Looking to hire maintenance account rep. NEED HELP!

Discussion in 'Business Operations' started by MowMoney, Dec 11, 2001.

  1. MowMoney

    MowMoney LawnSite Member
    Messages: 55

    Hi guy's,

    Well, we just wrapped up another season and I was thinking that I may be in a position to hire a sales person (account rep) for the maintenance division for the coming year. I would like to get an early start on the planning and hiring of this key personel but, I have some questions I'm hoping you guys can help with.

    1) What are some of the job responsibilities this position should carry? And what are some of the expectations I should have?
    2) What kind of pay structure should i set up - commision, salery or a combination of both?
    3) What are some of the elements involved in seting up a standardized estimating format so that the customer gets charged a accurate price (and I dont loose my shirt)? Currently I can walk thru a property and I will be able to calculate (in my head) just how much to charge for each particular service.
    4) Are there any legal documents that should be signed between me and the sales rep such as a no compete clause

    I'm sure that there are many other questions I should be asking so any help would be greatly appreciated.
  2. 1) Hard to tell with not knowing what you offer.

    2) A combo of both will be better to keep he/she on the up side of the profit margin.

    3) Training and setting your prices up on paper for he/she to be able to calculate also, and referr back to. Put you minimums on it also. He/she will be the one you will want to train the thoughest. They will be in a sences your clone. You should instatute some kind of system to check an ok their figures to make sure they are in scale. You will have to build some kind of bond and huge trust with them. This person will be controling your money.

    4) Yes, you should have a lawyer draw them up for you.

    I have been tossing this around for a few years, but the best suited person for this in my LCO, is the mrs. that I have been building/teaching/educating for this position.

    My questions

    1) Why do you need this person?

    2) Are you willing to pay those wages? This is an extra expence, it has to be justified in order to use it.

    3) Are you large enough for a sales rep?

    4) Can you justify giving a percentage of every job they sign for the first year

    5) This person gets paid for the entire contract before you ever get all the monies from it.

    6) Can you pay out $60k-$70k for a sales rep.

    Quick story.

    The morgage broker I used son is a sales rep for a landscaping/nusery. He has been making from $80k to $120k in commisions a year. At using the standard 2% commision rate he has to be selling $5 million in sales to make $100k

    OK quick what if.

    They would have to generate $2,500,000 in sales to make $50k at 2%
  3. MowMoney

    MowMoney LawnSite Member
    Messages: 55


    WOW, the questions you asked are really great, particularly becouse the force me to think about certain issues that are important to address. The answer to your first question is 2 part.
    I have notice that over the years something (usually personal issues) always seem to come up which takes away from my focus on the business. This year was the most noticeable. Customer calls were not returned timely, complaints were poorly addressed, and sales were flat becouse very little effert was taken to go after new customers. This naturally effected the bottom line (no mystery there). So it has become clear to me that a key person to take on this responsibility is important and a system needs to be in place if, for what ever reason, I need to be and absentee owner, sort of speaking. The second part of the answer is that not everything can be done by one person. If I am out there accually working then I can't do the things that are necessary to make the company run and grow. I feel that it would be more beneficial to work ON the company instead of for it.

    2) & 6) I was thinking that the cost of an account rep would be closer to $50,000 on the high end. If that was the case them the numgers should work. 2% may be a little low, my accounts are 99% residential. the margin are good, even if I pay 7% (straight commision) it would make sense for the right individual. again $50,000 being on the highend including all associated labor costs.
    4) my answer to this was yes, until I read question #5. It didnt occure to me that the entire commision was paid in one lump some at the signing of contract. I was thinking that it would be dispersed monthly tied directly to invoicing. I guess I need to give that more thought.

    3) The company is divided into 3 divisions: Maintenance, Contstruction-Installation/Paving, and Snow Control. We do well with both construction and snow. I would really like to focus more of my efferts on the construcion side of the business. As far as the maintenance division goes there are only 2 crews and they are not to capacity, not becouse there isn't demand but Largly becouse of what i mentioned above. I have the resoursce to attract the clients, for the trucks & equiptment and for the labor to do the work. I figure I would have to run 5 maint. crews to make it worth while and it would take upto 2 season to get there.

    Here is a question for you, what is a respectible profit margin for residential maint work? how much $$ on average does a crew generate per month. Some kind of bench mark is what I'm looking for. In Chicago we work about 7.5 to 8 months. I am averaging between $15,000 and $18,000 gross per month per maint crew. I think, if run correctly I can generate closer to $20,000.

    By the way Godfather I appreciate the time you took to respond.

  4. MowMoney

    MowMoney LawnSite Member
    Messages: 55

    Also, in giving it more thought, the sales rep could also be responsible for contracting Snow accounts (which are 99% commercial in contrast to maint accounts) and this could easily bring his salery more in line with what you were talking about.
  5. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    1) What are some of the job responsibilities this position should carry? And what are some of the expectations I should have?
    2) What kind of pay structure should i set up - commision, salery or a combination of both?
    3) What are some of the elements involved in seting up a standardized estimating format so that the customer gets charged a accurate price (and I dont loose my shirt)? Currently I can walk thru a property and I will be able to calculate (in my head) just how much to charge for each particular service.
    4) Are there any legal documents that should be signed between me and the sales rep such as a no compete clause

    This isn't going to sound real nice. Based on the questions & statements here you don't have handle on what to do yourself and no systems in place for duplicating your effort. Get your act together first and then establish systems that can multiply your effort through others. Then success and growth will come.
  6. Harold;

    His system will have to be based, built, and designed for this person.

