my business plan - your opinions?

by phetus
6 replies
Hi all. I just want to start by saying thank you to everyone here for all the valuable information you share. This is my first post here, but I've been lurking for quite a while and learning a lot. I'm currently in the process of starting my own offline marketing consulting company. I have two like-minded friends, both of which I've worked with before, who are interested in pursuing this with me. We each live in adjacent counties in Tennessee, and that sort of gives us territories by default. I'd like to get a little feedback to see what you guys think, especially on the pay rate.

I've identified a number of different marketing projects/strategies ranging from local business SEO, discount cards for local businesses, and some fundraising efforts that the company will be using to make money. Initially, the pay will be entirely commission-based. Taxes aside, this is how I am thinking our profits will be divided:

50% commission to the associate who landed the deal
20% to me as owner
30% company funds (which will be further divided and used for expenses, charitable causes, and possible monthly profit-sharing to smooth out bad months)

I have always wanted to do something that positively affects the community, and this idea will enable me to do that. Ideally, I would someday like to be able to give a house to a needy family, improve a park, make a sizable donation to Toys for Tots around Christmastime, or any other just cause whenever possible.

My main question is what do you think of my revenue division? I really don't mind paying my guys a lot to encourage them to close more deals, although I will most likely put a cap on their commission payments. In my mind, this plan is easily scalable when I decide to expand into new areas.

Any and all feedback is welcome. Thanks.
#business #business plan #opinions #plan
  • Profile picture of the author David Miller
    If there's residual income involved, I would lower the commission to the sales rep and give them a percentage of the monthly residual. This will give a sales rep more of a "piece" of the business and encourage them to book good business by establishing a relationship rather then a one shot customer.

    However, you must be careful when you offer a residual to a sales rep. Be sure that you have a contract that states the residual ends when the sales rep no longer is active with the company....and... you have to define with care exactly what "active" means. You don't want a situation where someone comes in and books a bunch of business that someone else has to service while you're sending a non-active former rep a check.
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    • Profile picture of the author Kevin AKA Hubcap
      You could also think about charging a set-up fee and have that go to the rep who made the sale.

      For recurring services you can have the rep receive commissions from those payments for a limited duration...say a year or so.

      Talk to an attorney or paralegal because business partnerships have more fracture points and you'll have two partners. Make sure you're all on the same page and make sure agreements on how funds are distributed are written down.
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  • Profile picture of the author Not So New
    I agree with giving the rep a piece of the residual. If you can keep a good sales person happy, he will will keep selling your stuff : )

    Shawn
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  • Profile picture of the author s62731
    Yep... Definitely give the rep a piece of the residual. But make sure he doesn't screw you over
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  • Profile picture of the author manny2513
    The sales people brings the bread bro so if they feel you are taking care of them then they will take care of you so give them a piece of the pie but always be sure you are leaving enough room for you to profit.
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  • Profile picture of the author Preben Frenning
    Give them most of the start-up money (But obviously not more than your own cost), and a slight bit of the residual. Also, to quote your post "put a cap on their commission payments" - don't do this. Salesmen wants to have possibilites, so doing this can be very demotivational to some.

    If they ever quit, their portfolio will be transfered to another salesman that deserves it. You should make some guidelines about this as well.
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