Let’s get ready to Throwdown!
No, I think that works.
Welcome to the show everybody. Today we are talking about the next year, right we’re kind of wrapping up 2019 about to enter in 2020 and if you are planning your year in January you’re already behind the behind the curve.
Sounds like we’re the department stores, Christmas out there and Halloween hasn’t hit yet, but I but I like the way you’re thinking. You know you got to be ahead of the game right.
Pulling back the curtain a little bit we do record these a little bit out of out of out of order. So now here this a couple of weeks, but.
But I know it’s a good topic. Yeah, I mean, if you’re not getting ready for next year now, you’re late.
Man. It’s crazy. I thought we agreed on this topic before we turned the mics on.
We did, we did go man go.
So planning, right forecasting, setting goals, all of this stuff and if you’re waiting until January, like I said, You’re already kind of behind. And since most people have got some cyclical nature to their business, meaning that they’re slower. Nannette and Al, not so much, because you guys go crazy from pretty much like Halloween on. Clint with his new role. I’m really curious to see, you know, how he’s gonna be doing some goal setting. I’ve got some goals for myself and everything else like that. So let’s talk a little bit about Nannette and Al first, because when you guys I mean, November December is crazy. I mean, when I worked with you, it was you party all night because there’s all these Christmas parties, all these holiday parties, and then you show up super early, the next I mean, it’s early, normal. Anyway, because these doctors like to cut early because they want to get a bunch of stuff in. So normally it’s like a five 5am show up time, but around the holidays, it’s like three, you know? So when do you guys plan? How much time do you spend doing that? All that stuff?
Well, in health care because deductibles and out of pockets being met any you know, the money that most people going to spend a lot of big ticket items usually come at the end of the year, because people don’t want to spend that money again to prep for the next year. Anyway, bringing everybody up to speed. So we burn the candle at both ends. And it’s assholes and elbows. I mean, there’s not much planning because we’re on other people’s schedule.
I don’t know what that means. You don’t need to explain but for me, that just means you know, you just it’s fun. You don’t care you’re when you’re in it, you’re just loving it. So it’s…
No, I if I gave the wrong impression it is it’s our money time. It is where we’re we are going to make probably the same amount of money as we may have made for the prior year before.
So 50% of your year is in the last two months. Oh absolutely it is. That’s crazy.
Yeah, I mean, maybe not 50 but it’s it’s 40% of our year.
I love how you talk about big ticket purchases like it’s some kind of Black Friday sale I can get it. Here it is I can get the 65 inch TV or or get this disk pulled out
the patient has met their deductible, so that you know it’s not like
so the cash cow is ripe. Sorry to put it that way guys, but in a business sense. People stall I mean, you know, you deal with pain you deal with discomfort. And and I hopefully other industries experience a little bit of this where it’s on your budget, you you’ve you’ve got the expenditures or money’s left over. So I’d say look at the end of the year is who’s closing out there wants to spend some money that still has a little bit of a budget left. So I think I see a few head nods here. And so I say you, you know, you wrap that into what you’re currently doing and know where you are in that cycle, like you said, whatever that may be for you.
You’re in the last quarter, and you may be the first quarter you’re thinking, you know, I’m going to save, that may be careful with my money. By the end of the you either now you have no money left or you have an abundance, you’re like, I don’t go let’s let’s do something I need to do.
Because a lot of businesses also being a business owner, you speak from a tax implication, right, whatever is sitting on your balance sheet, unless you have accrued costs and some other, you know, whiz bang accounting kind of methods, you know, particularly at the medium business range, or guys that are, you know, I mean, I would say even up to about 20 million, they’re going to be sitting with some cash on their balance sheet sometimes. Yeah. And they want to use that effectively so that they get the tax you know, they get to use it against what they’ve made this year, knowing that January January 1, he hit a new cycle. So you’re, you’re you’re stalling, you’re spending, but then you recoup it almost immediately in January, just getting it off your books one month versus the other. So keep that in mind, guys when you’re out there selling.
So does that mean that you guys wait until January to kind of sit down and figure out like, okay, here’s the goal for this year. I mean, how granular do you get with Nannette, who’s on your team and the other people on your team about and to be very honest, you’ve got a lot of different irons in the fire and stuff. So how granular do you get around your goal?
They’re all healthcare. What happens is everybody’s worn out at the end of the year. I mean, everybody, I mean from the frontline guys that are portable venturi run on up to, you know, the spine and neurosurgeons that we deal with. So knowing that we usually take a little bit of a breather, but we have Medicare isn’t on the same cycle as most private insurances. So we we stage in and we have this fold over that goes into January for people that aren’t meeting high deductibles, which are usually your federal programs. So at the end, it gets so tight with hospital space and being able to see patients, that we push that out. So then we have another month of you know, it’s pretty steady through February. It’s really looking at the middle of February going into March where we begin to shake the weeds or figure out due to our downtime, where we, who we need to be in front of who we who we saw being very busy and very active. And they’re sort of the king of the hill at the you know, the February mark.
So you’re kind of like sleuthing during?
Oh absolutely. Who’s rocking and rolling, who’s crushing it, who’s, you know, who’s wiping out their reps? You know, because they’re so busy. Who are you seeing? And we work with some busy guys. That’s, you know, you’re just there all the time? No, yeah.
