PDA

View Full Version : Hiring a salesman??


chrisvinky
03-13-2012, 09:32 PM
I have been entertaining the idea of hiring a salesman to work on straight commission. I have a friend of mine that is an excellent salesman that I have approached about this and he is all for it. My question is, has anybody else done this and what percentage did you pay? What else do I need to think of or know? I am a one man operation now but am eager to grow. I have been stagnant where I am for about two years now. He said he would probably go after bigger accounts like apartment complexes, factories, etc... that he could make more on.

Any help would be appreciated!!

Wright48
03-13-2012, 11:36 PM
First of all if hes a friend i wouldnt hire him friends and family are the best when it works our and there nothing worse when it doesnt work out. I would only give him commision in full on jobs that are one time things ilke pavers or plantings for lawn contracts i would break his commision down monthly so that way you dont pay him commision on an account that has left you. Also you have to be careful to make sure he knows how do bid jobs and the work that is involeded its not just selling the jobs its knowing the field. You can bid a 6000 dollar patio at 5000 your loosing money. Also after he is you salesman you have to make him sign a non compete clause because if he leaves hell steal all your customers.
MY ADVICE THE HELL WITH IT HIRE SOMEONE TO FILL YOUR SPOT ON THE JOB LIKE A FOREMAN. READ ABOUT SALES AND MARKETING AND YOU TAKE THE EASY JOB OF SALESMAN YOURSELF.

TuffWork
03-14-2012, 12:02 AM
Give him a one time commision on everything. One price for one time gigs, and another for contracts. Only pay once. No "hiring" or "firing" about it. You tell him when to get you jobs and when to stop.

FinerCutslawnCare
03-14-2012, 12:10 AM
I don't like hiring friends. Have done it numerous times in the past and they always say "I will work my butt off for you" but something always goes wrong. I have only had one friend that has kept to his word. But with that being said having a salesman would be a good idea.

HPSInc
03-14-2012, 12:17 AM
they sure can make you a ton of money. you know your friend better than any of us so ultimately its up to you to decide. if he gets you work and something your both happy with as far as commision goes i cant see too big of an issue. the stealing customers if he leaves can and does happen. it can cripple a landscape company if a long time salesman leaves to another company. most of the people go with the salesman, not the company. ive seen it happen. and ive seen lawsuits come from it too when the company sues the salesman who left and stole all the customers.

also to comment on finercuts, i have had friends kick @ss with me and had some totally crap out, complain, slack, and then want more money. its funny how that works with friends

Lbilawncare
03-14-2012, 01:17 AM
I recommend that you do not pay anyone on commission alone. I have seen sales guys lowball deals just to get the account and the commission. The company can't keep up with the demands of all the new business without going in debt to buy new equipment,etc. The only way for them to actually make money is to cut corners, eventually harming their image. Most companies pay a base salary plus 2%-3% of actual sales.

jdutcher003
03-14-2012, 01:43 AM
It doesnt mean the sales guy has to bid it for you. he can get you the bid and then you bid it at the proper price. you can give him a small amount maybe for even getting you a bid and then if you sign the deal he will get more. I dont know if this will work never needed a salesman i am just a solo guy for now

billpiper
03-14-2012, 09:21 AM
I have been entertaining the idea of hiring a salesman to work on straight commission. I have a friend of mine that is an excellent salesman that I have approached about this and he is all for it. My question is, has anybody else done this and what percentage did you pay? What else do I need to think of or know? I am a one man operation now but am eager to grow. I have been stagnant where I am for about two years now. He said he would probably go after bigger accounts like apartment complexes, factories, etc... that he could make more on.

Any help would be appreciated!!

