Hiring a salesman??

Discussion in 'Business Operations' started by chrisvinky, Mar 13, 2012.

  1. chrisvinky

    chrisvinky LawnSite Senior Member
    Messages: 355

    I have been entertaining the idea of hiring a salesman to work on straight commission. I have a friend of mine that is an excellent salesman that I have approached about this and he is all for it. My question is, has anybody else done this and what percentage did you pay? What else do I need to think of or know? I am a one man operation now but am eager to grow. I have been stagnant where I am for about two years now. He said he would probably go after bigger accounts like apartment complexes, factories, etc... that he could make more on.

    Any help would be appreciated!!
  2. Wright48

    Wright48 LawnSite Senior Member
    Messages: 291

    First of all if hes a friend i wouldnt hire him friends and family are the best when it works our and there nothing worse when it doesnt work out. I would only give him commision in full on jobs that are one time things ilke pavers or plantings for lawn contracts i would break his commision down monthly so that way you dont pay him commision on an account that has left you. Also you have to be careful to make sure he knows how do bid jobs and the work that is involeded its not just selling the jobs its knowing the field. You can bid a 6000 dollar patio at 5000 your loosing money. Also after he is you salesman you have to make him sign a non compete clause because if he leaves hell steal all your customers.
  3. TuffWork

    TuffWork LawnSite Senior Member
    Messages: 506

    Give him a one time commision on everything. One price for one time gigs, and another for contracts. Only pay once. No "hiring" or "firing" about it. You tell him when to get you jobs and when to stop.
  4. FinerCutslawnCare

    FinerCutslawnCare LawnSite Bronze Member
    Messages: 1,386

    I don't like hiring friends. Have done it numerous times in the past and they always say "I will work my butt off for you" but something always goes wrong. I have only had one friend that has kept to his word. But with that being said having a salesman would be a good idea.
  5. HPSInc

    HPSInc LawnSite Senior Member
    Messages: 763

    they sure can make you a ton of money. you know your friend better than any of us so ultimately its up to you to decide. if he gets you work and something your both happy with as far as commision goes i cant see too big of an issue. the stealing customers if he leaves can and does happen. it can cripple a landscape company if a long time salesman leaves to another company. most of the people go with the salesman, not the company. ive seen it happen. and ive seen lawsuits come from it too when the company sues the salesman who left and stole all the customers.

    also to comment on finercuts, i have had friends kick @ss with me and had some totally crap out, complain, slack, and then want more money. its funny how that works with friends
  6. Lbilawncare

    Lbilawncare LawnSite Bronze Member
    Messages: 1,119

    I recommend that you do not pay anyone on commission alone. I have seen sales guys lowball deals just to get the account and the commission. The company can't keep up with the demands of all the new business without going in debt to buy new equipment,etc. The only way for them to actually make money is to cut corners, eventually harming their image. Most companies pay a base salary plus 2%-3% of actual sales.
  7. jdutcher003

    jdutcher003 LawnSite Member
    Messages: 181

    It doesnt mean the sales guy has to bid it for you. he can get you the bid and then you bid it at the proper price. you can give him a small amount maybe for even getting you a bid and then if you sign the deal he will get more. I dont know if this will work never needed a salesman i am just a solo guy for now
  8. billpiper

    billpiper LawnSite Member
    Messages: 82

    If you're a solo operator looking to grow, and you hire a saleesman and heis able to bring in a substantial amount of work, do you have enough equipment to put togther a second crew? have you run the numbers to figure out what it will take moneywise to add another crew to take care of the new business? Is your friend going to sell for you full time or in his spare time? If full time, can yoiu afford to pay him enough for him to make a living. Do you have enough profit in your jobs to pay him commission and still make enough to keep the company open?
    For example, and all this is just pulled out of the air; You have 100 customers you cut weekly at an average of $50 per cut, or $200 a month at a 25% gross profit margin ($50 a month) If you pay your friend a 10% commission on what he brings in ($20), Your gross drops to $30 a month off that customer. If your friend needs to make $500 a week, he needs to bring you 25 customers (on contract, or at least repeat business) before he can make that, assuming you're going to pay him 10% as long as you have that customer. Are you going to pay him that way or are you going to pay him a one-time commission for that customer, and do you have the cash to fund that commission plan?
    Assuming your fairly full now, that extra 25 customers may push you to a second crew - and 2d set of equipment, trailer, mower, etc. There's $5K to $10K out for equipment. Got cash for that or are you going to have to borrow it?
    If your friend is your full time salesman, and he's any good, he could sell you out of business. It happens. If you tell him to stop because you have all you can handle, he's gone because he needs to make a living. If he's part time, working 2 jobs, that usually means neither job gets done well. We haven't even touched on marketing materials, mailings, etc.
    In your shoes, I think I might add a helper to speed up production to allow time for me to do the selling. As I grew, that helper could become the leader for my second crew. Tha way you can grow at a comfortable rate.

    Somebody on this thread said selling was easy. Bull.
  9. billpiper

    billpiper LawnSite Member
    Messages: 82

    I'd like to hear the opinion of some who have bigger companies with a sales staff address this issue with comments about commissions, duties of the sales staff, growth rate, etc.

    Any takers?
  10. Superior L & L

    Superior L & L LawnSite Senior Member
    Messages: 567

    Not to be an ass, but if you are a one man show, you need to relook at your business model if you do not have time to sell. This is prime time selling right now and not a lot of production time. Starting Monday we will have 3 people knocking on doors and blowing people's phones up! Sell, sell, sell
    Posted via Mobile Device

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