Register free!
Search
 
     

The Green Industry's Resource Center


Click for Weather
Reply
 
Thread Tools Display Modes
  #1  
Old 09-05-2012, 10:56 PM
fla1st fla1st is offline
LawnSite Member
 
Join Date: Mar 2012
Location: gainesville, fl
Posts: 2
Employee compensation for new accounts

We have an employee, our manager, who is capable of bringing lots of new business to the company. He has lots of contacts in the local community and is the type of person that people love to work with. Bottom line is he knows his stuff, has endless contacts, and the charm that could bring lots of new business to the company. How should he be compensated for new accounts he brings on board though? A one time payment or say an indefinite 5% of account gross revenue, 10%, 25%??? Cant find any guidelines for this, any and all help is greatly appreciated.
Reply With Quote
  #2  
Old 09-06-2012, 12:05 AM
zak406 zak406 is offline
LawnSite Bronze Member
 
Join Date: Jun 2006
Location: irwin pa
Posts: 1,511
I dont have an exact percentage but I will say this, treat him right. it sounds like he will make you alot of money in the long run. I would give hiim a percentage (unsure as to exact percentage) and treat him and his family to alot of steak dinners.
Reply With Quote
  #3  
Old 09-06-2012, 05:24 AM
crosel crosel is offline
LawnSite Member
 
Join Date: Apr 2012
Posts: 13
For compensation maybe offer a choice of a one time payment or a 5-10% commission for as long as he works with you and the account is being serviced. Comission is safer, one time payment may be cheaper. If I had a trustworthy employee I would choose comission because it is more attractive and since it is 'for life' may encourage him to get more accounts to increase his pay (and yours). Though I would prefer it to be me the one getting new accounts.

This is just my opinion coming from a solo point of view. In a larger scale business this wouldn't be much of a problem, but in small scale business I would be wary of having an employee be a significant source of potential accounts in a specific area if they know him personally. Should he get in a fight with you/you fire him you may have to kiss goodbye to those accounts.
Reply With Quote
  #4  
Old 09-06-2012, 05:40 AM
123hotdog's Avatar
123hotdog 123hotdog is offline
LawnSite Senior Member
 
Join Date: Aug 2012
Location: Bristol TN
Posts: 459
This is just my opinion coming from a solo point of view. In a larger scale business this wouldn't be much of a problem, but in small scale business I would be wary of having an employee be a significant source of potential accounts in a specific area if they know him personally. Should he get in a fight with you/you fire him you may have to kiss goodbye to those accounts.[/QUOTE]
I totally agree with this. I am a small operator with only two part time employees. I have one that can be sent out alone on the jobs and does well. Last year he got a turkey for Christmas this year he's getting a 1999 Ford Ranger. One thing I've learned in any industry, let your good ones know you value their service and the odd bonuses and things you give them is what sticks in their mind. Money alone won't do it. We all just spend what we make, even the owners. Think about it.
__________________
Licensed and Insured
Operating since 2007
1993 Isuzu NPR dove tail open bed 4cyl diesel
1978 F-350 Dump Truck
1988 Z-71 Chevy 4x4 Meyers Plow
2005 Chevy HD 2500 6.0
1989 Toyota One ton Flatbed
2013 61" Bad Boy Outlaw XP 36 Vanguard
2013 54" Bad Boy Outlaw Stander Kawasaki
2014 48" Wright Walk Behind
Reply With Quote
  #5  
Old 09-06-2012, 05:50 AM
Duekster Duekster is offline
LawnSite Fanatic
 
Join Date: Jan 2007
Location: DFW, TX
Posts: 7,971
Job cost and give him 5% of net.
Reply With Quote
  #6  
Old 09-06-2012, 07:27 AM
sehitchman sehitchman is online now
LawnSite Senior Member
 
Join Date: Apr 2009
Location: West, GA
Posts: 565
4% the 1st 12 months, 2% after that for the life of the account and his employment. Think about it, 4% is very close to the same ammount as a free cut in a 20 cut season when you factor in your share of FICA etc. You could adjust this percentage to match the cuts per season if offering a free referral cut. Most of us would gladly offer a current account a free cut for a quality referral. Also, spell out a comission reduction if the service contract is negotiated at less than the standard rate to meet or beat a competitor's quote. You cannot pay comission if the margin on the job is to low, also gives him incentive to keep prices up.
__________________
My wife said "you're on lawn toy restriction"
Reply With Quote
  #7  
Old 09-06-2012, 07:46 AM
Duekster Duekster is offline
LawnSite Fanatic
 
Join Date: Jan 2007
Location: DFW, TX
Posts: 7,971
I have no clue how commercial account reps are paid in this industry. I am sure you have to set out some standards on estimating and such. That is why a percentage of gross is scary to me. Any wing nut can sell products and services at a loss to the company.

Net is much safer but they may object to how the account is managed. If you are paying salary plus commission then that is one rate, straight commission is another. You also need a non-compete/ no raid provision.
Reply With Quote
  #8  
Old 09-06-2012, 10:57 AM
bohiaa's Avatar
bohiaa bohiaa is offline
LawnSite Fanatic
 
Join Date: Jun 2005
Location: Bellville Texas, near Houston
Posts: 5,017
We give the 1st visit to the employee.

I had a guy that brought in a large appartment contract, it was 1200.00 Per visit.

he got the 2st 1200.00

GREAT insentive
Reply With Quote
  #9  
Old 09-06-2012, 03:40 PM
123hotdog's Avatar
123hotdog 123hotdog is offline
LawnSite Senior Member
 
Join Date: Aug 2012
Location: Bristol TN
Posts: 459
Quote:
Originally Posted by Duekster View Post
I have no clue how commercial account reps are paid in this industry. I am sure you have to set out some standards on estimating and such. That is why a percentage of gross is scary to me. Any wing nut can sell products and services at a loss to the company.

Net is much safer but they may object to how the account is managed. If you are paying salary plus commission then that is one rate, straight commission is another. You also need a non-compete/ no raid provision.
I couldn't agree more with the non-compete/ no raid provision.
__________________
Licensed and Insured
Operating since 2007
1993 Isuzu NPR dove tail open bed 4cyl diesel
1978 F-350 Dump Truck
1988 Z-71 Chevy 4x4 Meyers Plow
2005 Chevy HD 2500 6.0
1989 Toyota One ton Flatbed
2013 61" Bad Boy Outlaw XP 36 Vanguard
2013 54" Bad Boy Outlaw Stander Kawasaki
2014 48" Wright Walk Behind
Reply With Quote
  #10  
Old 09-06-2012, 04:45 PM
Duekster Duekster is offline
LawnSite Fanatic
 
Join Date: Jan 2007
Location: DFW, TX
Posts: 7,971
Quote:
Originally Posted by bohiaa View Post
We give the 1st visit to the employee.

I had a guy that brought in a large appartment contract, it was 1200.00 Per visit.

he got the 2st 1200.00

GREAT insentive
It is but on Commercial accounts, someone still has to routinely visit the client. You do not want the sales rep off always chasing new accounts. That would be a good bonus for sure but not a great way to keep them interested. Unless you plan on having account reps too.
Reply With Quote
Reply

Tags
compensation , employee , new accounts , referal

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 12:11 AM.

Page generated in 0.08561 seconds with 9 queries