[HELP] How to Hire Commission Based Workers

[FranciscoNET 0]

I am in the CCTV Installation and Computer Repairs business in New York State. Although I have been doing computer repairs for more than 15 years, I have been doing CCTV installations since 2006 (7 years). I have never hired anyone to help me do anything, and most of my jobs have been a 1 man operation, and those that have not been a 1 man operation were because my father helped me (large and big multi-day projects).

 

Now, I am presented with a self made dilemma. I call this self made because this idea originated from me. The idea is about hiring someone to refer me new CCTV jobs in the neighborhood and in turn I will pay this person a 10% commission.

 

Background of this person: This person that I am going to be hiring is living a very miserable life, no jobs, rents and bills are piling up. To make matter worse, the head of house hold recently suffered a stroke, and this person was the source of income, even though this person is fully conscious, he is semi paralyzed, on a wheel chair, but he can speak. He is being taken care of by his lady (not married), his lady cannot do anything outside as she has to stay home most of the time looking after for him. There is a 20 something year old lady (daughter) whose job pays minimum wage and is not enough to even pay the rent alone.

 

This 3 member family goes to the church that my father goes to and he is helping out this family with some money every month in donations. A lot of people on my father's church has gathered to help this person out financially.

 

So, trying to help out this family, I have proposed a 100% commission based job offer to the daughter of this family, the job consists of that she has to go roaming locally searching for business in needs to have a new CCTV system installed, and if she finds a qualifying job (that converts) I will pay her a 10% commission. A typical 4CH CCTV installation runs for $1,600 so she will earn 10% of that. If she finds enough paying jobs, this can easily turn into a full time success job for her, satisfying her family's bills.

 

My questions here is the following, since this is my first time hiring anybody for any purpose, I would like to know, what papers or documents should I prepare to give it to her (my employee)? I am thinking, maybe the paper should be a contract sheet that the people she refers to me must sign and she returns the signed document to me telling me that this business wants the CCTV job, or maybe just a flyer with my phone number that she will simply hand over to the owner of the business with some explanations/presentation that she will do on site (after being trained by me?)

 

I don't exactly know how to proceed on this area that would allow her (my employee) to gain conversions as easily as possible. This is the first time that I will have an employee under me.

 

I would like some pointers on how to best proceed, I would like to proceed as perfectly as possible and would like her experience to be as pleasant and converting as possible.

 

I will greatly appreciate any help I can get regarding this subject matter.

 

Have a great day!

[Owain 0]

I don't think anyone outside your local state can advise on employment related issues and there is probably a small-business support organisation in your area that could advise.

 

This person might not be an employee, but a self-employed sales agent. The treatment of tax, social security and other insurances, and travel and other expenses will vary greatly depending on employment status. You really do need specific local legal advice.

 

Will this person be obtaining sales leads only, or will she be doing estimating as well? You have to be aware that if she promises a low price to a client to get the sale, your profit margins may diminish.

 

Probably a multi-part no-carbon-required form pad or order book (a large commercial stationer will stock the NCR paper with top, middle and bottom sheets in various colours so you can make up your own order book, or you can get them printed up although small quantities are expensive)

http://www.mmprint.com/blog/2011/carbon-required/

http://www.mmprint.com/NCR_forms.cfm

 

- top copy you for billing - you need the original with the client's signature on

- 1st copy client

- 2nd copy sales agent

- 3rd copy you for works

 

If you can't run to a custom NCR order pad then duplicate/triplicate books with generic order/invoice can be obtained from stationers.

[tomcctv 190]

I have proposed a 100% commission based job

 

 

hi at 10% there is just no money in it.

 

 

A typical 4CH CCTV installation runs for $1,600 so she will earn 10% of that

 

you will then loose money.

 

 

 

your biggest problem is she has no experience of sales ........ or design.

[bigglebowski 0]

I have proposed a 100% commission based job

 

 

hi at 10% there is just no money in it.

 

 

A typical 4CH CCTV installation runs for $1,600 so she will earn 10% of that

 

you will then loose money.

 

 

 

your biggest problem is she has no experience of sales ........ or design.

