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Benefit of adding a sales person

Just a fun numbers game that I’m probably going to get 100% wrong because this is my first time doing this, be kind: Let’s say you get 1000 bids for an average ticket of $350 and close at 50%. So that’s $175,000. Doing Profit First calculations (10% profit, 40% expenses, 35% employee wages, 15% taxes) You probably have $17.5k in profit, $70k in expenses, $61,250 in wages (2-3 employees), $26,250 in taxes.

You hire a salesperson at 25% commission to do those 1000 bids and every time they go out to do a bid, they have to come back with a new one (neighbor, referral, a commercial job in the area, etc) – so your 1000 bids turn into 2000 bids. You have a killer presentation and that close rate goes from 50% to 70% on the original 1000 bids and 50% the secondary 1000 bids (at $350, that’s now $420,000 from the 2000 bids). That’s a $245k increase in sales, but since 25% goes to the salesperson, they get $105,000 – a pretty healthy salary for a salesperson and that 25% comes back to you when the customer repeats next season because you’re awesome at marketing and have new services to cross-sell. Maybe the salesperson will even get incentives for having that customer repeat services in the next year.

But we know that when we send a person to the home, can see that there are more services needed than they’re aware of or didn’t know you offered and offers packages, the average ticket may go from $350 to $1000. You realize there’s less drive time when you’re working bigger jobs and you need less of them – saving you tens of thousands of dollars each year (60 minute drive time/day, 1 employee at $18/hr + taxes, set up tear down, walkthroughs.. 20 days per month, 11 months per year, that’s $5,390/employee, for 10 employees, that’s $53,900/yr). Also, your job minimum may go from $200/house to $500/house. Other benefits may include fewer clients but better high paying clients and less postage to these fewer clients when retargeting.

So let’s say that 40% of the 70% go for the upsell with an average of $700 in the upsell and the remaining 30% stick with the original service that they wanted for $350 – $280,000 + 105,000 = $385,000. and the 50% of the second 1000 bids go for 25% at $700 and 25% at 350 = $175,000 + $87,500 = $262,500. So those two final numbers are $647,500 (And remember the $5,390 from reducing drivetimes – That’s 5 $18/hr FT employeess (plus employer taxes + 10% WC) – results in an additional 3.7% in increased profit).

So now our Profit First numbers are:
13.7% Profit: $97,125
40% Expenses: $259,000
31.3% Wages: $202,604
15% Taxes: $97,125

Now imagine this…

What’s the very last question you ask your customer?

“Is there anything else you need help with on your property?”

What does that mean?

Do you need a painter? Do you need a new driveway? Sealcoating? Roofing? Windows? Lawn care? Electrician? Plumbing? ANYTHING?!?

You become a solutionist, you go out and find someone who can do the work for them. And now you become a subcontracting company, charging the subcontractor 15-20% for the work you’ve found for them. And your customers love you even more because you just made their lives easier and come to you when they need more help around the house. So even if only 10% of the bids needed additional work around the house with an average ticket of $1,000, that’s 200 * $1000 * 15%, that’s $30k. But we know that these people need a lot of work around the house, and that 10% of bids is probably really low.

Mind you, I’ve never done more than $175k/year and don’t do this yet myself, but I’m getting ready to dip my toes in the water.