Salesman sold himself to me!

[inferno13xx]

Hey guys new to the site. Been running my company now for 8 years and recently (2010) decided to hire a salesman without doing much research now regretting it i think, granted my sales went up from $200,000 to $1.3 which is great but im not seeing the return i thought i would and a huge part of it is what i pay my salesman i think. so i want honest opinions here i pay my salesman $44,800 plus 10% of what he sells, and a company truck? id like to get this back under control.......

[wbw]

What are his annual $ sales?

[MudslinginFX4]

I'd pay him a percentage of profits, not a percentage of sells. the problem with your system is he can sell anything cheap... and doesn't care if you make anything or not. If the company isn't making money, he shouldnt either.

[fl-landscapes]

Originally Posted by MudslinginFX4

I'd pay him a percentage of profits, not a percentage of sells. the problem with your system is he can sell anything cheap... and doesn't care if you make anything or not. If the company isn't making money, he shouldnt either.

As long as the owner not the salesman does the estimate his commission should be built in. Goes both ways, not the salesmans fault a laborer drops a tree on a fence and blows the profit on a job he worked hard landing. Never let salesman do their own estimates! And yes I think his pay is high. 10 percent plus business expenses after an initial salary to help him get going. Even if he sold a million your package, salary, plus commission, plus truck and fuel etc. Puts him close to 185000. Too much!
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[topsites]

True, but just think how good it will look on paper!

[SoCalLandscapeMgmt]

Originally Posted by inferno13xx

Hey guys new to the site. Been running my company now for 8 years and recently (2010) decided to hire a salesman without doing much research now regretting it i think, granted my sales went up from $200,000 to $1.3 which is great but im not seeing the return i thought i would and a huge part of it is what i pay my salesman i think. so i want honest opinions here i pay my salesman $44,800 plus 10% of what he sells, and a company truck? id like to get this back under control.......

Sounds like you are learning the same lesson that I learned in 2008/2009. Sales went way up, lost a ton of money. The sales guy I hired was only motivated by his commission. He wouldn't go after the types of jobs that I wanted. The stuff he did sell wasn't a good fit for our company and we ended up terminating the contracts. within a year or two. Our average client has been with us at least 7 years or more. Some for 30+ years! I think he was also promising things that were outside of the scope of the work that we were bidding just to make the sales. I had a couple of clients insist that he told them we'd include something in the contract even though it wasn't in the written specs. In hindsight I was paying him way to much and his commissions were way to high. Instead of doing 10% try a 3-2-1 deal. 3% the first year, 2% the second year and 1% each remaining year that he is with you and that you have whatever job he sold. I had a the same structure but I let him talk me into high percentages when I hired him. Some companies out here do commission only. I'm finding that a good marketing campaign is much more effective than a salesperson. We have a much higher closing rate and it costs a hell of a lot less money.

I'd go to the guy and be honest with him. Tell him you can't afford him and see if you can re-negotiate his compensation package. If he's smart he'll see where you're coming from and work with you. If not well then there are plenty of other guys who I'm sure would love the job. Also, I hope you made him sign a non-disclosure agreement so if you part ways he can't skip off to the next landscape co down the road and approach your clients on their behalf!

[Prolawnservice]

I saw your in MD is his name redfern?

[DiscoDave]

I am a salesman for a landscape and irrigation company. I agree with Mudslingin.... I would pay your salesman a base pay plus a percentage of the net profit not a commission on the gross sale.

Anyone can sell if there is no motivation for it to be profitable.

[inferno13xx]

he sells 700,000 a year so far all my leads.

[inferno13xx]

No but i think i have heard of him.