    With the little time you have that you stated you probably wont have enough time to properly train, build, and educate this person for this job.

    This is going to be a must and almost full time job for a while added to the biz.

    Are you prepared for this? Can you focus alot of your time on this plus your biz? You will be that persons shadow for a while.

    With that person doing office work also, what typr of hours would he/she be looking at,

    For my question #5, I would like to figure out how to get that to work also. When a sales person completes a sale they usually get paid for the entire sale. That's why I asked.

    I am going to have to say that the $50,000 would have to be on the low ed, in order to keep that person making you money. Remember that they will be running your pocket book.

    So at 7%your looking at $720,000 in gross sales. for them to make $50k.
  7. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Messages: 1,712

    I beg to differ on making the system to suit the person. There is a business objective here to accomplish which is to garner more work.

    I think 700K is not a doable number but hey, I'll listen to to logic. My thought is that you'll have to bid millions to sell 700k and hopefully not sell your soul to the devil to do it. How many millions of small stuff can a person bid. And if your not talking full maintenance pkg of mowing, fert, mulching, pruning, flowers etc it's a tall order. It would have to be done in a few months as well.

    Next, I don't think the person understands how to do this himself, so if you don't understand what you are doing and don't have systems and processes or models in place for others to work from and carry on how able is one to hire someone to do the job. You don't even know what to look for.

    Lots of business owners and execs hire people everyday to do things they don't know themselves. It's a given you must surround yourself with talented, knowledgable people if you are to succeed. So what is the likely hood one can find a division builder/manager that can estimate, sell, understands finances and business operations so he can use the proper $$$ numbers in selling as well as having hort, and production time knowledge.

    Usually these things start as a hands on, built up from the ground floor type of operation with sound and dependlable systems and practices. Then when you go to the next level you bring a guy in with some basic abilities and an upside to take over some of your old responsibilities and keep repeating the process up the ladder.

    The other way is through deep pocket by outs and mergers where you aquire exisiting things to add to what you do already or add things you'd like to have. With this idea you are alredy stocked with the appropriate manpower to keep moving forward.
  8. Im not a pro at this, but I'm giving him perspectives for both sides.

    And a little of the research I have done on it.

    I am more than happy for some one to help us and correct any thing that is incorrect

    The 700k was figuring back from 7% of $50k, and that would be what most full commissioned sales people would want.

    Yes that's alot of work to get that much revenue. But then again, that would be what he is getting paid for for the enitre year.

    Yes you are correct about building this person from the ground up, I stated that already
  9. MowMoney

    MowMoney LawnSite Member
    Messages: 55

    Godfather & Herald,

    Very interesting commentary from the both of you. Its interesting to see the verious points of view. Harold, I think I may of misslead you a little earlier. The reason I would like to hire a rep is to 1) to close sales and make sure the customers needs are adressed particularly when I am not available to do so. And 2) to free me up and allow me to work ON the company as a whole. Do I have a handle on what to do? I feel I do when it comes down to doing it myself. However, the business has grown to roughly $1,000,000 in annual revenue(company wide) in a relatively short period of time and now I find myself in a position were the company has/is outgrown my capabilities. That and the fact that I am not always able to regularly work the 80 hour weeks (I know, industry standard!) makes it difficult for a company to move ahead. Thats were the rep comes in. Since this will be the first person I will be hiring for a key position I am somewhat at a loss. what I want to do is exactly what you said "establish systems that can multiply my effort through others". I have a good handle on how to price a job, how many jobs need to be estimated, the close ratios, the crew averages, the costs involved, ect. I even have some idea on how to set up some systems and proccesses. The reason I posted the questions was becouse I value the information provide by the members and was hoping (and have) to learn from people who have crossed this road before.

    $50,000 would mean $700,000 if it were straight commission. Looking back I see that I typed Straight when I should have said A combination of straight and commission. 1/2 of that $50,000 would be salery and the rest commission bringing the sales down to 350k, and some of that would be generated from Snow Control revenue. Definitly doable I think.

    The points you made Harold are excellent and I fully intend to have some type of structure in place before I hire.

    And Godfather, Many of the questions you asked were questions I didnt know to ask and was able to answer on my own. The info you provided will help me along nicely.

    Gentlemen, I want to thank you for your insite, advice and the time you have taken to share it with me.
  10. I have a question on the snow removal part.

    How would a percentage figure be made for this?

    This would be a varying situation. You never know when, how much, or if it will ever snow. Also the ice control.

    Plus you have per a push and per a season.

    Would they still get commissions on sales you have closed already? Or resigning contracts. And for others you have.

    And you are welcome. LGF

    I had some more, but they slipped my mind while typing this.

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