In the early years of the company there is a tendency to hire large workforce. Every management wants to hit the ground running and gain maximum market share. Managements often look at the markets like New York and say, well there are around 1000 potential clients in the area so we need around hundred sales teams, as by industry average one team can efficiently and effectively handle ten clients.
In their quest to jump the gun, management start employing resources into creating a sales infrastructure supporting hundred sales teams. But one thing most forget to focus is that by this time they are only guessing and if they are wrong they will end up loosing a lot of money on those sales teams.
What Should Companies Do
When starting a Business to Business (B2B) model, a company should try to start with small sales teams. Companies have to understand that these teams may not able to handle all the clients in New York but what they can provide is the real time analysis of market potential.
Once the Market potential is analyzed company should start building the sales force accordingly. This approach leads to two great advantages.
It saves the company from over shooting and help the company grow incrementally and modularly. Incremental growth more often than not finance itself so if your company is starting from garage or short of money in the beginning this is a perfect approach.
Secondly it will help the company in building an indigenous system which perfectly suits the company needs than wasting money on buying a 'one fit all' solutions present in the market.
For companies starting out don't focus on the size of the market but on how much business you can realistically do in a market. Build a model that lets you reach out.