For private equity firms (PE firms), one of the biggest challenges is scaling the sales department of portfolio companies to boost revenue. Often, private equity firms acquire companies that need to develop resources and processes to maximize growth. While PE offers plenty of money to invest into the company, they have to create an effective, repeatable sales process in a limited time frame. In fact, PE firms only hold companies for 4.9 years on average — so how can they optimize this time frame to gain maximum profits?
Hiring a sales consulting firm helps solve a myriad of problems private equity firms run into when rapidly growing portfolio companies’ sales operations. A sales consulting firm can provide the resources and expertise to effectively grow sales operations at the rate PE firms need.
1. Entering New Markets is a Gamble. Sales Consulting Firms Help Mitigate the Risk
One of the best benefits sales consulting firms bring to a private equity firm is the ability to enter new markets with lower risk. Often, one of the only reasons portfolio companies have yet to enter new, potentially profitable markets is due to a lack of established, standardized processes and training. Sales consulting firms are able to offer multiple solutions to this problem. They can hire small, temporarily outsourced teams already well-versed in the new market to test its profitability, and can also expand and train the in-house team to take on the new consumer base.
For example, if the portfolio company is seeking to expand its offering from the U.S. into Italy, it’ll need to understand Italian cultural norms and best sales practices. Sales consulting firms can briefly serve as an outsourced sales function while developing the in-house sales team into a powerful sales force that can take on the Italian market. This helps scale sales operations into new markets quickly and effectively with minimal risk, optimizing profits.
2. Portfolio Companies Often Have Ineffective Sales Operations
Plenty of companies acquired by private equity firms have grown so quickly that they lack the proper sales processes to accommodate their growth. For example, plenty of tech startups purchased by PE firms experience incredibly rapid rates of growth and have yet to catch up with their own product demand. In the early stages, startups can grow as fast as 114% per year. Sales consulting firms are able to assist in restructuring and expanding sales operations to better suit the portfolio company’s size and growth goals.
With a rapidly growing, newly acquired startup, the PE firm may be facing sales difficulties on multiple fronts. Often, sales operations are inefficient, the administration needs to be replaced, or processes aren’t functioning as smoothly. A sales consulting firm can assist in finding the best fit for leadership, hiring additional reps, and standardizing sales processes and best practices throughout the company to professionalize operations at scale.
3. Sales Enablement Technology, While Necessary for Growth is Complex
As the world becomes increasingly digital, sales enablement technology adoption rates have grown exponentially. In fact, 94% of organizations are planning to invest in sales enablement technology this year. The right sales enablement technology can help sales operations run more efficiently by:
- Facilitating communication both internally and externally
- Automatically logging sales rep activities
- Providing insights on buyer behavior and sales rep performance
- Increasing productivity and reducing the need to carry out time-consuming manual tasks
Sales enablement technology ensures that private equity firms are enabling their portfolio companies’ sales ops to remain on the cutting edge, rather than falling behind the competition. Hiring a sales consulting firm with expertise in sales enablement software solutions like Salesforce makes it that much easier to implement the right technology to strengthen sales operations.
Sales consulting firms with extensive experience and knowledge of sales enablement software can help teams adopt the necessary sales tools and seamlessly integrate them into their daily practices. Having easily accessible experts on hand allows the sales team to not only receive the best initial training on the technology, but also helps the sales team navigate any roadblocks they encounter when implementing the tech into daily operations.
4. Private Equity Firms Expect Accelerated Pipeline and Revenue Growth
Private equity firms often acquire companies with a great product and massive potential, but a limited sales pipeline. While sales consulting firms can help educate and train the sales team to acquire leads and move them through the pipeline more efficiently, this takes time.
Since private equity firms are seeking to ramp up sales as quickly as possible, a sales consulting firm can supplement the in-house team by outsourcing top-of-funnel lead generation until the in-house team is ready to take it over. This keeps sales functioning efficiently as the in-house team scales to the needed size. In the interim, the sales consulting firm can supplement the portfolio company’s lead generation function, filling the funnel with highly qualified leads through:
- Market research
- Deployment of a robust technology stack
- Inside sales follow-up and outreach
- Inbound and outbound marketing initiatives
- Testing of new markets and geographies
Private equity firms have limited time to scale portfolio companies’ sales functions to reach profit goals. Hiring a sales consulting firm can help solve some of the most common problems PE firms face, enabling portfolio companies to rapidly and effectively scale sales ops and other sales functions.
Interested in how sales consulting can help build and professionalize sales operations? Get in touch with SFE Partners and learn about the consulting services we can offer to improve the market valuation of your portfolio companies.