Well, basically because they sold $2 million in business in no way means you made $2 million. I have no idea what your expense structure looks like. If you operate a great business you likely have a 25% margin. If that is the case, you are paying that person 40% of your net profit. More than that by the time you figure the taxes and so forth.
At any rate, not that it matters. I think I misread your original post and you are thinking of 5%, which seems super fair for both of you. I am absolutely not against paying people well to do good work. I am merely pointing out what I have seen having done exactly what you are talking about doing. Not that all people work the same way and would react to the exact same compensation lan the same, but my bet is they will. if you pay them enough to not be motivated, they will stop being motivated. This is why I say your residual should expire at awesome point so that to keep making great money, they have to keep doing great work. That is all I am saying. But hey, maybe I am wrong. On Mon, Sep 21, 2020 at 4:17 PM Matt Hoppes < mattli...@rivervalleyinternet.net> wrote: > Why would I not be able to pay them if they are bringing in $2 million a > year I should easily be able to pay them that amount of commission and why > would I forget that they are the reason that we are where we are? > > I have always had the stance that if an employee works hard and is the > reason that the company has succeeded and they should be rewarded. > > I don’t see any reason why I shouldn’t pay the person who is literally > single-handedly responsible for bringing in that much business as well. And > hopefully they will continue to bring in another 2 million and they can be > making 400,000 a year. > > As someone else stated that type of person is very valuable and you don’t > want them to leave to go somewhere else. > > Plus again why should I make $2 million while the person who is > single-handedly responsible for that money coming in have to worry about > where their next paycheck is coming from. > > We’ve done projects where we have brought in $200,000 in the project and > every single person who is involved in the project got paid extremely well. > Yes I own the business but if you’re there in the trenches with me working > on a project that pays that much I’m going to give you some of the profits. > > On Sep 21, 2020, at 5:13 PM, Lewis Bergman <lewis.berg...@gmail.com> > wrote: > > > I don't think I mentioned anything about residential or business. I would > assume you would only want/need a sales person for business accounts. Mass > media can handle the residential subs. 10% of gross is a pretty huge > number, but hey, it's your call of course. The trouble comes when they do > everything you asked them to, and you can't afford them. Then what. > > I would just be really cautious about residuals and definitely have an > expiration less than that of the contract. But maybe you will have a better > experience than all the salespeople that have worked for me. You can get > someone to maintain $2M worth of accounts for a lot less than $200,000.In > fact, you can likely get 3 people. The issue is once they start making > $200k a year from residual, will they work just as hard to bring you > another $2M or just sit back and coast. > > Enterprise Fleet has an interesting approach where they pay the > salesperson > > On Mon, Sep 21, 2020 at 11:41 AM Matt Hoppes < > mattli...@rivervalleyinternet.net> wrote: > >> This is for business. Not residential. >> >> On 9/21/20 12:21 PM, Lewis Bergman wrote: >> > I wouldn't pay someone bot a month upfront and a residual, but maybe I >> > am greedy. The big thing I think you should watch out for that always >> > scuttles sales people I have apus that way is their residual gets so >> > high they no longer have to get new clients to earn a great living so >> > they eventually stop selling and just work part time maintaining their >> > base and lifestyle. >> > >> > At least that is what has happened every time I have tried it. So I >> > would either limit residual to some period of months and only extend it >> > if they both upped their monthly and renewed for a longer term. >> > >> > None of that was what you asked and the better softwares will >> > produce commission report for you. >> > >> > On Sun, Sep 20, 2020 at 9:38 AM Matt Hoppes >> > <mattli...@rivervalleyinternet.net >> > <mailto:mattli...@rivervalleyinternet.net>> wrote: >> > >> > I’m planning to do 100% of the monthly rate upfront and then 5% >> > ongoing. >> > >> > I figure the more they help the company grow they should be making >> > more too. >> > >> > A 350/month account - that’s only $18 to the sales person. >> > Insignificant to the company, but massive potential for them >> > considering what they are bringing in. >> > >> >> On Sep 20, 2020, at 10:32 AM, Jesse DuPont >> >> <jesse.dup...@celeritycorp.net >> >> <mailto:jesse.dup...@celeritycorp.net>> wrote: >> >> >> >> We do it as one time commission - usually 1x or sometimes 2x the >> >> monthly for that sale. We give it to them again on a renewal. We >> >> usually have term contracts so as to ensure the revenue stream >> >> over time since we're paying the commission up front. We haven't >> >> done a recurring commission yet. >> >> >> >> >> >> *Jesse DuPont* >> >> >> >> Owner / Network Architect >> >> email: jesse.dup...@celeritycorp.net >> >> <mailto:jesse.dup...@celeritycorp.net> >> >> Celerity Networks LLC / Celerity Broadband LLC >> >> Like us! facebook.com/ <http://facebook.com/ >> >celeritynetworksllc____ >> >> >> >> Like us! facebook.com/ <http://facebook.com/>celeritybroadband >> >> >> >> <celeritynetworks-GIF.gif> >> >> >> >> On 9/20/20 8:19 AM, Matt Hoppes wrote: >> >>> Does anyone have an excel sheet or other tracking method for a >> commissioned sales person they’d want to share, or share how you do it? >> >>> >> >>> We are hiring our first outside sales person. She has a base >> salary, but then gets bonuses based on closed sales, as well as recurring >> commission for accounts that stay. >> >>> >> >>> Trying to figure out the best way to track this. >> >> >> > -- >> > AF mailing list >> > AF@af.afmug.com <mailto:AF@af.afmug.com> >> > http://af.afmug.com/mailman/listinfo/af_af.afmug.com >> > >> > >> > >> > -- >> > Lewis Bergman >> > 325-439-0533 Cell >> > >> > > > -- > Lewis Bergman > 325-439-0533 Cell > > -- Lewis Bergman 325-439-0533 Cell
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