 

Thats what I thought, how do arrive at the $1600 for 4Ch, is that labor only? Assuming you make additional money elsewhere per install.

 

As for her income realistically how many systems would you expect her to sell vs the number of hours she will put into it. Also would you be compensating or providing the vehicle for doing the calls. Would she be still working full or part time elsewhere? At least with her minimum wage job she has a guaranteed amount of money coming in.

[FranciscoNET 0]

I have proposed a 100% commission based job

 

 

hi at 10% there is just no money in it.

 

 

A typical 4CH CCTV installation runs for $1,600 so she will earn 10% of that

 

you will then loose money.

 

 

 

your biggest problem is she has no experience of sales ........ or design.

 

Are you saying that 10% is not enough money to pay for someone to refer me paying customers?

 

If she refers me a job that paid $1,600 she will earn from me $160 and if she does things right, she can refer to me multiple paying jobs per day, so that's 160 times jobs per day, thats alot of money that she will be earning that she didn't had before.

 

About that I will lose money, you have to keep in mind that she will only get paid if the customer she referred to me ends up being a paying customer and only 10% of the contract value. She will not get paid for customers that ends up NOT being paying customers. Please elaborate how I would then lose money?

[FranciscoNET 0]

I don't think anyone outside your local state can advise on employment related issues and there is probably a small-business support organisation in your area that could advise.

 

This person might not be an employee, but a self-employed sales agent. The treatment of tax, social security and other insurances, and travel and other expenses will vary greatly depending on employment status. You really do need specific local legal advice.

 

Understood, this person will be a Self-Employed Sales Agent.

 

Will this person be obtaining sales leads only, or will she be doing estimating as well? You have to be aware that if she promises a low price to a client to get the sale, your profit margins may diminish.

 

She will not be promising any money outside what I will tell her to say. Plus, I am thinking of designing graphical flyers with price estimates that she will have to show to customers as part of her presentation. I do not foresee her inventing a different price other than what will be discussed with me. <---> or I might rather just take care of all pricing situations when the customer gives me the call and explains to me what they want and then I get to physically see the customer, survey their place and THEN tell the customer a price. Using this model, I only have to design a presentation that I will show her to get my customer initially exited about the service. There are many different ways that I might proceed with this plan, I will take user experiences as they post here under account to dictate who best I shall proceed in such a way that will guarantee that my "Self Employed" agent gets the highest quality prospects as possible.

 

Probably a multi-part no-carbon-required form pad or order book (a large commercial stationer will stock the NCR paper with top, middle and bottom sheets in various colours so you can make up your own order book, or you can get them printed up although small quantities are expensive)

http://www.mmprint.com/blog/2011/carbon-required/

http://www.mmprint.com/NCR_forms.cfm

 

- top copy you for billing - you need the original with the client's signature on

- 1st copy client

- 2nd copy sales agent

- 3rd copy you for works

 

If you can't run to a custom NCR order pad then duplicate/triplicate books with generic order/invoice can be obtained from stationers.

 

That is an excellent idea, currently I have been dealing with my contract sheets in a non NCR way, but NCR would make me look more elegant, will take a close look at it.

[FranciscoNET 0]

I have proposed a 100% commission based job

 

 

hi at 10% there is just no money in it.

 

 

A typical 4CH CCTV installation runs for $1,600 so she will earn 10% of that

 

you will then loose money.

 

 

 

your biggest problem is she has no experience of sales ........ or design.

 

Thats what I thought, how do arrive at the $1600 for 4Ch, is that labor only? Assuming you make additional money elsewhere per install.

