Setting Sales Goals

Currently, I have a small software consultancy practice. In fact, its just me. I'm not much of a sales individual, but I've been good enough at it to move along. I believe that in order to grow my business, it would be wise for me to bring someone on that can focus on performing sales. In addition, I've created a very small product.

Ideally, I would like to hire a sales representative that is willing to sell software consulting services. Then, while I'm busy delivering the services, the individual can try to sell the small product I've created. After learning how well this works, I'd like to bring on another delivery individual.

My question is, what kind of sales goals are reasonable? Is a quota a good way to go about this? If so, what kind of quarterly revenue target should I set for this individual?

This is a bit of a leap of faith for me. As an individual, the wrong approach could cost me my company. Does anyone have experience in crossing this threshold? If so, what advice can you share?

I've found it is very difficult to get this right. The problem you run into is that if you want someone to concentrate on your product, you have to pay them enough to put food on the table and a roof overhead. Early on when sales are scarce, this means a large part of what you take in will go to pay the sales staff. This wouldn't be so bad, but it seems to set the expectation that the rate will continue, something that would preclude your ability to grow the company due to sales costs that are out of line with reality.

If you don't have someone that is focused on your product offerings (services in this case), you can't find someone that will be fluent enough to talk intelligently to the customer, and so you end up looking stupid and they don't want to do business with you. Most sales people are severely handicapped in the engineering side of things, that's why they are in sales, to build the relationships (that engineers have a hard time with) that you can profit from.

A friend of mine that runs a consulting business has solved this by making all his coders salespeople, giving them a commission on top of their salary for new work that they bring in. This puts them in a position to help grow the company and their own paycheck every time they are in front of the customer. It seems to be working for him, he gets competent engineers selling the concept of the work in front of the customer, he deals with the closing and pricing, and his business has grown as a result of it.

I would base your sales estimates on your current sales (monthly or yearly), put an increase on top of that like 20%-50% (if the person isn't increasing sales, why are you hiring them?) and then use that to drive what you can afford. I would also make the initial hire have a short (3-6 months) term review period so you can evaluate whether the arrangement is working as expected.