I own a landscaping company, and recently I hired some superstar employees. One of them is really good, and I'd like to turn him into a salesman. How should I start this process?
The first thing I'd do is talk to some other landscaping companies outside your area that are about your size, while big enough to have a salesman or two, and pick their brains as to how they're structured. You could go visit them personally, or it could be as simple as a phone call. Just let them know you're thinking about hiring your first salesman, and find out how they pay their guys and if it's working well for everyone.
What we're talking about here is called best practices in business. Find something that works for someone else in your same industry, and apply it to your situation. Think of it this way. If you wanted to lose weight, you'd begin by doing what thin people are doing, right? You emulate behavior that generates positive results.
Another thing I'd tell you in this kind of situation is to make sure the person involved understands that any compensation agreement you initiate in the beginning is on a trial basis for a specific length of time. You're venturing into uncharted territory here, and while you want to make sure your new salesman makes enough money to eat and have a decent life, you don't want him to make more than the company.
Come up with a temporary compensation plan that's agreeable to you both at the outset. Then, have an agreement to revisit the plan in 90 days, six months or a year down the road. There may be some time, and a little bit of give and take involved, but in the end you've both got to be okay with the upside and downside of the scale and the natural results. You'll both be really happy if he's busting it and making himself and the company financially successful. But as a business owner, you kind of want him to starve out (not literally) if he's not making sales!
Dave Ramsey is America's trusted voice on money and business. He's authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids. It will be released April 22nd. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.