75% of the people that are listening to this probably aren’t in the medical field you’re wondering you know why why the dissertation, why are we going on. Well it’s just an example of you need to know your goal, you need to know your you know make a plan. Now with Clint what probably the end of the year do, you want to kind of talk about…
Yeah, do you guys slow down, are you guys super busy?
It’s the exact opposite everything you guys just said.
Exactly that that’s my point.
I’m in the wrong damn business.
So you talk about you know a lot of the year money in the industry is in these last few months you know people have some money spend their deductibles are are gone so they’re able…
cafeteria plans the whole nine yards. Yeah,
So for us and construction it’s it’s the opposite. Most people are out of budget in October and they don’t know how the hell they’re going to get through November December gotcha. just maintaining their own facilities, let alone putting new money into projects right. And also the holiday stuff too. So a lot of my you know, we’ve talked about this a lot. My my lead times on My Projects are six, seven months, sometimes a year. So what happens and I’m already seeing it right now as well, let’s just go ahead and get that budget put together for January, you know, when we all get back from the holidays, and we all settle back in so people already have the mindset in early October that we’re not going to push more into this project until he, but we need the budget today. So we can go ask for money in January, but we’re not going to do it this year. And that’s really hard, right? So I put I’m putting effort into stuff that it’s great. It’s going to happen on the backlog side backlog. That’s right. However, I gotta burn revenue to keep payroll going this year. And and I got guys, you know, in construction, that’s the hard this is the hard part about balancing sales versus construction. The actual build outs right, is that I’ve got a whole bunch of guys in the field building all the stuff that you’re selling. And if you don’t keep them fed and keep them busy, they go somewhere else, right? So you got to figure out how to balance that scale of keeping those guys busy. Even in the slow, the slowest of the slow. So, you know, truly I like to think of my year as a nine and a half to 10 month a year. Okay. And I kind of plan that way and everything that falls in November December is fantastic. It’s bonus, right? Yeah. I just can’t. It’s it’s really hard to forecast November, December, January. Because once again, January is back into that. All right, we’re all back in from the holidays. We’re all back in on vacation. Let’s sit down and now you’re not closing the job till maybe February March. Right? Because you’re talking about in January. So that’s, that’s a that’s a tough thing for me. And right now we’re going through all this financial data, what what kind of markets are we looking to, you know, branch out into? Or do we want to keep chasing the same stuff or, you know, the opportunities that we had in 2019 and 18. Are they still there in 2020? Are we going to have to make that up.
But bring our listeners up to speed For those who are just joining us. Clint just assumed a new position out of out of town, which we commend him for making the effort to get here to do these things. So bring it. So is that different than what you were doing in the past?
It’s just a different responsibility right? So before it was a dedicated sales role for business development in a similar industry. Now it’s a vice president job of pre construction so you got…
Say that again, Vice President.
Title drop in.
Man, his penis drop down.
All the differences, the differences now is that, you know, not only do you have to make sure that that sales is rocking and rolling and you’re maintaining that but you’re also you’re keeping the field happy and going on the construction side. So it’s, it’s a it’s a very different role, but so far, so good.
So you got to load everything up in that in that first 10 months and then just kind of coast on on the backlog.
Yeah, that’s That’s the so as a matter of fact, we were just going through this this morning. And right now we’re, we’re not trying to bring anything new in. Like I said, if it does, it’s a bonus, but we’re burning backlog to get us through the revenue side and payroll side of the rest of the year. And if anything comes in and burns and by burn, I mean, you’ve thought it you’ve sold it, you are actually doing it and you’re getting paid on that. That’s what I mean by burn, right? So if you’re burning it right in the next few months, it’s a it’s a bonus.
Okay. Interesting. My my, my years a lot like Clint’s, right? I mean, first no one gets out of bed and is thinking you know what, I need to hire someone to come in and overhaul our CRM. Like is they’re putting the Christmas ornament. Exactly.
They’re putting the Christmas ornaments up. So honey, hand me some tinsel.
Yeah. Exactly. So no one is planning to work with me at all right? And so then when I’m trying to, you know, network and call and have conversations at the last word of the year oh yeah that can wait that can wait. I can wait. It’s like well, okay.
I’ve already started hearing that.
I really want to wait till well not in surgery, in other medical stuff we do.
You have frontline stuff.
Implementing programs. Why don’t we wait until the first year, I’m like yeah.
So yeah they do tend to shoot you know we we do get some some of our projects shelved.
Just crazy how that such a marker for everything but I mean it is so
Well, I mean, you work your ass off and then it’s holiday season and then parties and Thanksgiving. I mean, it’s crazy. Yeah, that’s a slow roll. So the hard part about that though, is I think that most people kind of figure out a goal. They say, Okay, cool. I’m going to do for the sake of just really easy math. You know, I’m going to do you know, 100k this year in sales, right? And so that’s 10k January 10k, in February, 10k in March. And they don’t really do any kind of appreciation around for, like good months versus bad months. And because because they’re not really tracking anything. And that’s going to be a whole other episode eventually. But, you know, they’re just kind of oh, this is where I should be for this month. But if you’re, you know, collecting that data and looking at it, then you can really get pretty granular because one time, Clint and I were talking about it, and he was showing me, okay, cool. We’re going to do like three or four here, but only to here, right? Because you and I were talking about how you were kind of setting your goals and planning. And you were getting really granular, which was super impressive, because that’s not normal for a D around getting into the details around. Here’s what we can expect in March versus April and February, right. The two months on the other side were slower.
