A scenario
What happens if we hire ten salespeople
Cash goes out for two quarters before the first of them clears quota. The ramp is the part most plans leave out, and the quota arithmetic underneath it is the part that turns a growth decision into an attrition problem.
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Ships as a scenario: one lever, sales_reps_delta at 10, landing in month one.
Mechanics
What the model does with it
Ten reps are not ten reps. They are ten hiring costs now, ten salaries now, and a selling capacity that arrives in thirds.
Cost lands in full, capacity lands at nothing
Each new rep is pushed onto a ramping list with an age of nought and a ramp length from the ledger, three months by default. Headcount rises by ten, the rep count rises by ten, and ten times the hiring cost assumption goes into the one off line and out of cash that month. On the invented Harborline twin, at a manufacturing cost per head of 6,400 dollars, that is 64,000 dollars a month of new salary and 80,000 dollars of hiring cost in the first month.
Selling power arrives in thirds
A ramping rep counts as its age over its ramp length, capped at one. With a three month ramp on a base of three existing reps, effective selling power runs at about 1.0 times its starting level in month one, 2.1 in month two, 3.2 in month three and 4.3 in month four when they come off the list. New business scales with that to the power of 0.7, so new logos run at roughly 1.0, 1.7, 2.3 and 2.8 times the starting rate.
Quota does not ramp
Attainment is what got booked divided by quota times the number of reps. The denominator quadruples in the month you hire and the numerator does not. Attainment falls, and it falls hardest in exactly the months the new people are least able to do anything about it.
Low attainment makes people leave
Rep attrition is the base assumption multiplied by one plus 1.6 times however far attainment sits below 0.85. Every month there is a chance, scaled by the number of reps, that one leaves. Unless hiring is frozen, that rep is replaced at full hiring cost and starts a fresh three month ramp, so the ramp curve is not as clean as the plan drew it.
If the pipeline lands, capacity becomes the constraint
New customers are served by the same people as everybody else. Utilisation is revenue over headcount times revenue a head can serve. Above 1.12 the strain counter runs, quality slides toward a lower target, satisfaction trails it, and churn takes the difference. Selling more is not free on the delivery side and the model does not pretend it is.
Morale is in the selling power term
Effective selling power is multiplied by 0.7 plus half the morale index. That means everything else in the model that moves morale, a cut elsewhere, an acquisition, a high utilisation month, also moves what your sales team can do. It is a small coefficient and it is there because it belongs there.
The discounting rule stays asleep unless you wake it
If the sales lead has discount authority, three consecutive months under quota triggers field discounting at half to all of the authority granted, applied to the new business price. That is a price cut nobody decided to make. It only fires if you set the discount authority lever, so a plain hiring scenario will never show it. If your reps do have authority in real life, add the lever, because this is the scenario where it bites.
The ecosystem
Which agents move, and why
Hiring is the scenario where the agents inside the sales organisation do most of the work, and where their objectives pull against each other.
- Salespeople weight hitting quota at 0.55, keeping their existing accounts at 0.25 and avoiding a quarter that ends their year at 0.2. Doubling the team without moving the quota pushes all three the wrong way at once
- The sales lead weights hitting the number at 0.55, keeping the team from leaving at 0.25 and keeping price defensible in the field at 0.2. The third objective is the one that loses when the first two are under pressure
- The operations lead weights delivering what was sold at 0.5, and hires about five percent more heads after two strained months if runway is above six
- The finance lead weights protecting cash at 0.4 and acts on runway, which is the mechanism that turns an over ambitious hiring plan into a cut two quarters later
- Customer segments absorb the new logos and apply their own churn to them. New customers are not more loyal than your existing ones
The ledger
What this answer is standing on
| Assumption | What it does here | Why to check it first |
|---|---|---|
| Months for a rep to ramp | Sets how fast the selling power term fills in | Three months is a software default. In a business with a long qualification cycle it is closer to nine, and the whole answer moves |
| Cost to hire one person | One off cost per rep, plus the same again on every backfill | Includes agency fees in most real records and does not in most estimates |
| Monthly cost per head | The permanent cost of the decision | A sales cost per head is usually above the company average. If you use the average, this scenario is too cheap |
| Monthly quota per rep | The denominator that makes attainment fall the moment you hire | If this is missing, the attainment machinery does not run and the scenario loses its teeth |
| New customers per month | The base the selling power multiplier scales | Everything good in this scenario is a multiple of this number |
| Monthly sales attrition | Scaled up by 1.6 times the shortfall below 0.85 attainment | The feedback loop that makes a hiring plan eat itself |
| Revenue a head can serve per month | Turns won business into strain | The constraint that decides whether the growth is deliverable |
Run sensitivity on this scenario before arguing about the plan. It measures which of these is moving the answer rather than asserting it.
Honestly
Where this is weakest
This is the scenario where the model is most likely to be too optimistic, and the reason is worth stating precisely.
New business scales with effective reps over starting reps, to the power of 0.7, with no ceiling. Going from three reps to thirteen multiplies that term by more than four and new logos by close to three. Nothing in the engine says there are not enough companies in your territory to sell to. The market growth term is separate and small, and there is no saturation.
- No territory, no total addressable market, no saturation. The only brakes are quota attainment and delivery strain
- Every rep is the same rep. No variation in ability, no difference between a hire and a rehire, no manager quality
- One ramp length for everybody, with the ramp entirely linear
- No onboarding load on the people training them, even though that is where a hiring wave usually costs the most in the first quarter
- No sales management layer. Ten reps on a team of three would need one in practice and the model does not add it
- The quota is not renegotiated. In reality somebody moves it, which changes the attrition feedback entirely
The spread
Six hundred and forty hiring plans
What people ask about this one
How many should I actually hire?
Run a sweep on the same lever rather than testing ten. Twenty five steps at eighty replications is two thousand simulations and returns a curve with a best point. The useful output is usually not the peak but the point where the p10 path stops being acceptable, because that is the number of hires your cash position can survive being wrong about.
Why does my operating profit get worse before it gets better?
Because it should. Salary and hiring cost land in month one and quota lands in month four. If your run shows profit improving in the first quarter, check the ramp months assumption. It is almost certainly too short.
Should I hire salespeople or cut price?
Run both against the same baseline on the same seeds and put them side by side. They buy the same thing, volume, with completely different cost shapes: a price cut is immediate and permanent, a hiring plan is front loaded and reversible. The comparison is more useful than either scenario alone.
Does the model handle hiring non sales people?
Yes, through a different lever that adds headcount without adding quota or a ramp. Capacity rises after onboarding and cost rises now. Use that one for delivery or support hires, and use this one only for people who carry a number.
Next
The questions this one leads to
Find the number before you write the requisitions
A standard run is 400 simulations in about a tenth of a second. A sweep across the whole range is two thousand, and it answers the question the plan was guessing at.