Even when a new sales hire does 500K in sales the first year, the parent company may have negligible profits, or even report a loss.  When you add salaries, benefits, equipment and overhead costs, administrative personnel costs etc, the 150K gross margin may not cover expenses.  Hiring Sales people, though, is like Woody Allen’s comments about a successful marriage.  He says finding a good partner is like finding the goose that lays the golden eggs.   He keeps looking because he needs the golden eggs.

What is a good revenue number for a first year sales hire for a mid-level (>$25 million) or small > $5 million) LSP: $500K.  Let’s add several assumptions.  The sales person cannot bring on board recent, previous business.  The LSP does not have a huge marketing effort and there is limited ‘existing’ business that is inherited.  To expect a $1,000,000 in revenue the first year, without the above support is: ‘magical thinking’, arrogant, ignorant…all of the above.