We are finally looking to take the next step in out operations, and hire a salesperson to generate leads and close on some deals. How much would be fair to pay this person on a weekly or monthly basis? We were going to give them straight commissions, with a small stipend to cover some costs (gas, cell phone, internet). Would 75% of 1 month gross per office based on their lead be fair? Also we were figuring 30% gross on our generated lead would also be fair. Thoughts? Thanks!

There are many ways to compensate a salesperson.

It depends where you are located, some areas the cost of living is higher and they will need more.

Straight commission plus a car allowance, all business gas, lunches with prospects, tolls, parking, all business expenses.

Draw (usually for a 6 month basis) plus mentioned expenses. Then 33 1/3 % each month of what was sold. That means that if one account is sold that 33 1/3 % will continue as long as you have the account each month.

Salary plus expenses and 33 1/3 percent of net per job.

Is this person also going to be responsible for 'watching' the accounts that the/she sells? Then the 33 1/3 % will continue each month as long as they are 'watching the account.

If you want good, dedicated and competent people this is what is necessary. Always remember that IF they are making money... so are you...

Stringer

So I am looking to do straight commission. So on a $400/month gross account, subtract the expenses (labor, supplies, advertising), which calculates net (say $200), they would get 33 1/3% of that ($66.66/per month)? Do they get paid on this one account indefinitely or a set time? What do you mean by Draw (usually for a 6 month basis)?

Yes, we pay an annual salary of $40,000 plus expenses plus a car plus any commission earned. The 33.333 % of the net from what they sold is on going as they have the contact and rapport with their client, they are responsible for them so as long as you have that client and the salesperson is doing their job and 'seeing' to them then they get the commission.

Our salespersons that have been with us on average of 3 - 5 years earn about $75,000 to $100,000 annually.

Sales are the lifeblood of a company, there are no operations, admin, or future without it.

Stringer

We posted the job on Craigslist and Backpage, but we have had absolutely no interest whatsoever. Where do you recommend the top 3 places online to post for a job like this? Or if online in not the way to go, where would be a better place? Thanks for the help!

I would pick the most read newspaper in your area and place an ad in the 'sales' part.

Also trade mags.

Also you may put the word out amongst your competitors.

After all you want someone local don't you?

Stringer

One other potential direction would be to get strategic relationships with people that work independently for like industries. As an example a guy that sells janitorial products is out in the market all day. He/she has relationships already and may know many people that need or want to change servicesbecaiuse of quality price or from inhouse to outsource. In this situation you are eliminating the salary and can work with straight commission because they already have an existing salary. The only thing they are really doing is making the introduction. That's all you essentially need! You must keep that relationship a clean one by not selling there client with anything they once or could have sold them. If you pull this off effectively you at any given time can have numerous salespeople working for you and not have a payroll associated with it. In these cases compensation is 75% of the first months billing paid over 90 days. When the client re-ups they get that commission again evey year. Hope this helps!

Charles Cestaro
Servco Industries

Charles, not a bad idea at all...

Stringer

Thank you Stringer. I have 35 years of battle fatigue in this business and as you well know many of the relationships and accounts we acquire are through existing relationships word of mouth etc. I prefer private sector work as oppiosed to governmental contracts. Often in NYC you will find as many as 40 bidders at these pre-bid conferances. Its often a waste of time but every once in a while you get lucky and get awarded one. Sometimes salesman can be very effective but a costly salary week after week to carry. Its just another thought in keeping the company moving forward with less overhead. Thanks for the thunmbs up!

Welcome to our 'aged' group Charles. I have almost 40 years in 'the business' also. My own company for the last 20 or so.

Keeping costs low while maximising profits... essential.

You're welcome,

Stringer