We have been in business for over 30yrs.and we are GAF Certified and have always kept busy but things are slowing up in our area, has anyone had any experience hiring a salesman?If so how do you pay per job? whats the up and down side?
Just a thought, but shouldn’t this be under the “Roofing Business” tab?
He was looking for some help not where to put his question. Wish I could help.
There are numerous ways to compensate people, we prefer a performance based incentive system. I think this is particularly important with Sales People.
One popular method for sales compensation is to tie their commissions to profits. For example, you might take a % of the job to cover overhead. Then do a profit split that is equitable.
It also depends on what your expectations are for your Sales People. If 95% plus of what they’re going to do is pure selling, the straight commission program works reasonably well. If you are going to expect them to do a lot of “company things”, you’ll likely need to have some part of their compensation be salary. I strongly believe the best sales people want to be compensated in some performance related manner as this can generally allow them to make the most money.
If you’d like to get details of our compensation plan, PM me and I’d be glad to share it with you in more detail via email.
Most roofing co’s that I have worked around will pay a % of the total profit & then “charge back” about 1.5% to 2% of the total cost of the project for overhead (this is called the “office fee”).
$ 10,000 job, total contract.
$ 5,000.00 Profit after labor & expenses (not fuel or sales rep costs, but things that can be directly charged to the job)
Split 40%, $ 2,000.00 commission
Less $ 150.00 office fee.
Total commission = $ 1,850.00
Note: If you pay a set % based on the total sale price of the job irregardless of the profit, then you are doomed for failure.
[quote=“fsg”]We have been in business for over 30yrs.and we are GAF Certified and have always kept busy but things are slowing up in our area, has anyone had any experience hiring a salesman?If so how do you pay per job? whats the up and down side?
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2% office fee?
most companies i have looked at pay plans for, were around 10-15%, then a 60/40 split.
i cant imagine giving up that much of the profit on every job.
Their can’t be much downside of a salesman besides if he’s unprofessional and ruined your reputation because it doesn’t cost anything to have him really. He adds new business that you wouldn’t have had otherswuse so his cut isn’t really money lost.
Some companies pay around 35% of the overall profits, but I think the best system I’ve seen is when the salesman gets around 10% of any check he bro he in and gets paid on the spot.
I think an office fee is ridiculous. You should want your salesman to get work done and sell. The more they sell the more money you make.
Our typical roof sales rep commission plan is 10/50/50 split. Our sales reps average over 13% of the job cost as commissions. So that is much better than a straight 10% plan. We have Reps that average 15 to 16% as well. We provide quite a few leads, we do the Xactimate estimate, we supplement, enter the material and job orders and do the invoicing. So the Sales Rep primarily Sells. That seems like a fair compensation plan to me.
We are moving more and more to W2 Sales Reps. Salary plus a modified profit split for compensation. We generally start Reps out with a draw for 6 to 8 weeks to give them some money while they’re establishing some commission flow. If they do well and hang around (the two go hand in hand), we offer them a W2 position. Most accept it, some prefer to remain independent.
That comes out to a little less commission than the 10/50/50 formula.
I like the 10/50/50 split, but I do most of the work. I am very involved with mine, from start to finish. Invoicing included. I am getting away from using Xactimate for little supplements only because it is cumbersome to do all f that. I just create an invoice and add the supplements with a description of what they are and the cost. the majority of the time, they just update their scope of loss and sometimes it comes in at the supplemented amount, sometimes a third of it, but always more than the original.
I am currently at a company that does a bracket % based on the price of the roof and the number of squares used. I don’t suggest this at all. I am frustrated with it, especially when my numbers frequently come in higher than theirs. Whatever you set up though, be very transparent with it. If you do a profit margin split, make sure you have a good system for showing the profit analysis. All material invoices need to be accounted for for each and every job. Keep this in mind before you hire too many salesman that will “cost you nothing”
Yes we need salesman please cal at 703 499 7676 Thanks Ed