Correct. Yeah. And I kind of do a you know, in, in the construction world, you would we have like a man, it’s called a manpower curve. Right. And you guys could if you had if you had a big staff, right, you would have to you want to try to keep that As a smooth of a curve, if you can picture a graph as possibly the one big peaks and valleys, right same in our sales, right? We want a nice steady curve. So we can forecast forecast project and with with those jobs and that all comes from past data and I think we’re I think we’re it’s really neat for me to go back into what you’re talking about where it’s not natural as a D to do that, is…
It’s also not natural for a D to say neat, I’ve never heard you say neat. Neat?
He’s been in the car for like four hours,
Used up all my cuss words in Houston. But, you know, I’m figuring out that I don’t necessarily have to go I was scared of data, because I was scared that I have to go do the data, I have to go make all the data. What I found out is that if you start asking people like especially your accountant side, your managers, your project managers or, you know, individual leaders in their in their groups, they have all that data. They have to have In order to do their job, right, so it’s not for me, it’s not necessarily creating it all. It’s gathering it all and then organizing it into into what I need. Yep. And that, that to me is super. It is it is. It’s the best way I know how to forecast those, those downsides of the sales cycle.
Well, I think there’s so much tech out there now that tracking is not nearly the labor intensive thing that it was once upon a time, right. I mean, with…
Even if it’s in Excel.
Exactly. Right. But I mean, I mean, I mean, invoicing software is pretty great. CRM is a pretty great, you know, I mean, so you can track all this stuff fairly easily. But what happens is that a lot of sales people don’t want to be tracked. Right?
Well yeah, nobody does.
All right, but stop for one second.
Well, I’m sorry.
No, I have a point here. Okay. You don’t want to you want to get your bank statement from January December lay it out on a table, just your personal bank statement which you made. Fuck what you spent and look at your income. And then you decide that’s a motivator for sure. Yeah, you decide if you see a slump. I understand the money thing. But if you see a slump, if you’re looking at performance, then look at your commission check. If you’re not on commission.
That’s a problem in and of itself, right?
Oh, I disagree.
Well, I’m not against there’s certain levels where but if you’re not getting a slice of the pie, if there’s not a bonus attached, I’m not talking about base. If you’re not highly motivated by the grease you get off the top of being successful, then, you know, you may be wasting your talent where you’re at.
Can you remember that you said bonus.
Baby every day is a bonus at my office.
So hold on a second, though. So let’s back up and talk a little bit more about that because this was not the intended topic. But I think that this is really interesting because I don’t get motivated by money at all right. So If you were to sat me down or to sit me down, and we look through all my bank statements and how much money I made and stuff like that, that’s not going to make me go out and work harder. Right?So…
But it’ll, it but it may show you the cycle that you’re on either personally or professionally, meaning I fucked off during the summer months because it was nice and warm, and nobody was watching my back. And so I walked in, I drank a bunch of wine I said, on a bunch of patios went cool places, but I didn’t make much money. I’m just saying, for me, I look at that. And I that’s real barometer for how hard I’ve been working.
To what you’re saying I can totally relate and maybe that’s the C/S, but I remember my boss earlier in my life. No, not No, I wasn’t. I wasn’t Al. It wasn’t, one of my other bosses and he used to call me go you’re not gonna believe what you’re making this month. And I didn’t want to know the dollar amount. I wanted to know…
And I never do that. That’s a no but go ahead, you just get your check, you should be working that hard.
But what I’m saying is, I wanted to know, not that I did well, because of the amount that I was going to put in my checking account. I wanted to know who did who, you know, who who fulfilled their commitment to me, you know, that was like really big to me. You know, I was successful, where that’s what I wanted to do.
Well, I think one thing that’s super important to think about is that normally, the money motivated people rise to the top. Right, because they are so many motivated, they’re, they’re motivated by winning, you know, Clint, as he talks about winning on a fairly regular basis, but hold on, hold on there. So then you get into the dangerous realm of just assuming that everybody’s motivated by money, right? So you can be a sales manager and be like, hey, you don’t want to make more money. And if that person is not motivated by money, you’re you’re speaking on deaf ears. Now. A minute ago Clint had kind of something to say around kind of being it’s that it sounds like you’re being anti commission. Talk a little more about that, I want to hear about that.
I’m trying to figure out how…
Maybe that’s just personally.
hopefully my sales team doesn’t listen to this.
I will tell you that as a salesperson what I see and I saw in myself is that when I’m starving and things aren’t going the right way for me in the sales cycle, or I’m new, right? I come into a new company and start with a new customer base new market or whatever. I’m starving and for some personalities I would think that no sitting here on this panel it’s a huge motivator for Dr. Like you’re putting all the faith in me to go earn earn earn, I’ll do that but he’s cut from that cloth. Right? And we can go back to him being a parking valet. Right.
Oh, go fuck yourself. I’m sorry. Was in charge of parking valet. Small nuance, but nonetheless.
What do you what do you call it?
The bellman, that’s what I was searching for that I just remember the story about flipping a coin flipping the coin. But anyway the point of it is is that you know that’s to doc that’s a motivator to go earn some extra scratch you know, like he can he can wheel and deal and he can he can earn his keep that day. Yeah, for a lot of people. It’s a stressor and it’s a huge stress right and then what I… grow a pair, man. Well, maybe but I will tell you this and in the construction side, the hungry starving salesperson brings in shit jobs.
And that happens across the board. Sure, Okay.
Yeah, I would think, you can’t be desperate.
