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My family and I run a small fire alarm and security company in New Jersey. I realize that this is an electrical forum, but I feel that our industries are extremely similar and this forum seemed to have a great user base. We currently do our own sales, but as we grow and work becomes more scarce we have realized that it would be beneficial for us to hire a dedicated salesperson. Being that none of us have had experience with filling this position, I was hoping that you could share with me typical compensation for this role. I know that there would be a base salary, but I am not sure about how the commission is normally decided. I would appreciate it if anyone would be willing to share their experiences with the average commission percentage, as well as if that percentage is applied to the gross sale or just the net profit of the sale. We already provide benefits to our employees as well as a profit sharing plan, so that would already be included with any new hire.

Like I said, I really have no experience with this whatsoever, so the more information the better and it would be greatly appreciated.

Thanks for your help!
-John
 

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salesperson

First off, this is not the place; but since you are here...how do you grow when work is getting scarce? It would seem if you are not working you would be available to sell more product.
 

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I'm sorry if you feel that this is not the place. Unfortunately, our industry is very small and often considered a subset of the electrical industry, and therefore there are very few forums where I could post this question that is specifically pertaining to my business. I made sure to post this under the business and sales section.

With regards to the issue about work being scarce, that is in fact the case. We have grown steadily over the years and try to have a very good relationship with our employees. With that said, we have worked very hard (often at the cost of our personal wages) to not lay anyone off even during these very slow times. As business has continued to stay at a slower rate, it has come down to either do something to bring in more work or start laying off. We are doing what we can to prevent the latter.
 

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Salesperson comp.

No offense taken. We are a reseller/distributor and installation company.
OKAY. Let me ask this; Do you have an advertizing budget, or a web page? I am not trying to be nosey, it's just that my son has gotten me to ask these kind of questions since he graduated from college and moved into the basement.
 

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Yes, we already have a fairly extensive website that is advertised through Google's pay-per-click with a fair amount of traffic response. We also do some direct mailings. The main problem is that we are spread too thin to properly follow up and, for lack of a better term 'hound' prospective clients. We are not looking to hire a slick blue-suede shoe type, but we do want someone that will be able to spend his/her day entirely on bringing more work in the door rather than being a jack of all trades.

P.S. Do you have any more room in your basement? I might need a place at the rate things are going..haha
 

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Salesperson

Yes, we already have a fairly extensive website that is advertised through Google's pay-per-click with a fair amount of traffic response. We also do some direct mailings. The main problem is that we are spread too thin to properly follow up and, for lack of a better term 'hound' prospective clients. We are not looking to hire a slick blue-suede shoe type, but we do want someone that will be able to spend his/her day entirely on bringing more work in the door rather than being a jack of all trades.

P.S. Do you have any more room in your basement? I might need a place at the rate things are going..haha
If you are spread too thin then that is the sign that you need more help. That being said, I would advertise to the public for help and for a person willing to take a temporary job, and on commission. If you are not LOSING jobs for being too high in price then there possibly room to pay a salesperson based on commission. If jobs are scarce in your area most likely it has affected other companies and there may be laid off installers that could talk the systems up for you. Even at this point in your company it is still a risk; That's why they call it entrepreneurism...or something like that. Maybe other electricians in your area could receive a finder's fee for referrals.
P.S. The basement is kind of full; as well as the garage and three rooms upstairs...He says he thinks better when he has SPACE.
 

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John, it is noble you are taking on jobs at cost, to keep good people working, but seperate your personal emotions from business if you can.

You have to survive too.

I would think you would want a sliding scale for compensation, based on gross sales and not net profit. If he sold the job and you screwed it up and it ended up not making any money, how does he get paid?

say: $0-25,000= 15%
$25K-$100,000=12%
$100K-$1mill= 7%


You are planning a base salary, benifits and commission position?


Work being scarce? Everyone has seen better days, no doubt.

Is it safe to assume you sub for elctrical contractors and GC's and this area has brought on the scarcity of work?
 

