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Should I hire a new salesman for the Michigan / Indiana Territory (No: We…
Should I hire a new salesman for the Michigan / Indiana Territory
No:
We do not want to continue to grow the Michigan / Indiana marketplace
Cost Savings: $60,000 - $80,000 p/Year
Net Difference: (+) $ 10,000 - (+) $30,000 p/year (1st 8 Years and - $400,000 p/year after 8 years)
Lost Sales: - $2,000,000 / 8 Years = - $250,000 p/year
Lost Margin: $400,000 margin p/year, 8 Year Reduction To $0 = - $50,000 p/year
Lost Sales - $2,000,000 / 5 Years = - $400,000 p/year
Lost Margin: $400,000 margin p/year, 5 Year Reduction To $0 = - $80,000 p/year
Cost Savings: $60,000 - $80,000 p/Year
Net Difference: $0 - (-) $20,000 p/year (1st 5 years and $400,000 p/year after 5 years)
Yes:
We want to stay in the Michigan / Indiana marketplace
Goal Being To Grow By 10% p/year = $200,000 (sales) and $40,000 (margin)
Goal Being To Maintain
Put a lower cost or part time salesman on the road
Benefit: More personal relationship with customers and a more caring company image
Negative: Net Cost $60,000 - $80,000 p/ year
Benefit: Increased accuracy of marketplace conditions report
Negative: Higher turn around with low cost / part time employees
Negative: Higher Cost of Training (due to remote location)
Benefit: Possible room for advancing into key positions that will require experience and need to be addressed in the next 4-7 years
Estimated Results: Maintain Business at 97% - 105% of current sales and margin: (-) $12,000 - (+) $20,000
Cost / Benefit compared to walking away would be: (-) 38,000
Assign a more dedicated inside tele-salesperson to the area.
Negative: Net Cost $20,000 - $30,000
Benefit: Lower cost to the more traditional outside salesman option
Estimated Results: Maintain 90% - 95% of business = (-) $20,000 - (-) $40,000 p/year loss in margin
Estimated Lost Margin + Additional Cost: (-) $40,000 - (-) $70,000
Cost / Benefit compared to walking away would be: (+) $10,000 upside p/year and longer life span to 0
Negative: Less in-person customer relation building (seems less personal)
Benefit: More opportunities for increased employee training, due to centralized location
Benefit: Faster response time on question
Negative: Less control of culture affection situations (at this time, would change as we progress on culture shift)
Could we use the resources better somewhere else?
No,
Focus on the below Michigan / Indiana Scenarios
Yes
: What is it? Skip the below Michigan / Indiana Scenarios and begin working on how you would use the resources in a more efficient way.