you're not going to give him a raise for a year? after what, laying him off over the winter?
Can you live off 12/hr for part of the year?
Why should he?
12/hr is a middle supervisor at target or walmart or mcdonalds.
Year round jobs, 35ish hours a week, with benefits like PTO, minor medical, 401k etc.
They don't destroy their own clothes.
they don't need work boots in excess of $150 sometimes twice per year.
They don't have to drive very far to get to these places to be employed.
they don't have to lose hours due to rain.
the list of why those jobs are better than what you are offering goes on…
The question isn't what are other guys paying lawn monkey's/landscapers.
The question is why does no one worthwhile want to DO these jobs.
Everything mentioned above and only $10-$12/hr.
Anyone worth while is going to grab that job just long enough until they can climb the ladder. Get something better, then poof gone.
10% sales commission?
On your best day your Net is around 20%… but most companies are 10% or lower net on average…so you want to give any profit away and a bonus or incentive to bring it what? Zero profit?
Typical sales commission is 2.5 to 5%.
So for example.
In may I sold a 71,000 maintenance contract. It's a 3 year contract with option to re-up twice each for one year.
So technically, thats a 350,000$ plus sale.
or $8750 to $17500 worth of sales commission.
Buuuut. how do you pay out that commission?
you can't pay it all at once. you would owe all that money before you made any.
you can't pay it at the end, 5 years later? the salesman might not even be with the company anymore.
best way to pay the commission is through installments as payments come in.
This is called……
Profit sharing is based on many things, not simply sales.
Production, efficiency, limitation of waste, referring other employees that are worth while.
You supply profit sharing for your main people, people you 'invite into the fold', not just mere employees.
so back to some concepts of numbers.
lets say you do 300k of business.
Your net is 30k
That might equate to a $2500 profit share (i.e. bonus) to a key employee.
Now over the course of a season, where he's probably worked 1200 hours, that's an extra 2 bucks an hour.
compare that to a sales commission of 2.5% of a $40 lawn sale.
Lets say in that case he brought in 20 additional lawns he "sold"
that's 800 bucks a week times 30 weeks or $24,000 in revenue.
That's $600 bonus (sales commission at 2.5%) or $1200 bonus (at 5%) or the way you were doing it $2400 (10%).
The problem with a sales commission is all it does it ensure sales are happening, not profit being made.
With profit sharing if you aren't making money, at least you aren't handing out extra money to not make money.