If you're a solo operator looking to grow, and you hire a saleesman and heis able to bring in a substantial amount of work, do you have enough equipment to put togther a second crew? have you run the numbers to figure out what it will take moneywise to add another crew to take care of the new business? Is your friend going to sell for you full time or in his spare time? If full time, can yoiu afford to pay him enough for him to make a living. Do you have enough profit in your jobs to pay him commission and still make enough to keep the company open?
For example, and all this is just pulled out of the air; You have 100 customers you cut weekly at an average of $50 per cut, or $200 a month at a 25% gross profit margin ($50 a month) If you pay your friend a 10% commission on what he brings in ($20), Your gross drops to $30 a month off that customer. If your friend needs to make $500 a week, he needs to bring you 25 customers (on contract, or at least repeat business) before he can make that, assuming you're going to pay him 10% as long as you have that customer. Are you going to pay him that way or are you going to pay him a one-time commission for that customer, and do you have the cash to fund that commission plan?
Assuming your fairly full now, that extra 25 customers may push you to a second crew - and 2d set of equipment, trailer, mower, etc. There's $5K to $10K out for equipment. Got cash for that or are you going to have to borrow it?
If your friend is your full time salesman, and he's any good, he could sell you out of business. It happens. If you tell him to stop because you have all you can handle, he's gone because he needs to make a living. If he's part time, working 2 jobs, that usually means neither job gets done well. We haven't even touched on marketing materials, mailings, etc.
In your shoes, I think I might add a helper to speed up production to allow time for me to do the selling. As I grew, that helper could become the leader for my second crew. Tha way you can grow at a comfortable rate.

Somebody on this thread said selling was easy. Bull.

billpiper
03-14-2012, 09:26 AM
I'd like to hear the opinion of some who have bigger companies with a sales staff address this issue with comments about commissions, duties of the sales staff, growth rate, etc.

Any takers?

Superior L & L
03-14-2012, 09:30 AM
Not to be an ass, but if you are a one man show, you need to relook at your business model if you do not have time to sell. This is prime time selling right now and not a lot of production time. Starting Monday we will have 3 people knocking on doors and blowing people's phones up! Sell, sell, sell
Posted via Mobile Device

JimLewis
03-15-2012, 05:10 AM
I'd like to hear the opinion of some who have bigger companies with a sales staff address this issue with comments about commissions, duties of the sales staff, growth rate, etc.

Any takers?

Sure. I'll bite.

First of all, there's already been some excellent advice about not hiring friends. I'll just clue you in to what everyone else here already knows and the O.P. apparently does not - Don't hire friends! That always ends badly!

Second, paying strictly commission is usually a bad deal for everyone. It sounds exciting at first. But one of two things are likely to happen. One: it won't be as easy to land accounts as this guy thinks it is and the bonus money won't add up to as much as he was dreaming of. Then he loses interest quickly once he realizes this and finds another job that pays better, more reliable income. Or Two: he starts landing jobs but he's underbid them because he really had no clue what he's doing in this industry and he's just more excited about landing a job and getting that bonus than he is making sure that he has bid the job correctly. So now you're paying big bonuses for jobs you're losing your a$$ on, and you don't even realize it for 6 months.

My third thought is nobody builds a business this way. You don't hire full time sales people at the Solo Op. stage. You hire people and teach them to do what you do (mow, handle the route, etc.) and then once they're trained YOU step up and start doing the selling. Doing it the way you describe is like putting the cart before the horse. It doesn't work like that.

Fourth, I totally disagree with the premise - that a lawn care / landscaping company should have dedicated sales people. I think the best sales people do way more than just sales. They are project managers who have worked their way up so that they understand production times at your company so well and they are good enough to both manage crews and land jobs for the crews to be doing. In other words, they're going on sales calls, landing jobs, scheduling the jobs, overseeing the crew that does the job, making sure the job gets finished correctly, and then collecting the payment for the job. But knowing production times is the real key here. Dedicated sales-only people don't know production times. They've never worked in the field. They're just guessing. You need the sales person to have experience! And you need someone who is involved with the customer throughout the whole process. Someone the customer can build a relationship with. Customers don't like it when the guy who sold them the job disappears after the sale. That pisses people off. Half the time, they hired you because of YOU. They liked YOU and wanted to work with YOU. Not just be passed off to someone else at the company because "you only do sales."

There are 4 of us at my company in charge of sales. But all of us are also project managers too. 2 of us on the landscape design/build side and 2 over on the maintenance side. We're in touch with the customer as long as they are customers of ours. We're doing way more than just sales. People like that. Relationships is a key part of any business.

