Background: I am a developer with a SaaS product that is bringing in revenue, but not enough to pay a sales person's salary (yet). The company shouldn't need outside funding. The product is generating cash flow, people love it, and it is ready to scale in the cloud. This product is in a $10M niche market.
The next goal is to establish key relationships with niche store fronts (where customers are) to boost sales, create buzz, build awareness. As a coder at heart, this is NOT my forte.
How you compensate sales people differs greatly by region. Chicago, Boston, San Fran, Austin, NYC will likely have very different comp structure and expectations than Portland, OR.
Also, different SaaS products have very different sales cycles and different sales process, so you really need to educate yourself before you get taken advantage of.
This is by far the best piece of research on the subject of how SaaS is sold: 2011 Pacific Crest Private SaaS Company Survey I know in Boston good (I have my own formula what I look for, you will need to develop yours specific to your business) SaaS inside sales person will likely need to be in $100K+ OTE, so the base and commissions comp structure has to be built accordingly. Don't forget that it takes time for someone to ramp up and many don't have the patience for longer rampup (impatience is often what on of their good features). Notice I am not mentioning equity anywhere? Because 75% of sales people you hire will not make it and they know it. And until you have hired you 20th or 30th sales person, your "batting record" may be even worse. I know I got hours and hours of stories of hiring and managing sales people. I have A LOT of respect for those sales managers who have hired and managed hundreds. It takes nerves of steel.
Last month I did write an article on the subject of hiring sales people: 6 Lessons Learned – Hiring the Right Inside Sales People for Your Young Company
This is not easy, it's very risky and you never know what kind of person it's going to be, and paying in cash IMHO is not really an option at the very start.
With attracting good people it's good enough to establish contact by posting some very good job offers, in reputable places. You can find some by taking the top 3-5 sites from google, have a read on the current offers for the sales and make something which looks attractive - e.g. commission rates.
During this time, he can also optimize the website (important for sales) and try to make improvements on his own in the sales process, e.g. in contracts, negotiation, project management etc. This way, he might actually make money for himself.