Dear SaaStr: How Do You Structure a Sales Team At $10m ARR
Don’t figure this all out yourself — it’s too complicated. You need to hire an experienced VP+ of Sales to do this for you. By $10m+ in ARR, it all does start to become a formula.
A few things to think about though as you approach $10m in ARR:
- You’ll probably need 1 sales manager, let’s call them Directors of Sales, for each 8 AEs and maybe 10–12 SDRs. Start modeling that in and budgeting it. So as you pass 10 reps, you’ll need a middle level of management (Directors) in addition to your VP. These 8–1 and 10/12–1 ratios are pretty much everywhere in SaaS Inside Sales + SDR teams, respectively.
- You’ll probably need a “VP” for each 4–5 Directors, i.e. each 30–50 sales reps. In the beginning, that can just be your VP of Sales. But she’ll need VPs under her as you approach 50 reps. So plan for two tiers of VPs at 75-100+ reps.
- You’ll want to segment sales by $10m ARR, at least into Small, Medium and Large customers. Larger customers may need a true field team, which is its own specialty.
- You’ll want to start adding local offices in other countries and geographies once each area adds $1m-$2m in revenue. That’s “material”, so it’s time to staff up each of these geographies with a small dedicated team so they can each grow to $10m+ ARR.
- You’ll probably want a Sales Engineer and/or Solutions Architect for each 8–10 sales reps. Someone that can support sales on the more technical side.
- You’ll probably need a Sales Ops/Enablement professional for every 30–50 sales professionals — and hire the first one early. You’ll need dedicated owners of training and onboarding. Dedicated owners of territories and compensation plans. Etc.
As you can see, it gets complicated. Hire someone to do this for you. It’s too much to figure out and manage on your own. Way too much.
(note: an updated SaaStr Classic answer)
