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FAQ Tips
Excerpts from various sources as a helpful quick read!

1. Salesperson salary or commission?
2. Outgrowing a person’s capacity?
3. Due diligence?

1. Salesperson salary or commission?
I read with interest your column about paying salespeople by salary rather than commission. My question is, how do you decide on raises? I suspect you must use subjective criteria. If you based raises only on objective sales results, it seems as though you'd undermine the team concept you're striving for. -Robert

Dear Robert: You're right. Part of it is subjective. I look at the increase in overall company sales and at individual performance. Clearly one factor in evaluating individuals is the number of accounts they close, but more important to me is the way they work as a member of a team. I want to see people helping each other, not competing with each other. One of our salespeople, Patty, recently had to go out of town and asked another salesperson, David, to attend a meeting with a big account she'd been trying to land. Much to everyone's surprise, when David showed up, there were six people waiting who said they were making the final decision that day. He closed the account, and I give him full credit for that, but I also give three stars to Patty for being able to say, "I trust the people I work with to cover for me."
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2. Outgrowing a person’s capacity?
About two and a half years ago, I hired someone to be the operations manager of my courier company. He was the perfect fit for my business at the time. Now, however, the company has outgrown his ability to handle the job. He is still an asset to the team but not in his current position. I would like to keep him on the bus and move him to a different seat, so to speak. It's a tough situation. He is 33 years old and has a family. But I feel I must do something. Any advice? -Eric

Dear Eric: We all wind up in your situation sooner or later, and I agree--it's tough. You feel guilty because it's your fault. After all, you put the guy there in the first place. In the early years of my company, I tried to deal with the problem by doing what you're suggesting, but things seldom worked out the way I hoped. The issue was compensation. If I cut a guy's salary, he would be resentful and create a whole new set of problems. If I didn't cut his salary, I would become resentful, and that would get in the way of building a team. The point is that you need to think clearly and unemotionally about this situation. If you have another job on the same pay level that the guy is suited for, by all means move him over. But don't do it if his new responsibilities won't justify paying him what he's been getting up to now. It's better to let him go--for the sake of everyone concerned. If your conscience bothers you, give him a big severance package that can carry him until he finds another job.
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3. Due diligence?
I'm considering going into business as the U.S. representative of a Canadian manufacturer that provides energy-saving products for commercial facilities. I've spent a month checking out the industry, and I'm convinced that the products have money-making potential. I've also checked out the company's references, and they all seem fine. Nevertheless, I'm hesitant to move forward. I don't want to spend the next nine months developing the business and then discover I overlooked something. I've found a company that specializes in fraud investigations. For $800, it would do some additional due diligence on my behalf. Do you think I should hire this firm? -Ken

Dear Ken: Are you looking for reasons not to go ahead with this business? If so, you should have no trouble finding them without anyone else's help. It sounds to me as though you've already done your due diligence, but you're afraid of making a mistake. Let me assure you that you will definitely make mistakes in your business career. I've made more than I can count. The survivors are people who overcome their mistakes and come out stronger. Yes, the business may turn out to be a flop despite your best efforts, but that doesn't mean that the time you put into it will be wasted. Those months could turn out to be the most valuable of your business life. As for hiring other people to do additional research, I doubt they'll discover anything that you couldn't find by spending a few hours on the Internet. If you haven't done that or checked with the appropriate industry groups, by all means go ahead and do it. Then sit down and ask yourself whether this opportunity feels right. If it does, take the leap. If it doesn't, find another that feels better. But don't sit around agonizing. Your time is valuable. Even if you wind up making a mistake, the sooner you make it--and learn the appropriate lesson--the better off you'll be.
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