So now we’re already in a slump and now you bring me bad work. Now you bring them a bad work and then my performance in the field. Now we got a bad reputation in the field. You know, it compounds really quickly.
They just need a lean-to, two by fours. I think when you go to Lowes, and we could get this figured out.
Yeah, well, they spend less time qualifying they spend less time doing all the things that they need to do to make their slump go away, because they need to they need to survive. Absolutely. And so I see that in construction I, I saw that in myself in the very beginning and, and what what triggered the, you know, the other side of it for me was really digging into the qualification steps and saying, Okay, I’m working really hard at trying to chase 50 jobs right now what if I focused on three or four, they’re really qualified, and I know they’re going to win. And I put all my effort into those three or four. That’s how I got myself out of that slump. But I’m very task driven. Yeah, so that works. For me. It wasn’t about money. It was about I got to get some wins in the win column, because all I see is red and I’m failing. And I don’t do well with failure. Yeah, and for some people winning is money. It kind of goes hand in hand. Really. If you’re winning jobs, everyone in sales, you’re getting paid. Okay? So what I’m saying is like, or do you look at money as the win or do you look at when to get the money? Oh, Potato Potato. I think that you’re still looking at the success. To motivate you?
Well, I think I think there’s something to be said about, like how you frame your frame your success, right? Which is kind of what you’re saying, like whether, whether you sell the deal, you make the money, and that’s okay. Or you’re just looking at the money and then that that is your own version of success, and that’s okay. But going back to the thing you’re talking about a moment ago, you know, there is that point to where that that that hunger is unhealthy, right. And then when you combine that with the fact that most people don’t walk into a job on the first day, knowing what a really good fit looks like, so they just start trying to bring in anybody can fog a mirror and has a wallet, and that becomes its own set of problems and everything else. So, yeah.
I like the I’m a big fan of handing it back on the performance side at the end of the year, sharing that wealth. Okay. So if you’re bringing me good qualified jobs, and the reason that we’re doing so well, actually doing the projects and the construction to be specific Because you brought in some really bad ass jobs, right? You brought in, they got good margins on there. You know you had a good customer to deal with you vetted all that stuff out so that it was a successful matchup for our company. You brought that in, I’ll pay you all year long. A good salary did not make you starve to do that. And then if we all are successful, at the end of the year, there should be a big fat chunk of money in there to divvy out. That’s my goal, versus trying to make it win every month for everybody.
So I have a question. So do your people know what percentage of that big fat chunk of money they get, is built into what you know, they’re they’re known contract? Yeah, so…
I mean, you gotta set expectations around that kind of stuff, I think.
So, so, yeah, you do. So for example, if I sell a $2 million job at a certain margin, most commission based in the construction world are on a scale, right? You sell at a 20% margin. You get this commission you sell it at 18%. You get this a little bit less, right. It goes down the scale, and then there gets to a point where we’re covering cost and you don’t get paid anything for bringing that job. And what I don’t like about the the big commission push in this world is that, well, I’m starving, so I’m going to drop all the margin out of it because I gotta sell it. Right so you drop all the profitability out of it for the company, gaining revenue and pay and payroll.
But that’s a good way of doing that right like you get your commission based upon the margin you sell it at so not not like a not like a widget based commission. So like you make $50 per deal or…
Yeah but check this out. You’re taking the the wind out of the company, and you’re putting the wind in the person, just his own personal bank account. So instead of him making a really good, let’s say, $6,000 bonus on that job, because he really vetted he put his time and he wasn’t stressed about money. Now he’s selling at the lowest level, and he’s making 600 bucks because the dude needs 600 bucks. That month, right. Yeah, right. But that doesn’t do anything for the big picture of the company. grow to forecast to do all this stuff. I mean, everything we’re talking about is really based on what those sales people are bringing into you. Right? You can’t do any of the other stuff without that.
Well, yeah, you know, and I think we’ve talked about this on another episode. But I mean, that stigma of the sales guy sells anything to close the deal. And then it’s left to the back office to like figuring out the hell out later on. And then everyone hates the sales guys, because they’re bringing bad deals. Yeah. How do you. But if you’re not making the same amount of money at 15% margin versus 20% margin, doesn’t that keep that from happening? At on some level?
Yeah, I don’t know. I mean, the money’s got to be there and the job to pay your I mean, because it’s all skills out, right? Sure. I mean, if you’re not selling the job at the big percentages, then I can’t give you a big lump sum of money because this is not there. You cut it all out. And I’m not gonna let you sell a huge job and then pay you like it’s the lowest job either. So that’s why I like that scale right.
No, I love that.
But, you know, I have a feeling that everybody out there listening is going to be taking this episode into their boss and be like you mean listen to this episode.
Might not get what you want, but do it.
So in your opinion, if I’m hearing you correctly, you get a larger base to kind of kind of cover your bills and everything else like this. And then at the end of the year, you get kind of a profit sharing bonus. If you’re successful in the company’s winning. I like that model. Yes. So let’s talk about that a little bit. Because a lot of people believe that if you don’t pay people commission, then they’re not going to work as sales people and I’ve seen…
That’s a really stupid thing in my book.
I agree, it is stupid.
We’re all salespeople, which is funny because
Let’s just put you on salary.
That I will agree to.
So it’s got to be healthy, right? Yeah. In order for the theory to work, it’s got to be healthy. So that the guys not saying starving. Yeah, it’s gonna get him out of that, but he’s not gonna have a big win. So, you know, what’s the average age of a salesperson out there? You know, probably in the mid 30’s to 40’s.
