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Are there commission salesmen/women out there?

By Troxed ·
I own a new business IT services startup. Since the business is still new I still have my full time tech job. Basically I am at the stage where I am ready to start marketing and looking for clients. My question is this:

Are there salespeople out there that work strictly on commission selling IT service contracts to businesses?

Obviously, I would want to pay a salary for a full time salesman, but I'm just not able to afford that right now. I was thinking that if I could find someone to do it, 10% of the annual contract would be fair compensation. Does that sound about right?

Note: I am not looking for a salesman on the TR boards, I am just looking for some advice on hiring a salesman.

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Advice

by santeewelding In reply to Are there commission sale ...

So soon you fashion this into a leveraged operation of the sort that has the whole world in trouble.

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I'm sorry,

by Troxed In reply to Advice

I'm not sure I understand what you mean.

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Don't be sorry...

by cmiller5400 In reply to I'm sorry,

Not too many people can understand what Santee says

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Some experential tales

by drowningnotwaving In reply to Are there commission sale ...

Hi Troxed,

I've been a salesman on comms only, as well as all gamut of salesman / mgr / director from small to large.

The biggest thing I can tell you, along the lines of Santee's approach, is that simply by going comms only doesn't alleviate the responsibility to do this very, very properly and carefully.

Specifically:

* Comms-only saves you in terms of Cashflow. In terms of expenditure you will pay MORE for a good rep in these circumstrances, as obviously their risk is significantly higher than base+comms.

HINT: If you get a potential rep knocking on your door that doesn't put this position to you, you know you've got a non-keeper!

* Most small business people get shirty when they realise that, in all likelihood, the sales person will earn significantly more than they do themselves in the first few years of the business.

Are you ready for this?

(Hint: Your value is in the long-term growth of the business. The sales person is after payment in cash and/or kind.)

* You need to find out, I mean really find out, what your nearest/largest competitor paid their best rep and for what acheivement this was paid?

Then and only then do you understand what you will need to pay to get someone capable of beating them in their marketplace.

Hint: When you're growing the business, anyone of lesser capability is not "efficient", they are actually a considerable liability. It may appear that you save some cash in the short term but you also lose a lot - you lose opportunities and you lose market awareness that you don't even know you have. Your company gets a reputation for only winning the "small ones". Your competition will use this against you in years to come.

Don't compromise on getting a reputable, referencable, and rich sales rep.

* The tricky thing is to find out whether they will be YOUR comms only rep or whether they have 2, 3 or 12 products in their kitbag. Make phone calls and speak to people to find out what they are like. Google them, facebook them, linkedin them - everything you can.

* It takes a minimum 3 months (and usually 6 months) to find out if you've hired an idiot, so take the time to do all the research and referencing that you can, as the costs associated with hiring the wrong person are big, and magnified somewhat in a small company.

*Fair compensation is based upon what you want someone to do BUT how much someone else would pay them to do it in your market.

Remember you want the best, or the best-ish.

E.G. If they can earn $150k base plus comms in your city with your competitor and they have a proven track record of doing so, then you're going to be up for $200k comms only to get the same person across to you.

But if your overall capacity to deliver as a company is restricted (just for example's sake) to $1million, then you have to think hard about how you are going to find the right person and not just an enthusiastic nutter.

SO you can't simply say "10%" is good. There are a number of parameters that make up good and bad for both you and the rep that need to be taken into account.

* Like paying VAT and local taxes - make sure you pay your comms-only rep Immediately upon receipt of cash from the client.

It's really simple for this cost to spiral out of control if you are not absolutely on top of it.

There are many, many books and articles on this, but your best bet may be to go to the local chamber of commerce, find a couple of successful local businesses in similar industries to you and get their advice. Which most people are up for sharing, for the cost of a nice lunch. You'll probably get some leads out of the process too.

Which leads me to the last hint:

* It may pay you well to learn a little bit of the black art. Despite what a number of correspondents around TR think, sales isn't really made up of murderers, idiots and wastrels.

The thing to remember is that, like every other skill, there are some brilliant people who are just naturals. But for the 98% of people like you and me, there are just some basic skills to learn, practise and put into action. Find one of about 200,000 books that makes sense to you, read it and practise it.

You may just be surprised at how simple it is to be good!

Good luck!

edit shpellink and apostrop'he

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Your post is so impressive I just cannot bring myself ...

by OldER Mycroft In reply to Some experential tales

To slag you off for speeeeling EXPERIENTIAL incorrectly.

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I'm

by drowningnotwaving In reply to Your post is so impressiv ...

in sales!!! :)

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Thank you Drowningnotwaving

by Troxed In reply to Some experential tales

Thank you for the response.

We are certainly ready to pay a salesman more than we earn ourselves for the first few years. We understand how valuable a salesman can be if you have the right one. I just wasn't sure how to go about finding one. We are a member of the local chamber. I have a little sales experience and for the short amount of time that I was in sales, I excelled at it. I just don't have the time to do the sales calls myself because I still have my full time job while we try to get a few clients on the books.

Thanks again for the post, very helpful.

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Helpful?

by santeewelding In reply to Thank you Drowningnotwavi ...

I'd say it was damned-near definitive.

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