Today's Program - Members Seeking Advice

Nick Carr - I need to get out of the office more to meet with people.  I need to bring someone and pay them a salary plus some type of bonus pay.  I need ideas on how to fairly structure it. 

• Salary based on management of old policy and commission based on new policies.  And perhaps a bonus based on retention.

• Figure out what it would cost to replace a non-renewal and put that into the calculation. 

• What's worth more, new business or retention?  Pay more for the most profitable segment.

• Some things could be out of his control.  Tie payment to what is in his control.

• Are there industry standards?

• Pay him on P&L profitability.

• The function of generating new business will be more on you than him.

Tim Green - We want a young, aggressive person to go out and solicit business.  But we don't know how to set up a pay schedule for a sales person.  One of my fears is loyalty.  Will they take the business and go out on their own.

• There are plenty of sales people out their that would still rely on you for the critical elements of doing the job (knowledge of the paint industry).

•  You are selling to people that don't know paint specifics so perhaps the sales person wouldn't need all the knowledge.

• You should be able to train a good salesman to sell a paint job.  If they are not a painter, you don't have the risk of them going out on their own.

• On the pay scale, I would suggest a base salary on bad months and commission on good months.  Commission on either profit or total job.

• If commission exceeds the base salary than pay the additional.

• Which type of business do you want to get?  Bidding existing or going out and soliciting.  Businesses are loyal to there contact.  If he get a Lowes, they will be loyal to him and not the business.  It is all about the relationship.

• Non-compete contract.

• You are getting into a compensation situation where you will need a written agreement that gets into non-competes.  Arizona laws are tricky so get professional help to write the agreement.  It needs to be part of the consideration of employment.

• When you talk about percentage of profit, you need to clearly define what profit is.  This guy will not like your lattes coming out of the profit he gets paid on!

• There is a whole piece to being a professional sales person (phone calls, generating leads).  You want to use a professional recruiter to find a great sales person.  You want them to get YOU in the door.

• See the lawyers last!  I would challenge you to disregard everything people just said.  Nick is talking about going out to do the sales and hiring someone to stay at the office to handle the in-house work.  Relationships are key.  You want to be the one out there developing them.  Turn what you are thinking of around.  You go out and get the work and hire others to do it.

• Hire someone to generate the leads.  You go out and sell the job.

•  Do not put the lawyers last.  What is your biggest asset?  If you want to build a paint business that you can sell at retirement.  Goodwill is your biggest asset.  You need to protect that.  Don't let employees steal that.

• You are a sales person.  You have the passion.

• How many jobs have you done over the years?  Do you market to those clients?  There are several thousand potential leads that you could go after (repaints, referrals) that would be cheaper than hiring a sales person.

• Go after your competition's best sales people.

• You have to show that new person your vision.  When you find that right fit then you bring the attorney's in second.

• If you hire a person away from a competitor, make sure they don't have a contract as you might be buying into a lawsuit if you interfere with that agreement.

• Blanket restraints on open trade are hard to enforce.  Hands-off agreements are easier to enforce.  You expended time and money to develop that business.

• It is up to the employer to create an environment to make employees want to stay.