Yeah, I think it’s higher than that. Ah,
I don’t we well, what was your low end?
I would say it’s probably even a little bit lower than that.
Okay, so So now you’re talking about a bunch of young starting out families that are probably neither one of them have great big paying jobs. And you’re pumping out kids and you want to buy the new house and car.
I hate the cliche of you get what you pay for. You know, I mean, really? Absolutely. Well,
see, that’s the thing that was like if you fire that sales guy, let’s go find another one.
That’s your mentality
because but that’s also usually the same people that are willing to pay 100% commissions to people
Of course they are.
That’s the same people.
Well, no, but that’s not saying those are some churn and burn industry.
right but they’re in my industry, but I know there are new guys,
but I can tell you get there guys in health. Right, the sales, you know, medical sales that they get lazy at 250. Right? Sure. I mean because they’re, they’re out there crushing it and it’s all straight commission and there’s a certain liberation into your schedule when you can work for a very large company and tell them to go f themselves. replace me if you think you can. Yeah, I love that. There’s that said superstar Welcome to the pinnacle. I mean Mount Everest of f-ing sales.
I love whenever Al’s more of a D than an I. Today’s one of those days. Oh, sorry. No, no, it’s okay.
This funky liquor that our producer fed me earlier.
God we did try a little bit of…
We didn’t y’all did.
Yeah. Clint. abstained, like a smart adult. You didn’t have any other. So it was just me and Paul and Al and we had uh all this good stuff. What was it called?
Good old absinthe. Good old absinthe.
Thank you Team P, Team P.
I adulted did really well today.
Yeah, man, it was terrible. It was like the worst black licorice ever. So. Okay, so going back to that though, right? I’ve worked with a ton of teams, right and ton of small organizations to where inherently there’s less trust for the salespeople, right? Oh, yeah, the developers are great. You know, these other people are great. But the salespeople, I got to keep a close eye on them. So we’re going to make sure that they’re getting, I don’t really understand why I think that the only reason why that happens is because they’re only measuring the lag. They’re not measuring into the leading indicators at all. And so they’re just looking at what have you done for me lately? Yeah. Well, the other saying that’s the office staff. Well, I’m saying that that that’s what the owners typically Oh, right. So they’re just looking at so the guys sitting in the office exactly right.
so the funny thing is, is and I say this a lot in in, in the construction companies that have worked for us. We are a construction company first are not an accounting firm that does construction. We’re not a HR company that does construction work, we’re construction that has an HR company. And so if you started a company with one person, let’s say in construction, you started with yourself, and a welding machine and a truck and you went out there. And you just said, You know what, I’m going to go do this for myself, and I’m gonna get it. What’s the first thing you had to do? Sell a job. Yeah, yeah. Correct.
I mean, how many companies have to you, if you don’t have sales, and you had to sell, you have nothing.
to sell profitable job, and you had to sell a job that you could perform? Yeah, you had to do that. Right. But the funny thing is, is I think it gets lost as you build a corporation, you get to that 30, 40 million dollar mark.
You get the bean counters in there that are saying, but this is this…
We’re paying this guy. We’re paying this guy 150 grand. What’s he doing for us? Well, he’s fronting the entire company’s book of work.
I look back, and I say, and they’re paying you for what?
That’s exactly right. So that’s where…
Come on bitch, let’s go, let’s go to the mat.
So that’s why I say that is that we’re not an accounting firm that does construction.
I like how you built that.
so that’s where I just go back to it begins with sales, right? Nobody, you know everybody in the field like, well, you couldn’t have you couldn’t have done it without me in the field. True, but you wouldn’t have had anything to do if you didn’t suffer.
So here’s a little note to everybody out there that’s working really hard selling a lot when they want your paperwork turned in. Okay, they want it but you don’t have to give it till you’re fucking ready to give it to them. Make them sweat in the month, make him sweat send it the day of. Boom!
Give them a letter of resignation. That’s my paperwork.
No, I don’t say that. I’m saying you know you got an accountability and stuff like that. You’re out there grinding the streets and you got some, you know, five phone calls into month into month into month get your PO’s get your PO’s I’m like they’re coming at five o’clock. I don’t know what you guys are going to do with them. But I know my date stamp says they got delivered. stories for notorious for it, do it, do it, it’ll make you a legend. Well, the funny you know,
for all the wrong reasons, but to do and, you know, the interesting thing is that you, you, you start with the sales person and they sell a bunch of stuff and you start having success and then well you put those guys on the back burner right you forget where that comes from. And, and now all of a sudden you’re looking at the accountant comes to you and says, Are overheads getting high? And we’re paying, we’re paying these sales guys.
Yeah, you know, collectively, let’s limit the Commission’s I know so many people that Yep. And I’ve never understood this. It’s never made any sense to me. But they say, Well, once you make a certain amount of money, we’re going to decelerate you or we’re going to start paying you….
Are they crazy?
I don’t get it. I don’t understand. But
Guy like me. If you if you think
you’re the only way if you think that the only way that salespeople are going to go out and work is if you pay them commission and pay them for the work that they bring in. And then you’re going to limit like, those two things don’t make sense in the same world. My opinion.
