Business Proposition Advice

Discussion in 'Self Improvement and Being Successful' started by tamiclay, Mar 2, 2010.

  1. tamiclay

    tamiclay
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    I recently started working for a startup accessory company. I have been working as a sales rep for the past two months and have closed a few accounts. I currently am the top rep besides the owner. The owner is feeling overwhelmed and believes that I would be more valuable to her in an in-house position, helping with admin work, doing the books, and coordinating events and selling the product retail at those events, among other things. I have worked as a small business consultant before for many years so I am very qualified for the position as well as well aware of the amount of work it will take. She cannot afford to pay a salary, but would require at least a 30 hr/week plus commitment from me - virtually around the clock, considering the numerous calls we already have just as a salesperson.
    In lieu of salary/hourly wage she has proposed a 50% commission on my sales. While on the surface this seems equitable, my concern is that my job responsibilities would be heavy in back office work, but my compensation would be contingent on the much less frequent selling opportunities like trade shows, conventions, gno's etc. I would no longer be out in the field selling wholesale accounts. There is no guarantee that the items will sell well or not. Based on the data I already have I would not be able to make my typical rate I would charge for the business services which is around $25-30/hr. The average sales thus far for the small events we have done are 1 -5 items, avg. sale $45. We expect to do much better at the larger events but again we have not done one yet, and even still they are seldom - maybe 1 a month. As a rep now I get 30% on retail, 15% on wholesale.

    My question is under the circumstances I would like to provide her with a counter that is win-win. I love what I'm doing, and would love to help her build her business but not to the demise of selling myself short. I have considered a few arrangements such as deferred payment, overall profit sharing (small ownership in company), hourly and commission, but just need some feedback, because the 50% commission seems very risky for me, and not very risky for her. After all she's getting her business managed and I still have to drive the sales in another area/function to get paid with no guarantee how much - seems like double the work for me???
    Please reply with comments or your perspective or advice on the matter as soon as possible. It would be greatly appreciated!
     
  2. sachac

    sachac
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    Level with her and express her concerns. You are her top salesperson and employer wants to lose such a precious asset. She knows that someone with your record will have employment options. Let her know what would make you most comfortable and chances are she will bend backwards to facilitate you.
     
  3. heatseeker

    heatseeker
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    That is very hard situation for her and you. If you think that the business you are into goes longterm and have a good future, then at least you have to all the hardwork. It is all how you think about it, but I think if there are other better opportunities then you could consider to re-consider that work again.

    Good Luck mate!
     
  4. Fergal

    Fergal
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    Welcome to Business Advice Forum tamiclay. It seems unusual that your boss would expect you to work in an admin position without getting paid for it. It's not uncommon for someone to work in sales on a commission only basis, this kind of arrangement is suited to sales, because if you sell, you get paid. However, based on what you are saying, no matter how well you do that admin work, you have no chance of getting paid for it.

    If I'm reading it right it would appear that you are being asked to work for 30 hours plus per week, just so that you can spend other time working on a commission only basis. On the face of it this would appear to be unfair and not a very good deal for you.

    Unfortunately job opportunities are limited at the moment and many people have to take jobs that they are not happy with, in order to have any employment at all. What other opportunities are available to you? If you leave your present position can you secure employment or other income from elsewhere?

    Are you confident that your current employer is financially stable and that you will actually receive all your commission for the sales you make?
     
  5. tamiclay

    tamiclay
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    As it stands I talked with her and expressed my concerns. She countered her own offer with an offer to give me 2% ownership in the company, and I countered for that and the 50% commission on my sales. I thought it was a good deal, but considered asking her for 3% but decided not to. She has another partner with marketing expertise that got the same 2% deal. In talking with some friends they thought it was a nice deal but maybe could have been more like 5%. My feeling is that we also discussed down the line me getting a salary once the company can pay - which I would know since I'll be in charge of the books - and that would be in addition to the 2% and it could possibly replace the 50% commission though but is negotiable. My concern is not so much to have a chunk in the company as much as to guarantee I have some recourse in the area of payment for the work I'll be doing. And I think I stand to do pretty well with the 50% deal, especially if the numbers come out well with the trade shows/conferences.
    Thanks for your feedback everyone!
     
  6. iketz0

    iketz0
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    This is really a very hard situation for you also in her. I think if you can see that this business will succeed and go further, I think you need to be patient and industrious. It is all how you think about it, but I think if there are other better opportunities then you could consider to re-consider that work again.
     
  7. Fergal

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    Well done tamiclay, glad to hear that it worked out for you and you sound much happier about the situation now. Good luck in the role it sounds like a great learning experience, that will stand to you for the future.
     
  8. johndale

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    Patience is a virtue. That's something you really have to extend. That's easy to say but hard to do but I'm sure you can able to iron things up with her and especially this situation.
     

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