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Dedicated Sales Staff & Commission Sales
Introduction
For all small businesses experiencing growth there comes a time when dedicated sales staff must be employed to fully utilize production capabilities and exploit ongoing opportunities. However, most small business sales originate from the efforts of the owner and through repeat business, but at the same time the owner also manages the day to day business requirements.
Taking the leap into a full-time sales commitment by seeking an experienced salesperson is a very big financial step, as well as a step in the right direction of course. How you initiate the financing of the extra worker can make or break your business plans.
There are a number of ways to initiate your sales operation:
a) Employ an experienced salesperson on a fair basic salary with the opportunity to earn commission from every sale, based on the salesperson having to do something in the sales process to ensure the sale. If the salesperson has no part in the sale you are paying them by the amount of people that YOU get to come through the door which is hardly the responsibility of a salesperson!
b) Take on an experienced salesperson who will also share other non sales related tasks, but work towards a full time sales deployment. Pay a fixed salary that represents your need to have this person 'helping out' in other areas of your business.
But, ensure sales are their main responsibility as this person may turn into another administrator and not your answer to your sales needs, but more importantly, a salesperson helping out in non-sales activities whilst there are sales opportunities at the same time is not going to be at all impressed.
c) Start a salesperson on a low basic and pay a good commission on every sale. A 'low basic' must at least be recognized as approaching a salary in it's own right, but not enough to contemplate surviving on, I concede!
d) Start a salesperson on no basic and pay a very good commission on every sale: hardly a favourite of salespeople but if the commission is high enough all sales, especially the first one of the week/month, will produce a high moment: and it is only 'a moment' as good salespeople are looking for the next sale before the ink is dry…
e) Start a salesperson on a low or no basic with commission on sales over and above the first, say, four sales each week. This is a situation to avoid (in my opinion) as turning up on a cold Monday morning in winter knowing that it will probably be Wednesday afternoon before you start earning commission cannot possibly motivate and is preparing for failure.
Commission rates should count on every sale, and not after a certain number of sales as those non-commission sales become a necessary evil in the salespersons mind: ask yourself whether the customer care from the salesperson is better for the commission sales as opposed to the first four sales - in this scenario.
The theory of commission is to pay a basic: the basic must be enough to be a sign of your faith and backing in the salesperson, but not too much so that the commission becomes a side issue. Further, too low a basic can de-motivate and make the salesperson down-beat before starting the weeks work.
Basically, if moderate sales target's are not achievable and low or no basic is also part of the deal, the turnover of staff will match that of those industry's most associated with salary/commission issues - double glazing, door-step sales and telemarketing - and probably exceed the cost of paying good rates in the first instance!
It almost begs the question as to why anyone would plan a sales operation based on a high turnover of staff, limited (or no) job experience, fast track training, low/no basic, (although) good commission (on the face of it) and an attrition rate exceeding First World War pilots: but they do as they knock on our doors every week trying to sell us something that unknown to them was touted to us by an ex colleague last week!
Dedicated sales staff is a big move for any small business and great restraint is required to not use the 'extra body' as an odd job stand in, as is the way for a lot of small business staff: and with good reason when all hands are needed to maintain a level of survivability in the small business sector.
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