Please ADVISE??? Does anyone know what is good for both parties??

Discussion in 'Business Operations' started by evergreenlandscapes, Jul 3, 2006.

  1. evergreenlandscapes

    evergreenlandscapes LawnSite Member
    Posts: 12

    We have been in business 15 Yrs and have done very well. I was recently approached with a situation that I need help or some input from someone that may know the industry standards.... I have an opportunity to work with someone that has experience from a larger company in landscape sales. This person was getting screwed out of commission and is looking for a change in scenery, not to mention that the company she worked for has priced themselves out of the market. We would like to use her as an independent salesperson. If she generated and hustled her own leads, and had us do the full installation on a project,yet she sold the job and generated the work, what type of percentage should she recieve? Would she basically just sub us out? We give her a price and she tacks on whatever she wants?.. What about leads that we recieve on our own. ? If we gave her a lead, and she sells the job, should she make a percentage of the net? Gross? She would not be on payroll. Strictly working on a commission basis. What if she picks up a new lawn account, snowplow account ,pesticide program. ANY HELP WOULD BE GREATLY APPRECIATED. I want this to work out for both of us. She was successful at her previous employer selling around $400,000 worth of work last season.
     
  2. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    If she's that good, she should have no problem getting hired with someone who already has the answers to all these questions.

    As for me, I suspect she's the one who's way out there, thinks she deserves more and what not, maybe she should run her own business before coming around demanding all sorts of things.

    400,000.... MONEY FLAUNTER !!!! Red flag, red flag!!!
    Trust me, you get took for a large amount a few times, soon the big money doesn't excite you the way it does now, soon it no longer clouds your judgement, tell this one to hit the road, jack.

    But, if she insists... I spend 10% of my annual gross on advertising... You think you can do this? You got it: 10% and that's after the check clears and you sell via my prices (as there evidently exists an issue here, is she low-balling to get the figs, who knows...)
    Oh yes, my annual gross is just over 30k, your pay rate would be $3k / year. Of course, if you can double my gross to 60k AT MY PRICES, then by all means, knock yourself out.

    That having been said, if your gross is 200k and you can discontinue ALL paid advertising and this cash cow can either maintain the 200k or even increase it, then by all means, 10% of the gross, if the gross is $400,000 / year (not billing but CLEARED checks), then she gets 10% but only after you are no longer using your paid advertising budget, otherwise what is the use.
     
  3. evergreenlandscapes

    evergreenlandscapes LawnSite Member
    Posts: 12

    She is not demanding anything.......This is a win win situation for both of us....No payroll,payroll taxes,workers comp,insurance, Etc.... She hustles to make sales and we pay her a percentage. She approached my company because we have a good reputation, do good work, and our phone rings. Iwas just trying to get an idea what companies pay theyre salespeople. This is a middle aged woman who is confident in her abilities to sell work. The only difference is that she would not be on our payroll. We cannot lose on our end. Risk free..Any advice on percentages of her payon work generated vs. leads we give her would be greatly appreciated. We dont advertise at all, so that does not even factor in here. Website is used for photo-gallery only, to show potential customers some of our work.
     
  4. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Posts: 4,909

    Thats a question you should ask your accountant. No one on lawnsite can tell you that answer.

    Its generally done as a percentage of the profit on the job..You have to know your profit margin.

    Im in the same situation as you, I would like a commission salesperson, and Im working out how to compensate them.
     
  5. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    If she is truly independent of you she should set her own rates.

    I don't know what size jobs you deal with but I would think a graduating scale from maybe 10-12% on inexpensive jobs to say less than 20-K and a lower % say 4-6% on more expensive jobs say over 100-K. Something in between for everything else.

    I am guessing there is some design work involved too that has value regardless of the sale. She could charge the client for that if she is good.

    What ever you do set up a system and stick with it, if its not working change the system together.

    You have managed to stay in business for 15 years you probably know a thing or two about systems.
     

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