How to recruit Commission only sales people

lcharm

HI Guys,

My business (health insurance consultations) is <6 months old now and I really want to start building a B2B & B2C sales team around me so I can spend less time doing business development and more time doing what I do best, however, I can't afford to pay anyone a salary so it would need to be on a commission only basis.

Gone are the days of commission only sales people and I know for most people commission only sounds unattractive but I was wondering if anyone has done anything like this before successfully and how to make it attractive to a candidate?

Any advice is apreciated especially from people who have succesfuly implemented this into their own business.

There may be drinks involved if anyone helps me out and it's successful :beer:

MissMotivation

We are going through something similar at the moment (different business)

What I would say is that the commission structure has to be attractive enough to entice a potential employee to go commission only. I, personally am not commission only but the package that we are offering is so good (if you put the effort into it) that I have seriously considered going down this route.

I think it takes a certain sort of person to take this risk, obviously, if they believe in themselves, are hard-working, motivated and enthusiastic then the benefits of being CO outweigh the disadvantages.

Not a very helpful post I know but I would be interested to see what replies you get.

We have been advertising for 2 months now and only had 5 applicants! :eek:

lcharm

Thanks. Since we are in different businesses if you ever want to bounce any ideas of me and vice versa please feel free to PM me!

paulwf

OP could you clarify the situation please? It sounds like you don't have the money to pay someone a full wage yet you expect someone to do a full job?

Either you've got the money to pay them or not, how you tweak the pay structure is just a matter or working out how to motivate your employees best.

lcharm

There are plenty of businesses out there that have a working model which is why I've posted on here in the 1st place.

Especially in these times where people are being made redundant and have been out of work for months. I know of people that are offering to work for FREE in non-sales roles just so they can prove themselves and get experience.

paulwf

lcharm wrote: »

There are plenty of businesses out there that have a working model which is why I've posted on here in the 1st place.

Especially in these times where people are being made redundant and have been out of work for months. I know of people that are offering to work for FREE in non-sales roles just so they can prove themselves and get experience.

I'm playing devils advocate here, so feel free to tell me to get lost, I won't get offended, I just like to see people make as much money as possible

Your original post and the one by the next poster suggest that commission only sales is unattractive and doesn't result in many candidates. You also hint at using this model as you can't employ to pay somebody the going rate.

The post I quote above doesn't clarify/answer the point I made. Can you afford to pay someone (through whatever pay structure) a realistic amount or not?

lcharm

I would be paying people a generous amount for any sales they generate if that's what you mean. We are a small independant company so I would be supporting all the sales people personally

What I meant is I cannot affird to actually employ someone on a salary, i have no budget for that.

Savvy_Sue

Genuine question - can you legally employ people on commission only these days? What about NMW? Entitlement to paid holidays? SSP? and so on ...

paulwf

lcharm wrote: »

I would be paying people a generous amount for any sales they generate if that's what you mean. We are a small independant company so I would be supporting all the sales people personally

What I meant is I cannot affird to actually employ someone on a salary, i have no budget for that.

In that case you do have the budget for it and it is just getting your head round how to account for it. Paying someone on 100% commission £1,000 for 10 customers is the same as paying someone on a salary £1,000 for 10 customers.

However it sounds like you don't expect a person to bring in enough customers to get a proper wage, otherwise you'd be able to budget for that.

This is a theme that pops up regularly on this forum. A one person business can work as you are prepared to put in 80 hours a week for £10,000 a year whilst you grow the business. The problem is then how to expand and get to the next level when employees rightly expect a proper wage from day 1.

Now may be a good time to go back and re-write your business plan. Scenarios include:

- Free up your time so you can do sales by hiring people for a few hours a week to do general "housekeeping" tasks such as book keeping, cleaning, answering the phone.

- Perhaps the business model works best and makes a nice profit with one person, expanding by adding employees just absorbs any profit made.

- Change your financial model, could you charge more to each customer or charge less and attract more customers, or cut expenses, or whatever else it takes to increase your profit margin so you can afford staff? Perhaps at the moment you are too cheap so not profitable?

lcharm

Savvy_Sue wrote: »

Genuine question - can you legally employ people on commission only these days? What about NMW? Entitlement to paid holidays? SSP? and so on ...

I wouldn't be employing them, they'd be working on a self employed basis as an associate.

Many large and small businesses do it so they can have a sales team while mitigating the risk that any one person doesn't generate much through to lack of effort and reward those that put the effort in.

paulwf

Thanks for the feedback.

I'd be prepared to take somone on a salary basis if they prove themselves after the first 3-6 months. When I mean a sales team I do really mean just 1 good person working on my behalf.

I've got friends/family that actually help with housekeeping so it's not an issue. I'm out on the road doing business development most of the time and then when I get clients that takes up most of my time as it's a time consuming process so it's either one or the other.

My prices are dictated by what all the health insurance providers are charging as i'm independant so I usually go with the the most suitable & cost effective product but my overheads are low.

YEOVILGOM

There are lots of people prepared to work on a commission only basis - subject of course to the right level and product.

I have PMed you details of a friend who specialises in matching commission only sales people to businesses.