What to pay sales guy

[big acres]

Originally Posted by tatmkr

I did sales for severla yers and I know what my compensation package was and I have recieved literally dozens of offers from other companies, so here is my take on this:
-First my compensation for 3 companies was $35-38,000 per year plus 3% of the sales price. I also did several other jobs including building fireplaces, grills, h20 and such, marketing, snow removal, equipment repairs, and ran my own jobsites.
-We had a sales guy that worked on a lower base and a higher commission and he did lowball jobs and gave us problems (which when that happens your usually in pretty deep before you even see the initial damage). To correct this issue the owners set the pricing startegy (overhead, hourly rate, fuel, ect.) They also reviewed every price before it went out the door. This doesn't take more than 20 minutes or so and sets your mind at ease.
-As part of my salary, which I am sure some of you are flabbergasted at, I was held accountable if a job was unprofitable. This is a based on the reason the job failed. If I underestimated the site conditions or materials then I lose out on the commission. If the crew was just unefficient then I stilll get what I deserve.
-Speakly with absolute conviction, if your sales guy also has to manage his jobsites you will NEVER obtain their full sales potential.

I can keep going on and on, but here is my suggestion:

-$20,000 base salary (just a hair shy of $10 per hour)
-3-4% commission on construction sales
-2-3% commission on maintenance, snow removal, commercial (lower margians)
-Commission payed monthly on completed and paid in full production
-Commission prorated or forfieted for jobs under x% profit if fault is found in the sale itself
- Set sales goal for the year (don't use yourself as a base, owners will always be able to sell more than a salesperson, because people like to deal with an owner)
- All quotes will be reviewed before leaving the office (if fild estimates are needed then set pricing guidlines shall be in place)

"-Speakly with absolute conviction, if your sales guy also has to manage his jobsites you will NEVER obtain their full sales potential."

I agree with most of your post -especially this sentence. Thoroughbreds are meant to run, not walk. Your sales guy should be out opening new doors, not managing. If production needs it, do as we do and create a project manager position for this. Our PM meets with sales staff, and then oversees multiple jobs simultaneously, and communicates with foreman constantly. The sales guy should check his job occasionally, and at the end. Unless it's residential landscape which requires alot of hand-holding.

[tatmkr]

Yeah, if your doing a residential landscape with lots of small items then it makes perfect sense for the sales guy to spend some extra time. for most jobs the sales guy should meet the crew over there at the start and mark out the job and to go through the design. Then he shoud check in every day or to to catch and problems, then he should do a final walk through with the homeowner, at which time he collects the final payment.

I'll put it this way: When I was used in as a production manager and sales person I sold about $350k per year, the following year in strcitly sales I sold just shy of $500k. It's two differernt hats for someone to wear and a sales person has not had the years of experience that an owner does at wearing those hats. (Although you may find one in 2009 )

[TXNSLighting]

This is some fantastic information. Keep it comin. My company is pretty much a lighting only company, but we also can do landscape, and we are about to get into water features. Im wanting to hire a pure sales guy for lighting cuz i really just suck at selling. Im great at the customer relation, and quality of the job install. So yeh. Keep it all comin.