So I got a, I got a funny little story about that a coworker of mine a couple years ago, had the best story in this little realm. They were talking about what happened was one of the C level guys said, those guys, those sales guys will never make more than I’ll make. And we heard about it. We heard him say that. It was like, you know, just demotivated, like screw that guy. Screw this whole company. I’m not working for these guys and definitely not gonna sell good ones. So that’s my reaction. The other guy’s a super I. So he likes to go have fun with this. You know, he goes in there and he says, Hey, I got a scenario. I want you to hear me. I have a friend of mine. He’s got a huge job. We’re going to sell this thing like 30% It’s a $10 million job. All he’s asking for is like 20 grand. Would you just write him a check for 20 grand, he’ll hand this whole job off to us? And let’s see C level goes like, hell yeah, that’s a no brainer. He said so why would you only pay me eight on that. But right you’re willing to cut a check to a perfect stranger that you don’t even know because you’re hungry. But you wouldn’t give it to your own sales guy because you forgot where you came from.
There’s a guy that we all know. And he is working in a packaging and distributing right to kind of keep things…
Leonitus. Sure. Exactly. And, um, last one he looks, it looks like there was a,
There was a, there’s multiple owners and one of the owners who doesn’t have anything to do with the sales people or anything else just back office, he manages kind of the warehouse. He’s like, you know what, we don’t even need the salespeople. Let’s just get rid of all of them. I’ll handle all these bids. I’ll just tell them how much it costs. This money will come in now. Our friend has got a $4 million book of business, right? He’s doing $4 million of business through this company and this one guy who has just he’s just so out of touch with what the sales people are doing. He just thinks you know what we can aspire all these guys and this is going to be totally fine. How do you get anywhere close to that level of I guess, success? Maybe Is that the right word?
Well he forgot what the processes right? That those salespeople are out there, creating relationships and getting people to ask you to build those jobs, right? So then you get busy business like these are coming in every day, what do I need to pay those guys for? But you cut those people off your staff, and in three or four months or three weeks, you’re not getting those bids any more.
So you you don’t know. I mean, literally over the, I don’t know, 15 years, 12-15 years and even before that, and healthcare with some of the other vendors because I was on frontline care. I had sales reps call me and say, Hey, I think I’m about to be let go. And I’m like, What are you worried about? And they’re like, Well, you know, I’m like, you own the business. The business you work for? I haven’t met one of your clients. Your client wouldn’t like, answer the phone. I said, you take your shit. Put it in a bag and walk next door. And if you need help call me because I know a bunch of people want you. So at the end of the day, it’s either your business or it’s not because it’s not the company’s business, not in my world.
So I want to back up a little bit to something that we’ve been talking about, because, you know, you were talking about the fact of, you know, kind of getting a fixed salary and then getting a portion of the profit at the end of it, you know, kind of profit sharing.
I mean, if you want to incentivize people to do to get paid on doing more than what they’re already paid to do. That’s the way I would like to do it right when the company is super profitable, and we’re making some extra scratch on the back end, let’s divvy that out where it belongs right? No, I agree with it. Now, knowing that…
Does everybody get the same cut?
No, no, they don’t know it’s about the role and what they do. There’s a scale there’s there’s levels right? interest level one through.
funny how when you become a VP, out of your mouth.
Individual producer to manager.
Square that for me g
Well, I will tell you that I had the same thought six months ago. Just nobody listened to me about how these things should happen. I’ve always you know, when I first started with the previous company, I walked in and I said, I want 120 grand a year. I don’t want I don’t want your stupid bonus structure. I don’t want your commissions I want 120 grand a year, because that’s what my family needs to live. That’s, that’s my number. I don’t care to make any more of that I’m trying to get three kids through school and plan and project and do all the things that we’re talking about that you do for the forecast. I’m trying to do that in my own checking account right right and I need that number to do and live comfortably right. So that’s that’s what I needed and I just asked for that. And I heard the the dying words of I would never pay sales guy that. Okay, well, you need to check out, you need to check out our bonus structure because our Commission’s are get you to three, four or 500 grand a year.
That sounds like multi level marketing. Oh, my God, like flying jet.
So you know,
Nothing against that.
Right then and there, you know, I just ran some scenarios with the scale and I said, Okay, so, you know, we’re about 100 million dollar company I can, you know, literally my group, I can only sell about 20 because that’s what my group is going to do next year.
So you’re a quarter, you’re a fifth of sales?
Well, old company. Yeah, I was. So they only want to give you 120 No, but hear me out. So it was like, I can only sell enough for my group anyway, I couldn’t sell for the other group. And so 25 million at the highest scale only gets me like 60 grand a year. On the commission side. So your little you could make whatever you want. You can make five 600,000. Okay, the company is going to the company’s going to have to be a $700 million dollar company for me to do that. Yeah, agree. And I’m not saying I’m not here to math. I’m not saying I’m not here to help you do that. That’s exactly why I’m here to get you to the 700 million but we’re not there today. We can reevaluate this every year if you want but this year this is what I need and this doesn’t make me hungry this makes me motivated to come to work and kill it for you. That’s me as a high D that’s what I need. Right everything’s back home is taken care of. Yeah, that shits locked down tight. My family’s taken care of now I come to work and I’ll kill it forget. I don’t care what the hours are. I don’t care what I’m doing. That’s me personally. Right? And when the first first month right, I got zero sales got zero customers, and I’m making a shit salary. Now I’m now I’m angry pissed. My whole family’s starving. I mean, that’s not a situation I ever want to be in again right now for sure. And we, but the thing is, is industry standard for salespeople is to put them all in that right off the bat. Yeah, it kills. Well, that’s what I’m talking about.
