How many reps should I hire next quarter, and in what order?

The headcount question answered as arithmetic: revenue target divided by revenue per rep and capacity utilisation, with ramp time and attrition built in. Use it before you sign off next quarter's hiring plan.

Sales Capacity Planning

From Everstage 12 min read

• Reps spend only about 30 percent of the week actually selling, the rest goes to admin and quoting.
• Capacity formula: revenue target divided by (revenue per rep times utilization), so 5M at 400K and 0.6 needs about 21 reps.
• Mid-market B2B SaaS reps carry 200K to 500K a year; enterprise reps 500K to 750K.
• Assume 60 percent capacity utilization and revisit the plan at least quarterly.

The clearest arithmetic anywhere on rep economics: the rule of 10 for quota against base, four months to productivity, draws during ramp, and why teams attain about 70 percent of quota capacity so you must plan over capacity.

Simple Math to Set Up a Sales Team

From Craft Ventures by David Sacks 12 min read

• Rule of 10: an AE's quota is 10x base salary, and the standard SaaS commission rate is 10 percent of ARR.
• Pay a 50/50 base to variable split, then accelerate to 15 percent commission past quota.
• Plan for a 4 month ramp and about 70 percent average team attainment, so carry excess quota capacity.
• Set a manager's quota at 80 percent of their team's capacity; below 400K new ARR per AE, sales-led may not pencil.

365 B2B companies surveyed on ramp, tenure, attrition, activity and comp. When you want to know whether your ramp is slow or your attrition is normal, this is the reference everyone quotes.

The 2023 SDR Metrics and Compensation Report

From The Bridge Group Report, 20 min read

Names the two ways founders get the timing wrong, scaling too early and scaling too late, and walks the progression from founder selling to pods to a real team. Useful precisely when you are deciding whether it is time.

Founding Sales, Chapter 10: Early Sales Management and Scaling Concepts

From Founding Sales by Peter Kazanjy 35 min read

• A good B2B win rate is 15 to 30 percent, and hitting it is the signal you can add reps.
• Sales cost should stay at 20 to 25 percent of the revenue closed; a 100K rep needs to bring in about 500K.
• A dedicated sales ops hire pays for itself around 10 reps, adding roughly 50K in bookings per rep.
• Metrics-driven management moves manager ratios from 1 per 5 reps to 1 per 8, cutting cost of sales by about 40 percent.
• Baseline SDR output is about 10 new qualified meetings a week.

Seven minutes that show the arithmetic on screen: target, per rep yield, expected attainment, ramp, attrition. Watch it once and you can build your own hiring plan in a spreadsheet the same afternoon.

The Ultimate Sales Capacity Planning Guide

On LeanScale 7 min