

Though LLP’s are not as popular as private companies yet they provide nearly all the benefits of a private limited corporation without any downsides associated with that of a partnership firm.  

LLP offers limited liability, offers simpler tax structure( there is no concept of dividend distribution tax as it is in Private Ltd.) , can facilitate accommodation of unlimited partners while offering credibility of registration from Ministry of Corporate Affairs (MCA).

1. Unlimited Accommodation of Partners

The minimum number of partners required in case of LLP is 2, with no limitation on maximum partners.  While in a private company the maximum number of members cannot exceed 200.

2. Taxation  


  • The rate of income tax applicable on an LLP is 30% where it is treated at par with partnership firms.
  • In the case of total income exceeding Rs 1 Crore, the amount of income tax gets increased through a surcharge at the rate of 12%.
  • Additionally, Education Cess at 2% and SHEC at 1% are also applicable.
  • Wealth Tax is not applicable for an LLP

Private Limited Company:

  • The rate of income tax for a private company is 25% in case they have a turnover of less than Rs 50 cores and 30% in all other cases.
  • Surcharge: When the total income of the company exceeds Rs 1 crore but does not exceed Rs 10 crore, the rate of income tax is increased at the rate of 7%. In cases, where the total income exceeds Rs 10 crore, the surcharge is applicable at the rate of 12%
  • Education Cess applicable is 2% and SHEC is chargeable at 1%
  • Wealth Tax is applicable at the rate of 1%.

3. Economic benefits:

Additionally LLP is more economical to the private limited company in terms of establishment cost and maintenance and also comes with fewer compliance regulations.

A private limited company has a minimum of 2 and a maximum of 200 members. Private limited companies have a wider range of applicability over LLP’s. While providing all benefits of an LLP, a private company differentiates between directors and shareholders. This makes it gain an edge over LLP in raising funding and attracting new talent by providing ESOP’s.

Personal Takeaway:

Employees nowadays look for additional benefits than just a high salary while getting associated with any organisation.  Attracting good talent definitely requires businesses to offer benefits such as stock ownership, training, and flexible timings. Out of all the benefits, stock ownership is definitely more valued as it makes employees feel they are a part of the business thereby motivating them to perform better. Thus, private companies have an edge over LLP’s as they can provide employees with ESOP’s and stock ownership which helps in reinforcing hiring for the organisation.

Hence, If you are looking to raise fund for your organization or reinforcing hiring in near term you can register with private limited. But, in case you have plans of running a traditional brick and mortar business, consider going for an LLP over a private limited corporation.

4. Ownership

Private Limited Company has offers greater flexibility when it comes to sharing of ownership with shareholders.

The ownership here is decided upon shareholding where the maximum number of shareholders can be 200. Moreover, since shareholders need not participate directly in the management of the company, it brings a clear distinction as well as transparency between share ownership and management.

Talking about LLP, there is no distinction between management and ownership. The partners of LLP hold both the ownership of LLP as well as the ability to manage it.

This is perhaps the reason a private limited company is preferred over LLP for any business considering FDI or ESOP’s or Venture capital funding.

5. Process of Registration

The process of registration for LLP and private companies is quite similar however the differences are there in terms of documents and forms that required for registration.

The steps involved in a private limited company registration are:

  • Seeking approval of proposed directors for obtaining Digital Signature Certificate
  • Getting Director Identification Number (DIN) from the proposed directors
  • Getting name approval from MCA followed by filing for incorporation

The steps involved for LLP registration are:

  • Getting a Digital Signature Certificate (DSC) from the proposed partners
  • Getting either Director Identification Number (DIN) or Designated Partner Identification Number (DPIN) from the partners
  • Obtaining name approval from MCA and filing

It is important to note that both LLP and private limited company are registered under Ministry of Corporate Affairs and are issued a certification of registration from the regulating body.

Moreover, the time frame for incorporation of both these entities is also comparable which is approximately 20 days for incorporation.

6. Registration Cost

LLP’s were introduced with a motive to meet the needs of a small business and hence they enjoy some benefits from the government which cannot be availed by private limited companies.

There is no minimum capital requirement in case of LLP, only incorporation charges are applicable which are Rs 7999/-. On the other hand, the minimum capital requirement for private limited company incorporation is Rs 100,000/. In addition, the incorporation charges are also there which are Rs 12999/-

7. Tax Structure and Compliance

LLP has a simpler tax structure where two taxes are functional – an income tax and an alternate minimum tax. This makes it an attractive option over the private limited company. Both the companies i.e. private limited as well as LLP have to pay an income tax at a rate of 30% of their taxable income along with additional surcharges depending on the total income.

The main point of difference lies in the fact that a private company has to also pay a dividend distribution tax applicable at the rate of 20.36% (15% tax plus surcharge and cess) on any amount declared or distributed by a private company to its shareholders. While in an LLP, there is no dividend distribution tax.

In terms of tax compliance associated with the Ministry of Corporate Affairs, LLP has a significant advantage over private limited.

An LLP is not required to get its account audited if its annual turnover is less than Rs 40 lakhs or the capital contributions are less than Rs 25 lakhs.

8. Transfer of Shares

In a private limited corporation, a shareholder has the right to transfer his share to any other shareholder. However, in an LLP share transfer are strictly governed via regulations of an LLP agreement.

9. Voting Rights

The factor for determining voting rights in a private limited company is the number of shares held by a shareholder. While in an LLP, voting rights are decided as per the agreement.

10. Annual Meetings

A private limited company is subjected to conduct regular annual meetings and board conferences as per the regulations mentioned in the Companies Act. An LLP is not subjected to such compulsions.

11. Foreign Ownership

Foreigners are not permitted to invest in Private Limited companies under the automatic approval route for the majority of sectors.

On the other hand, Foreigners can invest in an LLP provided they are given approval from Reserve Bank of India (RBI) as well as from the Foreign Investment Promotion Board (FIPB).

For a better understanding of similarities and differences between an LLP and a private limited company, we have come up with a tabular distinction:

FactorsLLPPrivate Limited Company
Prevailing LawIt is prevailed by Limited Liability Partnership Act, 2008It is prevailed by the Companies Act, 2013
RegistrationIt is required to register with the MCA ( Ministry of Corporate Affairs)It is also required to be registered by MCA
Number of MembersMinimum-2Maximum- unlimited partnersMinimum-2Maximum-200 members
Compliance RequirementsAnnual Return FilingAnnual Return Filing Board Meetings & General Meetings
TaxationProfit of LLP is taxed at 30% cess

Education Cess at 2% and SHEC at 1% are also applicable.
Wealth Tax is not applicable
Income of private limited is taxed at 25%  for turnover less than 50 Cr while at 30% for turnover exceeding 50 Cr

Education Cess applicable is 2% and SHEC is chargeable at 1%
Wealth Tax is applicable at the rate of 1%.
Dividend Distribution Tax20.36%Nil
ConversionCannot be converted into a private companyConversion into LLP is possible
Foreign OwnershipPrior approval of RBI is needed by a foreigner to invest or become a member of LLPForeigners can invest in a private company under the automated approval route
Venture Capital FundingNoYes
Ideal ForPeople looking forward to raising capitalTraditional Brick & Mortar Business


Hence, having looked over multiple factors and considering all aspects we can say that LLP is ‘more flexible’ while the private limited company is more ‘old yet reliable’.

While your end decision to go with LLP or private limited company can depend on many factors such business requirements, future plans and most importantly the kind of liability you want to get involved with, a right choice will definitely bring a great impact in paving a road for your business success.