1. DEDICATED SALES STAFF & COMMISSION SALES
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.
2. OLD DEBTS - NEW DEMANDS
We have had an interesting few weeks dealing with two queries from our visitors asking for help with debt recovery agencies trying to collect old debts that one said was genuine, but years old, and another who had no idea as to what the debt was for. But what makes these circumstances disturbing is the tactics used by the debt agencies. The following two examples reflect the majority of enquiries we have and continue to receive in respect of debt agency tactics.
Case 1 (GBP is GB Pound)
The 'debt' was for GBP110.00 for a mobile phone contract that was cancelled five years ago. The customer remembers the problem at the time with the termination clauses (three months notice - no minimum period) that were eventually outlawed. The mobile company (five years ago) agreed to call it quits and not to pursue the 'debt' for the sake of customer relations.
Case 2
The 'debt' was for GBP60.00 for music CD's that the customer received through one of the mail order clubs (buy 3 for GBP3.00 each, and then one per month at the 'normal'). The customer cancelled the 'membership' after completing the first year and buying all she was obliged to buy. CD's continued to be sent and were always returned with a plea to stop sending further CD's: eventually the CD's stopped arriving and nothing more was heard until now.
In both cases (not connected) a letter was sent from different debt recovery agencies (we have copies) with the name of the creditor, account number and the balance outstanding: neither had any date other than the date the demands were sent. Both said that the debtor had ignored previous recovery attempts. Both threatened the use of a local debt collector to call at their home, court action and a debt recorded against the debtor. Finally, one stated, "you have had the benefit of goods/services supplied for which you have not paid".
We (Credit to Cash) took over the responsibility to contact the creditors/debt agencies to hopefully get these two 'debts' quashed. We made a dozen calls to both debt agencies without getting through on any occasion. We finally conceded that telephone contact was not what the debt agencies wanted which left communication by letter alone (visiting was impossible with one agency as it used a PO Box number, and the other was too far away to contemplate a visit).
We sent a similar letter to both agencies, in the name of the debtors, as follows:
BY RECORDED DELIVERY
Dear Sirs
Re: Account Number 458712 Balance Outstanding GBP60.00
In response to your letter of 2nd August 2001
I have tried to contact you by telephone almost every day since receiving your letter. On all occasions, bar one call when I got through automatically to piped music, your telephone was not answered which mocks your comment on your letter that reads "calls may be monitored for security and training purposes".
The balance you claim is an error. The supplier of the goods (CD's through a members club) continued to send CD's to my home despite my numerous requests by letter and telephone to terminate my membership (terminated in April 1996. I subsequently sent all CD's back, unopened and at my personal expense.
After a few deliveries the CD's stopped, a few months after that the statements also stopped. From then, until now, I have assumed the matter to be closed. As such, you must contact the creditor and inform them of my position, being, the matter is settled, the balance is nil as no goods remain unpaid.
Please take note, you must accept my position in writing or commence legal action which I will vigorously defend. If you fail to send a specific response to this letter by the 20th August 2001 I will assume the matter is closed.
END
The Law
The law allows creditors up to twelve-years to collect debts, however, if for a spell of six-years (anywhere within the 12-years) the debtor is not contacted the debt is automatically quashed. There has also been quite a bit of press coverage on this subject but with mortgage short-fall debts.
What's Happening Now?
The problem with the non-answering telephone was probably manufactured by the debt agency as they are unlikely to want to hear from hundreds/thousands of genuine ex-customers with reasons not to pay screaming at them on the telephone.
Neither debt agency replied to the letter, although both 'debtors' were sent overlapping demand letters. It is probably a good sign that no further contact has been made by the debt agencies as on receipt of such a letter they know the profitability in pursuing the case is virtually gone and both cases have probably been crossed off their debt list. It's clear that the original suppliers of the mobile phone and CD's have dumped years worth of 'problem' accounts on to a debt agency, or the debt agency have contacted the CD and Mobile company in pursuit of such cases where they can automatically mass mail out to thousands of similar cases and then split the income with the suppliers: it MAY be the case that the debt agencies had no intention of taking legal action and used the letter content for scare value only.
If you get similar demand letters it is best to answer the letter without delay (if only to stop the follow up letters) however if you do write to them and they continue to demand payment from you, you can either ignore the follow ups in the knowledge that you have answered the letter once and that is enough, or contact the Office of Fair Trading (debt agency regulators OFT) and report the agency for harassment by them continuing to contact you when you have informed them in writing to sue you or go away! You could of course pay them to get rid of the stress ...a cold day...
