I remember posting a while back about the level of production I was getting out of sales reps getting paid on base + incentive vs. pure commission. I took a position that base + incentive worked best at that time... My thinking has changed.
As this video points out, very very few employees are ever going to give their entire self to a company. We've all been there, if there's no incentive for you to be GREAT at your job, you're not going to strive for greatness. You're going to strive to not get fired - particularly if there are no advancement opportunities.
I operate in the short term working capital space. It's hyper competitive. A couple of years back I raised some seed capital and we couldn't find a "growth engine." But, we kept a "hobby business" on the side and have matured it into a form of leverage. I've gone from being one of the many fighting for deals and subsequent commission checks to being in a position to provide the leads guys need to get commission checks. I literally had a "Warrior" whom I am well acquainted with get very mean and nasty with me yesterday because I don't believe in free lunches... Then he turns around and offers me a 90% split on commissions for the first 5 deals! 90% my way! LEVERAGE.
I might be speaking gibberish to some, so let me add a bit of color here... Our specific skill is at finding other people's customers. Let's say you live in northern New York and your local liquor store takes short term working capital on Monday, chances are by Thursday I'll have him on the phone with another broker who can offer alternative solutions - including more money. Now, the guy who wired him the money has invested heavily into making sure we don't find it, to no avail.
The market conditions are so tough, co-brokering with us seems like the best option of many brokers who are intent to ensure they keep earning $100k+ per year. It's either that or cold call in competition with 63 other brokers for the same deal.
Some of you have been on the same grind that I've been on recently and have invested heavily in your businesses. Whatever they may be. You're more polished. Better organized. And more and more word of mouth business is trickling in...
However, I think you should at least consider building in some employee leverage so as to scale your business in a way that makes your sales reps / agents very happy, and one that makes you a boatload of money.
One of the guys I look up to around here; bob ross has an interesting take on leverage. He's leveraging his knowledge to earn money off of folks who are happy to implement it. Think about it, at some point he may have said;
|"I'm not going to hire a nationwide cold calling army to sell 9x12 in every city in America, I am going to teach folks how to do it. They'll pay me to teach them, then they'll pay me to provide design and printing services (most of the time)."|
bob ross, if I'm off the mark here please dress me down via PM.
Anyway, these are two concrete examples I know of from folks who have been active here over the years in what they're doing. I think the survival plan of anyone who has gotten to the point of having an established business should be to thrive now. The only way to thrive is to scale. The most effective way to scale is to use leverage.
Anyone have any thoughts or ideas about what they're doing to build employee / human leverage in their businesses?