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Old 02-18-2010, 06:44 PM   #1
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Hi everyone, things have been kinda slow here, and so I've decided to try and enlist the help of a salesperson on a commission basis. This guy has a family and so I really want to make it work for both of us. He's coming over tomorrow to speak with me about a plan. I decided to give a very competitive commission to get the ball rolling, because I know it will will slow for the first while. I told him 20% commission on labour. I think this is a very fair rate. So he needs to bring me around 10k in contracts per month to work full time doing sales. My question to all of you is how is the best way to use his skills?

I made sure he has a cellphone, fax machine and transportation before speaking with him, so he can engage potential clients. Im just not sure all of the avenues to send him on to get leads. I figured I could help him build a list of builders, property managers and others to help get him started. But then what do I send him out with? Some glossy photos of our work? pamphlets? brochures?

Also do you think door-to-door is a viable method of sales? how about cold calling? what if he just walks into business and tries to sell them there?

Any help greatly appreciated.
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Old 02-18-2010, 07:15 PM   #2
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20%

Sorry but for a low expectation of 10k per month it sounds like a lose - lose situation for both parties.

What kind of lead generation are you offering him?
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Old 02-18-2010, 07:21 PM   #3
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If things are slow and you have very little work, then why can't you be engaging in sales activity instead of hiring someone to do this vital task for you?

And 20% is greater than or close to half of many people's profit margins...so I am not sure how this would work out in your situation.
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Old 02-18-2010, 07:25 PM   #4
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Personally I never success with a dedicated salesperson starting in a slower market, I'd spend your own time working on sales and keeping the 20%

Plus it takes a LOT of training to properly train a sales guy to learn to deal with a lot of the different things that come up on a quote with confidence and accuracy, otherwise you could be plagued with underquoting as well as lose 20% of your labor costs just to the sales guy.

Do yourself a favore and wait until you are getting TOO BUSY to do sales anymore, then get a sales guy and make sure he has experience in the industry.
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Old 02-18-2010, 07:37 PM   #5
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Quote:
Originally Posted by NEPS.US View Post
20%

Sorry but for a low expectation of 10k per month it sounds like a lose - lose situation for both parties.

What kind of lead generation are you offering him?

Thanx NEPS. The 10k is a bare minimum, hopefully he could bring in more than that. The 20% is on labour only. So works out to more like 15%. My thinking is that I'd have nothing to lose because he's paid commission only. I just thought if Im slow, than well I may not be the best sales person. Maybe hiring someone that does just that would boost sales. I figured also I could start him out painting part time to have help when I get too busy, than flexible help when it's slow. He would be the contact to the leads he generates, then I'd go with him to do the estimate. I couldnt rely on him for accurate estimates. I just need to get my foot in the door first.

have you ever used a salesperson before?
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Old 02-18-2010, 07:38 PM   #6
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Quote:
Originally Posted by y.painting View Post
If things are slow and you have very little work, then why can't you be engaging in sales activity instead of hiring someone to do this vital task for you?

And 20% is greater than or close to half of many people's profit margins...so I am not sure how this would work out in your situation.
Hi. I realize that 20% is quite a bit, but I need to get the ball rolling for both of us. Once its rolling I'll just add a little buffer onto the bids to compensate.
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Old 02-18-2010, 08:01 PM   #7
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Mr. Mike is a hell of a shotgun closer and is willing to relocate.
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Old 02-18-2010, 08:07 PM   #8
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Quote:
Originally Posted by SterlingPainting View Post
Thanx NEPS. The 10k is a bare minimum, hopefully he could bring in more than that. The 20% is on labour only. So works out to more like 15%. My thinking is that I'd have nothing to lose because he's paid commission only. I just thought if Im slow, than well I may not be the best sales person. Maybe hiring someone that does just that would boost sales. I figured also I could start him out painting part time to have help when I get too busy, than flexible help when it's slow. He would be the contact to the leads he generates, then I'd go with him to do the estimate. I couldnt rely on him for accurate estimates. I just need to get my foot in the door first.

have you ever used a salesperson before?
Please dont take this the wrong way... this meant to be constructive and just my opinion.

