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I am praising the Lord today because I think I may have finally found – after a long search – a good man to help me with our business!! Many of you may not know, but presently I have been working HB part-time. I work full-time as a band director/percussion specialist. My hours for available work have been seriously limited – especially in the fall w/football etc. I have been seeking a trustworthy person to run my van during the weekdays – wow, it’s like finding a needle in a haystack. But a man in our sunday school class recently lost his job and I felt lead to open a discussion with him – having known him for a long time. He is really excited – and so am I!! My question to the readers here is, considering my situation, I am considering a commission based pay to give him incentive and ownership in his efforts. This may sound aggressive, but I am interested if anyone else out there does such a thing! I am considering use of the van 24-7, cell phone, uniforms, training etc. + 35% of all jobs (derived weekly from actual deposits made). In addition I would offer monthly bonuses based upon sales goals we both agree upon. I would begin advertising agressively to assist in growth and remain responsible for all business costs and liability. Any input out there?? BTW my plan is to go full-time HB by the time my son graduates from High School in (3) years and hopefully have two vans operating by that time.
Hi Jeff,
15 years ago I decided to build my own house, so I found an employee to run my business, I worked out a deal close to this (memory is starting to fail) Remember this is 15 year ago dollars, $250.00 base pay plus 25% comm. for gross dollars up to $750.00 per week after that 50%. It may of not been the best, but he later bought that area from me when I became a State Owner. Make sure and talk with accountant because there are IRS laws that you must follow or they will hit you for full time employee, things like he must have phone and book jobs, he (or she) must have van all the time. I’m sure other people will answer on your question as well.
Hope this helps
Ron Smith
PS This makes them pass out business cards etc. etc. when they are slow because THEY want more business, so they wind up building up your business.Hey thanks for the input Ron! And a thank you to Gordon also who shared some ideas with me over the phone! I love the rationale of commission-based, because it makes the employee feel like they have control over their job – and income. There’s incentive to sell the protector, rakes, spotter bottles, add upholstery, etc. The higher the ticket – the higher the pay! Given this scenario @ 35%, with daily sales at a minimum of $250 – the employee would earn $437.50 gross for a five day week. That’s more than if he had worked 40hrs for 10$ an hour. And that’s for a low sales volume. Using an idea from Gordon, base pay could be say 20% and the other 15% earned from 95% customer satisfaction rate based upon follow-up calls by me. These numbers are just for example! Anyone else have anything else to add?
Jeff good luck with the new employee, I know how hard it is to find them. I think you realy need to sit down and go over all of your finances before you do something that ends up killing your buisness. What is your proffit margin per month in %. This has to include everything from chemicals to insurance and dont forget advertising and fuel. Find out what your work comp is going to run you and payroll. You might find that you really wont be making very much in the end. I have never done the commision thing with any of my guys. I dont want to give them any reason to oversell or over charge. I will give bonuses based on performance. We also treat them very well. Always give them a trial period with review before they become a full time employee. Last think big. Where are you wanting to be in one/two/five years down the road. The bigger you are the smaller the profit margin becomes. You might have to hire more people in the future. Once you set a pay rate you cant go back and change it.
I am just trying to think of all the things that coud go wrong. Good luck with the new guy and I hope that your buisness really goes through the roof because of it.I use a commissioned employee and I think it works great for us. I’m in a metropolitan area and paying an hourly wage would kill me because of traffic and travel time. Also, I don’t have to worry about my guy milking the clock (I don’t think this guy would anyway) or taking “the long way” to jobs. On the upside, he does have an incentive to keep prices where they should be and I havn’t seen any cases of gouging.
Heed Greg’s advice, however. Look at your margins. You might find that 35% is a bit much to start with. My guy started at 20%, went to 22% after 90 days, and I’m looking at another raise based on good evaluation cards. If you start at 35%, what room will you have to give raises or bonuses? I realize our businesses are different and we are able to absorb different costs, but these are factors to consider.
Best of luck. It’s great when you can find good help.
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