Hey everyone,
As my b2b service business scales, I've been drawn to focus more on our branding and company process to make sure that when real growth comes we can scale quickly. In the first year, I took the company basically from 0 - $230k. This year with our current clients we are on track for $600k but my goal is 1m. I was able to reach those numbers working on sales for about 8 hours a week. With more dedicated time a salesperson should be able to hit those numbers after 3-6 months. (I have considered that it could be part-time as well, I don't care how much they work as long as the sales are there)
I'm trying to figure out how much to pay my sales reps and wanted to get some opinions. I'm planning on a low base salary against commission. The salary will be $14 or about $2,400 a month.
I run the company based on the "Profit First" model. Basically, everything gets divided into separate accounts by the percentage as soon as it comes into the bank. It's a great read by Mike Michalowicz if anyone is interested.
COGS: 55%, I can't do much to bring down the COGS. The actual cost is 50% but I set it at 55% so that the bank account grows larger than our expenses monthly.
Marketing: 3%, We set aside 3% for marketing and advertising. At the moment we don't do any paid advertising so it's being saved to go towards a new website and the branding.
Expenses: 5%, Expenses are pretty low but it covers the minimal expenses and a part-time employee to help with AR
Company Savings: 2%, This is money set aside to reinvest in the company for things like new computers or equipment.
Sales Person: TBD, This will be the total salary and commission for this position.
Sales Support: 2%, This is for a vehicle, insurance, and food/gifts/lunch to bring to clients. The Salesperson can spend it how they like.
Here are the real numbers. I set the "# of jobs" to what I currently was able to bring in. Here's a google sheets link, I hope I did the protected ranges correctly. You should only be able to change the "# of jobs" and the Sales Person Percentage. LMK if I didn't get it right.
docs.google.com
I have the sales position set at 7% at the moment. If a full-time salesperson is able to do what I did (I only worked 8hrs a week) they would be making about $4,505/month or $54,054 a year. If they can double it they can make over 100k. I believe the 100k mark is possible but it would probably take 1-2 years. 50k isn't great in California however this position required very minimal training. You basically just need to show up consistently and be likeable until their current provider makes a mistake or wants to give us a shot. On top of that we have metrics that show our service is the best in the industry.
So I'm curious to know what people with experience have to say, please let me know what you think the sales position percentage should be and/or if you'd do something completely different.
In addition if you have any comments about the other percentages feel free to give me your opinion as well.
Thanks guys,
Shaun
As my b2b service business scales, I've been drawn to focus more on our branding and company process to make sure that when real growth comes we can scale quickly. In the first year, I took the company basically from 0 - $230k. This year with our current clients we are on track for $600k but my goal is 1m. I was able to reach those numbers working on sales for about 8 hours a week. With more dedicated time a salesperson should be able to hit those numbers after 3-6 months. (I have considered that it could be part-time as well, I don't care how much they work as long as the sales are there)
I'm trying to figure out how much to pay my sales reps and wanted to get some opinions. I'm planning on a low base salary against commission. The salary will be $14 or about $2,400 a month.
I run the company based on the "Profit First" model. Basically, everything gets divided into separate accounts by the percentage as soon as it comes into the bank. It's a great read by Mike Michalowicz if anyone is interested.
COGS: 55%, I can't do much to bring down the COGS. The actual cost is 50% but I set it at 55% so that the bank account grows larger than our expenses monthly.
Marketing: 3%, We set aside 3% for marketing and advertising. At the moment we don't do any paid advertising so it's being saved to go towards a new website and the branding.
Expenses: 5%, Expenses are pretty low but it covers the minimal expenses and a part-time employee to help with AR
Company Savings: 2%, This is money set aside to reinvest in the company for things like new computers or equipment.
Sales Person: TBD, This will be the total salary and commission for this position.
Sales Support: 2%, This is for a vehicle, insurance, and food/gifts/lunch to bring to clients. The Salesperson can spend it how they like.
Here are the real numbers. I set the "# of jobs" to what I currently was able to bring in. Here's a google sheets link, I hope I did the protected ranges correctly. You should only be able to change the "# of jobs" and the Sales Person Percentage. LMK if I didn't get it right.
Sales Salary
I have the sales position set at 7% at the moment. If a full-time salesperson is able to do what I did (I only worked 8hrs a week) they would be making about $4,505/month or $54,054 a year. If they can double it they can make over 100k. I believe the 100k mark is possible but it would probably take 1-2 years. 50k isn't great in California however this position required very minimal training. You basically just need to show up consistently and be likeable until their current provider makes a mistake or wants to give us a shot. On top of that we have metrics that show our service is the best in the industry.
So I'm curious to know what people with experience have to say, please let me know what you think the sales position percentage should be and/or if you'd do something completely different.
In addition if you have any comments about the other percentages feel free to give me your opinion as well.
Thanks guys,
Shaun
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