The Real and Hidden Costs of A Sales Team


Alex Alexandrou

The Real and Hidden Costs of A Sales Team

Many business owners have been in limbo for the last 2 years. They have not wasted these years, they have spent their time doing what they needed to do to stay in business and also worked on ideas, research, plans, and strategy on where they will take their businesses when things return to normal.

All the business owners we are currently talking to (and there have been a lot), all feel we have now reached the “new normal.” And they are very keen to get to work on all the things that they have been researching, planning, and strategizing to grow and scale their businesses.

A very common topic of conversation we are having with these businesses that are experiencing growth or are attempting to scale is the potential benefits of new sales hires against the financial constraint that they can cause.

And this is a very valid concern as there is a large number of real and hidden costs associated with building and maintaining a sales team for a business. 

While employees can have huge potential to add dramatic value to your business, they cost money, affect cash flow, and take time to become cost-efficient.

To assist these business owners to make the best strategic decision on building and maintaining a sales team we have developed the following list of real and hidden costs of a sales team.

Real Costs of a Sales Team

The total cost of an employee is their total compensation plus any additional expenses the business accrues as a result of hiring and employing that person. It can be really surprising to discover the real costs of a sales team when you write down all the costs per new sales recruit:


A minimum investment of $164,684 per salesperson can be a tough pill to swallow, especially if you consider there is no guarantee your new recruit will perform at the required level. 

It can also make the loss of staff even more painful when you consider the entire investment made in them over the term of their employment. A sobering thought that may move talent retention strategies up on your strategic planning to-do list!

Now, this figure may seem high but unfortunately, there isn’t a silver lining for business owners in this article yet, because there are also a number of hidden costs associated with building and maintaining a sales team that only further increase your overall investment.

Hidden Costs of a Sales Team

Hidden costs are unforeseen expenses or figures that are difficult to calculate because factors and variables can vary greatly or are unknown. Here are some of the most common hidden costs we have found when it comes to building and maintaining a sales team:

New Employee Onboarding

In researching for this article we were unable to find a credible average dollar amount businesses spend on Induction Training and/or new employee onboarding. 

This could be because it can be difficult to actually calculate what new employee onboarding actually costs a business because:

  • It takes multiple employees (often including top level management) to carry out the onboarding process and induction training
  • Induction / Onboarding processes vary in length and complexity
  • The process and procedures are developed over time
  • Costs of onboarding vary greatly for different types of businesses i.e. tech based companies spend a great deal more time and resource setting up logins, security and access for new employees

It might also be because businesses are not readily investing in a formal new employee onboarding or Induction program. Gallup found that only 12% of employees strongly agree their organisation does a great job of onboarding new employees. That means 88% don’t believe their organisations do a great job of onboarding, indicating a lot of room for improvement.

In our experience working with various sized businesses with their sales onboarding, induction,- and ongoing training and development, businesses spend between $5,000 to $25,000 per annum just on employee onboarding and induction.


Lost Productivity of New Hires

A recent study by Mellon Financial Corp. found that lost productivity resulting from the learning curve/ramp-up time for new hires and transfers was between 1% and 2.5% of total revenues. 

In our experience at MentorsOnline, this figure trends a lot higher when it comes to new sales hires as they have a direct impact on the generation of revenue. 

From our research into our competition offering Done-For-You Sales services claiming to supply professional closers on comms only terms to businesses, we discovered that 70% of their closers don’t make it past the 3-month mark and the 30% that do, usually take between 3 to 6 months to produce effective closing ratios in their sales. Based on these numbers, imagine the impact on your business and your revenue!

Mellon Financial Corp. also found that on average, the time for new hires to achieve full productivity ranged from 20 weeks for sales professionals to more than 26 weeks for executives.

Investopedia also reports it can take up to six months or more for a company to break even on its investment in a new hire. 


Opportunity Costs

Opportunity costs are difficult to quantify when attempting to build your own internal sales team and using trial and error to develop it.

When economists refer to the “opportunity cost” of a resource, they mean the value of the next-highest-valued alternative use of that resource, or in simpler terms you choose to recruit a particular new sales professional, the opportunity cost is hiring a different sales professional, or alternate use of the time and money that you invested in that new sales professional (increasing marketing spend or contracting a sales agency).  

Imagine the potentially compounding effect by considering if when you hire that sales professional, they are unfit for the job, firing and re-hiring can be costly and can cause your company to lose sales and existing clients due to the performance of the poor fit salesperson, lose forward sales during the time it takes to recruit and develop a replacement and finally there is the potential loss of reputation and credibility from that unfit sales professional.

Additionally, using a trial and error approach with your sales strategy can result in opportunity costs. The time and resources used in this approach cannot be invested in a more proven approach to sales that has the greater potential of increasing your sales revenue in a shorter time frame. The more proven approach may be a greater initial investment but would lead to a huge reduction in opportunity cost and have a greater return on investment.


These costs written down in black and white can feel like a glass of cold water thrown in the face for entrepreneurs with visions of rapid growth and scale.

But don’t lose your rapid growth mindset just yet…

Don’t Lose Your Rapid Growth Mindset Just Yet

Many savvy and successful business owners have calculated these costs and decided not to do it anymore.

What? I hear you say. How on earth can these business owners survive let alone thrive without sales, without a sales team?

They are opting to eliminate the time, money, resources, and energy spent in establishing, developing, and managing their own internal sales teams and are outsourcing the entire sales function to real sales professionals offering complete done for you sales services.

The #1 reason these business owners are investigating the option of done for you sales services is that it is a fraction of the upfront investment required for just one new sales professional! 

Plus, ongoing investment is based on actual performance and sales generated. Imagine the growth potential.

MentorsOnline.Com offers a world-class and unique partnership that ensures that you no longer have to advertise, interview, recruit, hire, induct, train, develop and manage a sales team ever again. We take care of this for you. 

The EBS-T certified Growth Consultants we provide to represent your brand, product, and services are already recruited, inducted, and trained by MO, and are ready to handle the appointments you have booked.

With MentorsOnline the bitter pill of a start-up minimum investment of $164,684 per salesperson doesn’t exist – we can eliminate this barrier to your business’s growth and scale.

We think a potential opportunity cost saving of $164,684 is worth your time and attention for a FREE 45-minute strategy session.

Do you?

If you agree, book a time to see if your business meets the criteria for our exclusive Done-For-You-Sales Partnership.


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