At some point in time, if you are going to grow your construction business, you are going to need someone working on sales full time. Now, maybe sales is your thing and you want to do that full time. Fantastic.
However, to hit your ultimate business goals, you may end up wanting to add another salesman. If sales isn’t your thing, then you will certainly need to hire a salesman.
Either way, you are going to be faced with a critical decision.
How should you pay your salesman?
Draw (salary) plus commission? Bonuses for sales generated? Increased commission with increased sales volume? A higher commission for new customers? Straight salary?
All of these are commonly used approaches. Not one of them is likely to produce the profits you seek.
Most salesmen will ask for a pretty stout draw and a relatively modest commission based on revenue sold. Don’t agree to that!
Draw plus commission lines the pockets of your salesman regardless of whether he is making you any money. The purpose of draw plus commission is to drive sales volume, not profits. Don’t fall into the trap of thinking sales volume is important.
You need your salesman to focus on PROFITABLE work. Let your competition sell the unprofitable work. That’s work you don’t want and you certainly don’t want your own salesman bringing it to you.
How do you get your salesman to chase profitable work? Only pay your salesmen for profitable sales.
Base your commission plan on the gross profit the work is sold for. Don't pay draw plus commission. The only money earned by the salesman is the commissions earned on gross profits. Naturally, there a few wrinkles to the system you need to be aware of.
Here's What We Do
We determine the commission rate that will enable you to hire talented, driven sales personnel that will grow your business quickly and profitably without burdening you with the cost of a poor sales effort.
Here's How You Benefit
You minimize your financial risk while maximizing your potential income. You create a situation that will draw highly talented salesmen like flies. You align sales efforts to your financial best interests.
Here's What To Do To Get Started
If you would like to really supercharge the efforts of your sales force and get them laser focused on profitable work, call us (913-961-1790 or 708-774-6500). We've set up several of these systems for contractors. They never failed to grow the business.