I met with a good friend of mine recently who runs a local company that does $50Mil. in annual sales. Very successful company. They have a whole slew of sales guys. And that's all they do is sales. I met with him recently because we get together to compare notes a few times a year. I asked him recently, "So your sales guys never work with the customer after the sale is made? Doesn't that piss people off???" His answer surprised me. Just because he was so honest. He said, "Yes, as a matter of fact. It does. And we're changing that. It's been done that way for years." (my friend just joined the company 2 years ago and is 2nd in charge of the whole company now, so he's been facilitating a lot of change lately). He went on to say, "We're in the process of changing our business model to be more like the way you do it. Where the guys that are selling the jobs will be the same guys overseeing the project from start to finish. People like that better." I agree. That's how we've always done it. But it's good to see that even REALLY large companies are starting to learn that too.

Another premise that I disagree with is that hiring a salesman is the way to drum up more business. I guess it could drum up some business that way - just by cold calling businesses and such. But it's kind of backwards. The real way to drum up business is to do more marketing / branding / advertising. Drive business your way rather than chasing business down. All throughout my business, I've always focused all my spare time on marketing / advertising / branding. Whenever I wasn't busy, this is what I'd focus all my attention on. If I was broke and couldn't really afford much, I found ways to market that didn't cost very much money. But I was always focusing on doing something to get our name out there more - not cold calling or dropping in and bugging people who may or may not be wanting my services.

One final tidbit for you: I only ever hired additional salesman / project managers only when I was to the point where there were so many calls coming in that I couldn't handle them all myself. THAT'S when you should be hiring someone to help in sales. Not now.

chrisvinky
03-15-2012, 09:55 AM
Not to be an ass, but if you are a one man show, you need to relook at your business model if you do not have time to sell. This is prime time selling right now and not a lot of production time. Starting Monday we will have 3 people knocking on doors and blowing people's phones up! Sell, sell, sell
Posted via Mobile Device

It normally would be time for selling right now but with the warmer temps, it has thrown a curve ball to us! we are beginning to mow this week. I've never been good at selling. I sent 1000 postcards to a targeted route about 3 weeks ago and had one call. We have a county of 30,000 where we live and I can think just off the top of my head of about 10 different outfits that mow. Some are larger, some one man shows. Competition is tough! It seems most people who have their yard mowed have somebody and are reluctant to change unless they are just unhappy with the service. I have a couple of apartment complexes and done some commercial work last year but lost the commercial work this year. There's not much industry here or commercial work except for some banks, restaurants, etc. Really no industrial type work. I'm sending in a bid on two banks next week and a cemetery.
My friend is a preacher and knows a lot of people so I thought he could get me some residential jobs but he wants to concentrate on going after big acreage and industrial complexes 30 miles away. Not sure what to do.

chrisvinky
03-15-2012, 12:07 PM
Jim Lewis, I sent you a message. Thanks for the candid advice.

billpiper
03-15-2012, 01:49 PM
I completely agree with JIm. Most of my selling was in commercial printing in my earlier years. Yes we sold printing - at least that was the end product. But what we really sold were solutions to problems, using our knowledge of the process and materials to create a successful product for our customers. We sold service. i spec'd the job, sometimes quoted the job, sold the job, then pushed it through the plant and followed up to make sure the customer was happy with our work. I had a plant manager tell me once that I was suicidal about servicing my customers. I did not consider that to be an insult.

New and smaller operations in any industry alays have a hard time affording marketing and branding, but Jim's right, cold calling is a waste of time. A cheaper way of marketing is networking - ask friends and family for their business and referrals. bet if you make a list, you know 200 people who are potential customers, and that you have not contacted most of them. Why don't you ask your friend for referrals? You could even pay him a referal fee when you get a new contract.

When you sent out that 1000 post cards, did you follow up by phone or in person? You said you weren't good at sales, but to me, being good at sales is being honest and open. I never really had a "sales pitch". I told them who I was, who I worked for, showed a couple of samples to prove we really could print, then asked them about their business and let them talk.

It seems to me that doing business is sort of an up or out type of thing. If you aren't growing, you're losing ground. marketing and sales gets you up.
Last comment. Most people would rather buy from the "boss" than a salesman or employee.

Good luck