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We are not doing jobs at cost (margins are much tighter, but there is profit), but as I'm sure many of you know all too well, there is lots of overhead and not enough work. I understand your point with regards to emotion and business. Our decision is not entirely based upon emotion, but it is hard to find decent people who know your company. We are looking to be more proactive in our approach to sales. When the economy was in better shape, a large amount of our work came from word of mouth (along with other leads of course). We still get much of our work from referrals, but are looking to take a more proactive approach to augment it. I would never hire a salesperson to sell work at cost. All that I was looking for was some ideas of what other contractors are using to compensate their employees.

Yes, we do sub for electrical contractors, but most of our work is organic and direct for building owners/management firms.
 

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I hired a salesperson as a sub during OCT-NOV-DEC. It worked out pretty well. This was the arrangement we had...

Base pay of $1600 per month as long as he pitched at least 15 prospects on work valued over $1500 per prospect. He had to generate his own leads and set his own appointments. He could substitute (for instance) three $500 projects for one $1500 project, in which case he'd have to pitch more people that month to make his base pay.

Any work actually sold (I did the estimates), he got 10% when the customer paid. Didn't matter if it was a $500 project or a $50,000 project. (he only sold one $50,000 project).

I'm actually still getting calls from his three mohths of work, so I'd say it worked out pretty well. It ended up costing me about 10 grand in three months, but my calendar is pretty damed full for 2010. I can really only do service calls one or two days a week now, which is where my real love is.
 

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I hired a salesperson as a sub during OCT-NOV-DEC. It worked out pretty well. This was the arrangement we had...

Base pay of $1600 per month as long as he pitched at least 15 prospects on work valued over $1500 per prospect. He had to generate his own leads and set his own appointments. He could substitute (for instance) three $500 projects for one $1500 project, in which case he'd have to pitch more people that month to make his base pay.

Any work actually sold (I did the estimates), he got 10% when the customer paid. Didn't matter if it was a $500 project or a $50,000 project. (he only sold one $50,000 project, which happened to use a couple parts that totaled nearly 30G's).

I'm actually still getting calls from his three mohths of work, so I'd say it worked out pretty well. It ended up costing me about 10 grand in three months, but my calendar is pretty damed full for 2010. I can really only do service calls one or two days a week now, which is where my real love is.
Where did you find the salesman?

Word of mouth, add out in a paper?

Sounds like a great idea.
 

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Where did you find the salesman?

Word of mouth, add out in a paper?

Sounds like a great idea.
I actually met him at a farm where I buy milk. I struck up a conversation and learned that he was recently let go from the phone company as a (of all things) fiber optic salesman. His daddy was an electrician, so he had a good working base knowledge. He drove a decent car (newer model Saab), dressed well, was well groomed, and spoke well, so I hired him on a trial basis. He really got me more work than I needed, so I guess that's the best a fellow could hope for. It also got his house out of foreclosure, so I guess it worked out well for both of us. I hope his kids had a nice Christmas.
 

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I actually met him at a farm where I buy milk. I struck up a conversation and learned that he was recently let go from the phone company as a (of all things) fiber optic salesman. His daddy was an electrician, so he had a good working base knowledge. He drove a decent car (newer model Saab), dressed well, was well groomed, and spoke well, so I hired him on a trial basis. He really got me more work than I needed, so I guess that's the best a fellow could hope for. It also got his house out of foreclosure, so I guess it worked out well for both of us. I hope his kids had a nice Christmas.
Do you still have him as a salesman??
 

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First off, this is not the place; but since you are here...how do you grow when work is getting scarce? It would seem if you are not working you would be available to sell more product.

I took offense. Not to you personally. But to the whole notion of alarms being a 'lesser commodity'. That's crap.

Myself, and I'm sure others here have made a pretty damn good living off of low volt wiring. I'm an electrician by trade. Fortunately in my early years i was hooked up with a master who did alarms. I have done the construction,resi and commercial,retail,industrial etc.
The alarms were just another munitions in the arsenal. it has paid DIVIDENDS.

my main offence comes from some who think if your not running 4" all day and pulling 350's all night you are some how less than a man.

When the real truth is (as has been documented here also) The more you know and can do in the trade,the better off you are.

Professional diversity is the name of the game.

I feel better now. thanx for the space!:thumbsup:
 
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