When To Expand

lowell5slide

hey guys love the info. I was wondering I have a pretty good company going. I have finally moved into a managerial position and have about two crerws and about three guys working > iwas wonderin , I hear some of you tqalk about sales gys and I was wondering when do you know your ready to expand to include positions like a sales team or person . and how do you pay them slary and commision or just commision

Double-A

What type of contracting are you doing?

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"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

Grumpy

If you are a specialty contractor I think you will find most sales guys work on straight commission. Keep in mind I will further refer to this position as an estimator, and not a sales guy. The difference is sales guys usually don't know what they are selling but know how to ask for the sale... and usually you will have a lot of over-promising and problems from sales guys. This has been my experience anyways.

An estimator is someone who probably has hands on experience. He may still be willing to work for straight commission if he has confidence, but I have found lots of guys trading in the tool belt for the calculator are insecure about the whole commission thing. They want the security theya re used to for getting paid for their hours.

There is something called a draw system where you guarantee them $x per week, so that even in the slow times, and when they are starting up, they are getting paid... and then that money is basically an advance deducted from future commissions. I lost my ass on this, but the draw system is the standard.

The best kind of commission structure is one based on profit, often times 40% of the gross goes to the person who sold the job. I wouldn;t offer up 40% of my gross unless this person were doing more than just sales. I would want them to actually take a hands on approach to manage the job as well.

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Ok so if you are not a specialty trades contractor and you are a builder, it's my experience these guys usually get a salary and some low commissions. However doing a $5000 roof is alot different than doing a $3,000,000 addition so their commission doesn't need to be too high.