| Why pay salespeople who are not motivated or | | | | the product or service increases. For instance, |
| do not make adequate sales? If your joint | | | | you may pay a commission of 10% for items |
| venture product or service depends upon | | | | valuing $0-$999, 8% for items $1,000-$4,999, |
| face-to-face or direct contact with potential | | | | 6% for items $5,000-$9,999, etc. You can |
| customers and clients, you should consider using a | | | | structure a tiered commission any way you like |
| results-based compensation system. | | | | to motivate your sales staff, and when items |
| Auto dealers do it. Real estate agents earn it. | | | | increase in value, so does the commission |
| Corporations pay brokers with it. What is it? | | | | percentage. |
| Commissions. People who meet face-to-face or | | | | Residual Commission Income - Many JV |
| talk directly with a potential lead earn their keep | | | | businesses are offering not a product but a |
| by commissions. They close a sale and enjoy | | | | continual service. Service subscriptions are the |
| commission earned. | | | | way these businesses make money. When a |
| A set salary can become un-motivational when | | | | customer subscribes, they pay a fee, usually on a |
| sales staffs realize that they still get paid | | | | monthly basis to have continual access to the |
| regardless of whether a sale is made. If you use | | | | service. The more subscriptions gathered, the |
| in-house staff, set up a motivational compensation | | | | more income your joint venture can realize. |
| system that pays them a percentage of every | | | | Salespeople can be motivated to sell subscriptions |
| sale they make. Set sales goals so that each | | | | for a residual commission fee. Every time they |
| staff has a purpose and destination to reach with | | | | sell a subscription, they receive a portion of the |
| total sales. And incorporate bonuses for meeting | | | | monthly service fee for as long as the customer |
| and exceeding goals. | | | | remains a subscriber. With this type of |
| This type of results-based compensation will | | | | result-based compensation, a salesperson may |
| ultimately bring your JV sales staff greater | | | | have unlimited income potential. |
| salaries, and ensure that you hire and retain the | | | | Bonus - Bonuses are important for sales staff to |
| best sales force available. If you prefer not to | | | | remain motivated. As well as receiving |
| have in-house staff and your JV product or | | | | compensation for each sale, a salesperson can |
| service can use an independent contractor, such | | | | earn a pre-specified bonus for meeting sales goals. |
| as a licensed broker, set up a similar | | | | A bonus could be cash, or something else of value |
| compensation system with them. | | | | such as an automobile, a Hawaiian vacation, or |
| Structure for Results-Based Compensation | | | | even stock options if your JV structure is a |
| Simple Gross Percentage - This is the easiest | | | | corporation. |
| type of results-based compensation structure. | | | | Be wary of how you pay your people to sell |
| When a salesperson makes a sale, a percentage | | | | what your JV produces. With results-based |
| of the total sale goes back to the seller. For | | | | compensation, your income grows, and you |
| instance, if one of your sales staff makes a | | | | attract the most talented and motivated sales |
| $5,000 sale with a 10% commission, they earn | | | | staff. Make sure your JV business compensation |
| $500 for that transaction. | | | | is win-win. |
| Gross percentage can be tiered as the value of | | | | |