 

No, the $1,600 price is for everything, labor, PC DVR + accessories 4CH PCI Full D1 Hardware Compression card, 700 TVL CCD 24 Leds IR 0.01 Lux Cameras, Siamese cables, front 19 to 24 inch monitor (my choice - unless customer specify otherwise), 12V 1A per CH 7 Amps Transformer Circuit Braker with auto reset plus anything else required to complete the project. Believe me, my profit oscillates within the 50% of the total asking price range (-/+ 10%) and the reason why I cannot charge any more is because of stiff competition in my area, I have truck load of competitors doing jobs for as little as $800 using systems they buy as BJ's with cheap CMOS cameras. Even though I can never compete on price, obviously my hardware is of alot greater quality than a cheapo BJ's entry level DVR, but I compromise at an average of $1,600 for a typical 4CH installation. You might be thinking that I am charging too low, but on the area I operate charging $1,600 for 4CH is already seen as almost reaching sky high. I get most of my materials, such as the Full D1 hardware compression DVR card directly from the manufacturer, and I have taken advantage of volume quantity discount to get even a better price. I have been dealing with this same DVR manufacturer since 2008 and as early 2012 I switched to their full D1 version of this card. The software is extremely stable, never crashes, can tolerate uptime in excess of 180 days or more on a Windows platform.

 

So far, everyone that I have given this DVR server has been extremely happy, they can see the videos on their iphone, android, kindle, and PC/Macs.

 

As for her income realistically how many systems would you expect her to sell vs the number of hours she will put into it. Also would you be compensating or providing the vehicle for doing the calls. Would she be still working full or part time elsewhere? At least with her minimum wage job she has a guaranteed amount of money coming in.

 

I am speculating that she will be giving me at least 1 qualifying lead per day after she gets maybe 5 to 10 no's. I do not have any plans to offer her any type of compensation, other than the agreed upon compensation, which is the 10% payment when she refers me a paying customer. She will only get paid if the customer pays. Like I said, this will get a 100% commission based job, there wont be hourly payments. By the way, she doesn't drive, so she wont be using a vehicle. She will start roaming her own neighborhood by foot, business to business doing presentations, and then she can take it to other neighborhood.

[Owain 0]

This person might not be an employee, but a self-employed sales agent. The treatment of tax, social security and other insurances, and travel and other expenses will vary greatly depending on employment status. You really do need specific local legal advice.

 

Understood, this person will be a Self-Employed Sales Agent.

 

Her status might be a matter of law, not your choice.

[Owain 0]

 

If she refers me a job that paid $1,600 she will earn from me $160 and if she does things right, she can refer to me multiple paying jobs per day, so that's 160 times jobs per day, thats alot of money that she will be earning that she didn't had before.

 

About that I will lose money, you have to keep in mind that she will only get paid if the customer she referred to me ends up being a paying customer and only 10% of the contract value. She will not get paid for customers that ends up NOT being paying customers. Please elaborate how I would then lose money?

 

She may be a fantastic saleswoman and obtain 10 sales a day for you, 6 days a week. 270 sales a month, that's $43,200 you owe her at the end of the first month.

 

However in that month say you can only do a maximum of 1 job per day. That's $43200 revenue in theory, which you hand straight over to her. You still owe your suppliers for the equipment, you still have your overheads and expenses to pay.

 

In practice your clients are slow payers. At the end of the month only half have paid. So you hand your saleswoman all your revenue, and $21600 of your savings. You still owe your suppliers for the equipment, you still have your overheads and expenses to pay.

 

The sales leads this saleswoman generates are only of value to your business if they generate a profit; they will only generate a profit if you can do the work profitably.

 

How much additional work can you take on? How much time are you currently idle? Would it be better for your business to have this person in the office answering phones, making out invoices, or even unpacking equipment and making up cables, at basic wage, while you go out and do installations?

[ssnapier 0]

I am not comfortable discussing the legal aspects here (taxes, paperrwork, etc.) but as for the sales side of it, I highly recommend making an investment in this piece of software: http://www.saleztoolz.com/

 

Take the time to set it up properly and this will greatly help this person you are considering.

[cs8488 0]

I do not think you become a employer and make her an employee.

You can make her to be your partner, you can share for every project.

That will be wonderful.

[RandyParlee 0]

Man you are making this harder than it needs to be. I've had all kinds of sales gigs and typically you get some kind of written agreement where you say I will pay X% for all business generated by Kim (for a names sake) who is an independent contractor and to whom you owe no compensation for her time. Then let her rip it up. If she sells the hell out of it then worry about lawyers and structures.

She has some more liability as a private contractor with insurance and taxes but that isn't your problem.