So, that brings up an important, you know, topic here is look at your contracts guys, and do the math. Kind of like clean I like Clint said to see whether this is you know, you know, smoke and mirrors on on the on the bonus or the commission side and evaluate the size of your company because it makes a big deal, particularly given the fact that if you’re very, you know, you’re you’re good at what you do highly motivated, but you go to a small company, they can’t support your superstardom. Right? So it’s it’s a trade off there. I mean, you go into certain companies that, you know, have a ton of potential a ton of growth, they line it out for you, they need to live up to their side of the agreement too, particularly if you’re a superstar. Now if you’re finding every reason to dislike anything, we say, we’re not talking to you So, but it’s all true. We’re talking to people that are like us that want the most for what we do and want to be fair about that. And it is a negotiation if you are a superstar, you can write your own ticket. So write it
That’s, yeah, that’s perfectly said in my book. And as you were saying that I was thinking, you know, you get big enough where you have to hire an in house accountant. That guy doesn’t come cheap. You know why? Because he manage his finances, he managed your book of money, right? When you need a check written, he’s going to tell you either have it or you don’t. And here it is. The funny thing is, is where does the money come from? And it comes from the front end sales guy. how low you may think of that guy on the totem pole. That guy the necessary evil is and yeah, very so it’s funny to me love being the necessary evil. I mean, I live in that realm every day. I love that side of it.
But I still say everyone’s in sales. It’s just, you know,
You just don’t know it.
Yeah, well, so I was working with the team the other day, and this guy has four people on a sales team. One guy kills it. He outsells everyone else combined. And so we’re talking and he’s got them very locked down. He’s got his Very old school traditional, you know? And I said, Okay, you know, what are you trying to do? And he’s like, well, I really am a little bit nervous that I’m going to lose this top performer said, okay, you should be, right. Because if you’re good in sales that gets around, right? I mean, you can lie on a resume and you can you can tell whatever stories you want in the interview room, but, you know, success kind of proliferates itself, right? You know, it speaks for itself. So, this guy was like, well, and I said, you know, have you thought about giving him more leash? Have you thought about doing these things to kind of, you know, change the culture a little bit because that’s kind of what I’m there to do. And he was like, Oh, I don’t want to do any of that. I was like, hey, this guy is going to leave eventually, right? If you keep them locked down if you’re not trusting them if you’re not, you know, doing things the right way. And it’s always like, what have you done for me lately? That guy is going to leave and then all the other guys are going to leave? right because your best salesperson to someone else’s best potential hire, right, especially in the sales role. Cuz most people are going to give, you know, if you’re killing it, they’re going to give you a longer leash. You don’t have to come in. Oh, yeah, you just keep killing it, don’t worry about it, you know, and that’s on the traditional side. So then what happens is you got the people that are doing well, and they get all this leash. And then the people that are new or struggling or something, and they’re not on a much tighter leash, and I’m, you know, presents its own own set of problems. Exactly.
I mean, what happens when the guy when your lead sales guys, let’s just say it is in his 60s, right? He’s on his last five years? Yeah, right. How do you how do you forecast that? What happens? If he retires earlier, he decides, you know what, I’m done with this. I’ve made enough scratch over the years because I’ve been killing it. I’m out. And now you’re left with let’s say three or 400 sales team that are super weak compared to that guy killing it all the time for you. For so for what I’m talking about that incentivize at the end that higher salary, in my book, that’s a perfect guy to do that for right. Hey, look, you’re at the end of your career. I don’t want to see you go anywhere, but I need you to spend the next five years Getting that portfolio of my young guys built up. So that in 2020, let’s say, if you decide to leave, they make up your book of business, the way that we know works, you’re the successful model, we need to train that. And your your day, you’re going to kill it. You’ve been in this business for 20, 30 years out there killing it every year, your years are going to repeat itself, right? You’re not having those struggling years anymore, because you have a client base, those people are going to call you to get this job done. They trust you. Those are going to come in you’re not working as hard as you were, as those young guys are right now. So but they need that knowledge. And if you leave me I’m stuck with this and they have no knowledge.
So, I just look at it from a business owners perspective. Why would you not cultivate that guy into the best exit strategy he’s ever seen? That’s what I’m saying. Yeah. And and so that I know that, you know, those guys are usually sometimes easy pickings, particularly in our business. Because they don’t get any extra love, right? And they’re like I’m about to close out. And they can take that whole book of business. That’s why I say guys Own your book of business. And then you write your own ticket. And somebody else courts them, sits on the sideline for a year against their non compete, just to take that business puts a big fatty in their pocket. They they work their relationships over to why not to keep that in house with a young stud, who, you know, or studette, you know, that’s ready to assume the throne, that he’s leaving you as a legacy and then Damn it every year, invite him to the Christmas party,
Literally had a guy this probably six or seven months ago, and he had kind of a long timer, you know, on the team and I said, Hey, you know, have you thought about what happens whenever this person leaves, you know, because they were mid 50s. And I said, you know, what are you going to do? He was like, I’m not worried about it? I said are you not worried about it? genuinely curious and he’s like, he’s making too much money, he’s never going to leave.
He’s gonna die though. There’s a finality here.
That goes back to the point that I was talking about a moment ago that if you think that everyone is motivated the same way you are, right, because you’re motivated by money. Exactly right. So he this guy was literally telling me that his top performer was never going to leave, because the money was too good. Whereas the top performer whenever I’m talking with him trying to figure out like, Hey, what are you doing that’s like so good that we can, you know, kind of spread that love amongst everybody else? He’s like, man, two more years and I’m done.