From what I know you are a solo operator. I think you need to figure out how much business you need to either stay as a solo or to grow. How much per employee?

As far as getting your foot in the door it would seem awkward to have a salesman show up to sell a job, then make another appointment with you for the estimate and then schedule you to do the work? I just dont see it working too efficiently.

I do not know what type of lead generation you have but in order to hire a saleman you must have a decent lead flow to begin with. I also think that a salesman has to be a estimator as well. A solid pricing structure and pricing systems to follow is a must. You must ask yourself - What is he really selling? Who is he selling to? How will the work be priced? How will the work be perfomed? In asking these question you must also determine if he would be selling solo operator type jobs, single crew size, ect. Selling for solo operator might be harder than selling for a crew of five.

Then comes the hard part of experience. A door to door vacuum saleman might have a hard time crossing over into a service trade with numerous pricing pitfall's.

I understand you are slow and are looking for ways to generate business. Understandable and I sympathize. Maybe you should look into polishing your own skills and start to develop a work force before making the leap of a salesperson.


I have been tossing the idea of hiring a saleperson around for a while but I still dont feel like I have strong enough systems in place for a salesman to truely be successful to my expectations.

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Old 02-19-2010, 07:30 AM   #9
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Does the guy have sales experiance?

Will he be able to perform the estimate? (Ideally you want that contract signed a.s.a.p.)

Will you be giving him draws against his commission?

Are you going to set a key demographic for him to sell to?

Are you going to track his leads/calls? And are you going to set goals or a minimum per day?

Will you track his closing rate?

What kind of presentation will he make? Are you going to provide marketing materials?

Think it can be a great idea, but how many here really know how to utilize a salesperson? Not trying to be negative, just trying to provoke thought.
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Old 02-19-2010, 09:19 AM   #10
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I've been threw a few sales guys..in my day. There good for take-offs and drinking coffee with the office lady's... I never let them KNOW the price...just give me the sq ft, and any suggestions. Let them "burn out" those eyes.
You do what you want, but your NOT ready for all that DRAMA YET.
Maybe in 5 years ,the economy will pick up, and you can absorb the "training cost" of some "mouth guy" with good eyes ?


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Old 02-19-2010, 04:40 PM   #11
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Quote:
Originally Posted by bikerboy View Post
Does the guy have sales experiance?

Will he be able to perform the estimate? (Ideally you want that contract signed a.s.a.p.)

Will you be giving him draws against his commission?

Are you going to set a key demographic for him to sell to?

Are you going to track his leads/calls? And are you going to set goals or a minimum per day?

Will you track his closing rate?

What kind of presentation will he make? Are you going to provide marketing materials?

Think it can be a great idea, but how many here really know how to utilize a salesperson? Not trying to be negative, just trying to provoke thought.

I agree. But I can see why NEPS and some others have been trying to tell me that it might not be that beneficial, because they know I'm a small company. There must be a way to correctly utilize a sale person..I was just thinking of door to door with "would you like a free estimate?" or "let us send a professional designer your way for a consultation".

I'm just trying to get any leads I can right now untill I get some of the larger jobs I've bid on.
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Old 02-19-2010, 04:44 PM   #12
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This is'nt the same guy with the building space is it?

Seriously though I would think if you are slack you could focus on the sales aspect of your business. Does this salesman have any painting sales background?
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Old 02-19-2010, 10:33 PM   #13
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I've thought about hiring a salesman but I need about 4 times the amount of leads I'm receiving. The way I figure, the salesman alone would need to bring in a min. 25,000 a month in sales. Which a four to five man crew should be able to handle that volume. Plus material, plus his commission which would be around 8%-10% plus other cost like advertising and etc. I can handle the sales until a can get the amount of lead that I would like to have. I personally believe hiring a project manager is better and you handle the sales. You need to have confidence in your ability to do the job, thats your salesman (which is you).
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Old 02-19-2010, 11:12 PM   #14
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I say go for it, I don't know where his lead generation is coming from, if he is cold calling up business for you then he is gonna have to work very had to sell any jobs so I think that should be the determining factor in his cut.

If you get into a few jobs and see you aren't making the profits you need or want, then you will have to work something out. Not gonna hurt to try it thou.
my 2 cent..
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