Discuss // How to build a commission based sales team?
How to build a commission based sales team?
My company is quickly growing and I am in need of a sales representative, but am not at the point where I can pay someone to work full-time. I am looking for resources and advice on how to go about hiring a commission bases sales representative.
HI Evan, this is a broad question and often dependent on your company, maybe you should look for an awesome advisor who can be involved. Check out here:http://members.founderdating.com/browse#/?results=advisors
But one thing I learned from VP of Sales at RelateIQ (Armando Mann) - make sure these initial hires are just as passionate about the vision as you are. You don't want them only focused on comp otherwise they may sacrifice company principal for their commission check.
I tried that in several companies I ran and it just doesn't work out as
they aren't invested enough to build a pipeline and close it.
Try to build up a network of affiliates or resellers. That works our
better as they have the same customer you need already and they'd get
commission for selling on your product .
That's my personal experience.
Two different thoughts about approach. 1. Working with experienced sales that is like a broker or non-exclusive sales rep for your firm; 2. There are a number of younger, hungry folks who are working with several startups; they have the passion and are willing to work against vision.
Have usually seen a tradeoff between experience and passion.
What is the product, or products?
Where do you live?
What market share do you have in said product, or service and what percent
do you want to gain?
Are you selling locally, regionally, or nationally?
How many on staff now?
What sales materials do you have in place?
What is the value proposition?
What is working for you?
What is not working for you?
Who is your target market?
How are you reaching them now?
What's your approach?
What percent of sales calls do you close, per every 10 customers called
What length is the sales cycle?
What is cash flow like?
What are your margins?
What percent of sale would you offer as commission?
How long would you provide commission on a sale? One time only, or over a
period of time?
How many sales people do you want/need now?
How many do you want to have and would they be selling locally, regionally,
Do you reimburse for expenses, such as mileage?
Do you have a presentation that can be customized per customer?
If you want, answers these then I'll either come back with some added
questions, or direct thoughts?
Brian C. Wrye
Are you prepared to hire someone young that you are willing to train? Or
someone older that has an established network that could fit the market you
are looking to sell to?
Is there any equity or deeper incentive for someone to join as a
commissioned based rep?
What is your confidence level in your company that could attract a
commission based rep?
Sorry to answer with a bunch of questions but felt they were important
Jesse D. Landry
| Senior Client Partner
M - (516) 851-8378 | E - [removed to protect privacy]
Skype - jessed_landry | LinkedIn
evan way to general a question.... knowing nothing of your product, the market, your firm, your objectives, your status ( is your product at mvp or beyond.. do you have clients? ) your finances its all over the place..sit down with an advisor or mentor for a few hours... good ones will be glad to help and not charge you..
Hi Evan, As Peter and a few others who commented before him, there's more that we would need to know before suggesting one plan over another. Questions such as, is the business repeatable and will the sales person continue to receive commissions on renewal business. Ultimately, a straight commission plan suggests that the salesman assumes all of the risks. At the same time if you are not providing any compensation besides a commission, you really loose all control over their work behavior. Happy to offer suggestions, but need to know more about you, your company, product/service, price point, etc.
Depending upon the industry you're in, the rep will expect to make a
certain amount or will jump ship. Calculate what base you can pay the rep
and how much commissions can be made. If you are selling a product, make
sure you're able to produce enough for the rep to sale and make the
commission. You can offer profit sharing or stock grants additionally.
Dishoom Foods, Inc. (the makers of Cobra Corn)
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Mar 09, 2015
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