Stability Does Not Exist In Software Sales

This article was first written by us last year, but seems like a timely re-print. Enjoy!

These are the words of a fellow software sales professional stemming from a conversation last week about stability in our industry. We were discussing the merits of being with a large, established company versus a small/mid-sized, growing firm and how either situation relates to stability. And, with the average tenure in software sales sitting at less than four years, frankly, she nailed it.

Some view larger companies as having a higher level of inherent stability. This perception, however, is largely not reality based. Larger firms can most easily and rapidly control costs via headcount. Shutting down an office often takes place as a macro cost cutting action, and sales reps making their numbers are frequently not spared. Take that large firm, make it publicly traded and you now have the variable of Wall Street with which to contend. Steady, “up and to the right” growth is what they need to see. When they don’t, and the stock is down graded, the quickest way to appease the analysts is to cut headcount. Additionally, many larger firms view their sales professionals as easily replaceable since their product suites are so widely known and recognized.

While we believe small to mid-sized companies with software unique to their space to be more stable, their volatility is still present. One upside is a more direct line exists between profits of a small/mid-sized firm and the individual sales person, making your value much more realized and identified in such a company. Conversely, assuming the firm is well funded or profitable, most up-and-coming software companies are seeking enough market penetration and marketshare to become attractive enough to be purchased. A well negotiated option plan on the front end can reward you for your efforts, but likely isn’t going to equal immediate retirement upon the sale of the company.

So how do you provide more stability for you and your family? First, adjust your perspective and you will find the answer to be quite simple. Stability does not reside within the company but rather within you. Stability is not staying with the same company a number of years, it is making a consistent income by achieving your quota with whatever company for whom you happen to be working.

Making your numbers will create stability for you in three ways. First, you will make a very good income. The average at plan is $220,000 per year. If you exceed your number, you will most likely be making in excess of $300,000. Second, when cut-backs are made you are less likely to be hit when you are meeting and/or exceeding your numbers. Third, if your company does cut your position or you determine it is time to make a move, quota meeting and exceeding reps rarely have a tough time finding another lucrative software sales job (particularly if you know a good recruiter).

~ by kevinkermes on August 4, 2008.