Comp plans for construction sales?

by a searcher from The University of Texas at Austin - Red McCombs School of Business

4 months ago

I’m thinking of adding a sales person for a commercial and custom home construction company. We lean more toward residential now and are seeking expansion into commercial, hopefully adding a sales rep.

Does base + performance bonus employee make sense? Or is this typically a 100% commission 1099 role?

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8 comments

searcher from University of Notre Dame

I agree with Daniel's comments that a recoverable draw is common in residential. However I would add two recommendations: 1) review the structure with either HR or legal resources well-versed in compensation to avoid any surprises in the future, and 2) review your question about 1099's with similar advisors as there are specific qualifications for 1099 vs. W2 classification with significant financial risk to misclassifying. A few years ago I consulted for a lower-mid-market acquisition in construction that these two topics were a significant challenge to the business (the founders created the problems with compensation but the buyers' paid the price post-transaction).

4 months ago | like reply | 0 likes

searcher from University of Denver - Daniels College of Business

Commercial sales cycles are longer. Base + commission. I wrote a blog post on how to hire a profitable sales rep and give some examples: https://patrickdichter.com/how-to-hire-a-profitable-salesperson/

4 months ago | like reply | 2 likes

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