So how did you go back to the owner and sort of convey that message without blowing the other guy exactly
right. Because I know you’re honest guy. I don’t want to like screw one guy. Oh, yeah. I’m not here to betray anybody’s competences. Right. And normally, when I’m working with a team, I try to sit with the person who is killing it, right? Who do you who on your team is doing the best job because I want to go sit with them, figure out what they’re doing that maybe the other people aren’t and then try to figure out those those nuggets. And so because of that, I gotta kind of play both sides because I can’t front the other guy out of like, hey, this dude’s leaving in two years, you know, like, hey, yeah, you need to get your shit straight as this guy is out the door. And so I was just really like, Hey, are you sure? You know, how much is it? How much is he making? You know when he tells me the number and I said, Okay, you know, how long has he been making the that kind of money and he was like, oh man, probably good 10 for 10 or 15 years and he’s like, that dude can retire whenever he wants as long as he’s spending his in his you know, somewhat in check. And the guy
He’s got a coke habit, he’ll be here forever.
Guy didn’t get it in and this is close to a year ago. So this guy’s probably in his homestretch. Assuming that he hasn’t changed his mind.
Ouch, that’s like somebody’s gonna shit the bed and it won’t be the sales guy. Note to everybody out there, not the sales guy, it’s the owner bed.
You know that that’s a that’s a pretty big thing, right? But part of that comes down to planning and just being aware of And being thoughtful that, you know, I mean, and we all do that right? I’m not motivated the same way that Clint is. And I’m definitely not motivated, as evidenced by this conversation the same way that Al is. Right. I’m way more motivated by loss than I am by gain.
Let’s let’s put it this way, right? You take a let’s take one of your office staff that’s not in sales like for me, let’s take a project manager and say, Okay, here’s a 12 month million dollar job, I need you to go run. This is all you do for the next 12 months I’ve run this, but I’m not going to pay you until you close that job out and see how well you did. why you don’t think about it like that with him.
It’s the only realm, it’s the only realm that gets treated like that.
You need them to perform for the 12 months, right? Okay, maybe I misspoke. In health care, a lot of times in health care sales or you know, device, whatever it may be. You get a base until you leave that base to jump to commission, right? So you get your starter started. It but eventually it becomes how much influence how much can you gather? And it does belong to you at that point.
I mean most companies incentivize with the draw. Yeah, I hate that word.
Well I hate draw too, you get the salary. I’m not pulling it back. It doesn’t come out of your future commissions. I mean, I guess it takes you a while to learn the position and be able to sell.
I mean, let’s be frank here. I think that it takes a 12 month cycle to really get your feet, rocking and rolling. 12 months? Yeah. To come in with no customers. No, no killers will go out there and they’ll kill it for you because they’re natural killers, right but somebody that’s got a worker process never been in sales before
and some of those guys do really well. And they’re good assets because they’re not jumping job to job right? Yeah, yeah, yeah, they’re, they’re happy with their home. So you know, superstars
there’s some one offs that I’m not talking about. I’m talking about the I think the the 51, 2% of People that jump into higher than that probably is Yeah, I’m, you know, I was being pretty reserved on that. But, you know, jumping right into sales here, let’s just say you’re 23 you have no life experience job experience, you got nothing and but now you’re a salesperson because we see it out there every day right banking industry, right? I’ll see. It’s like here, throw these young guys out there.
I can tell you my story about banking if you want to hear it.
So the thing is, it’s like, you know, you put them on this draw and you put them on these, you know, incentivize plans. You know, Doc, I don’t, I don’t mind what you’re doing because you’re taking care of your people until they can take care of themselves. I get that that’s, that’s taking care of your people. And that’s what in all reality what I’m what I’m saying is you need to take care of the people that take care of you, right? And however that works for them and motivates them and, like you might have two people that do the same thing and make the same money for you that are incentivized completely different and they’re motivated, completely different. You might have two pay structures for them. That’s your agreement with them. Right? But I think to throw out a blanket, I’m going to give you 40 grand a year, and then you got to kill it.
But ok, I’ll flip this thing I can tell you about a multinational, multi billion dollar company that didn’t want to lose me at one time and was willing to let me write my own ticket. But it didn’t make any sense. And so I said, No. So guys, I’m out there to tell you they will bend the fucking rules to keep you on board. If you are a superstar. If you’re not, don’t ask because they won’t give. But if you are, it’s okay to go ahead.
Checks and balances and standards and rules in my world. I think I mean, in my own head world, as a high D is there. They’re just guidelines. They’re set in place for people to follow until to you have to do you have to deviate.
So you’re going to VP role now, right? You’ve got some sales people on your team. Let’s say that there’s some turnover You decide to bring on a new salesperson? Yep. Are you okay with the idea of like, hey, you’re not gonna make any money or you’re not gonna bring in any business, any revenue for the business for 12 months? Is that Is that how you plan for that?
I mean, that’s how I would plan for it. Really? Yeah. And I’ll tell you why. Because first of all, I’m not going to go hire a brand new sales guy ever, ever that well I gotta have a killer in the industry. So I’m probably gonna go shop out some people and find that killer in the industry. So I’m gonna pay him high to get them over there. Okay, and I’m going to get my book of business built right because
I was gonna say if you’re going to try to poach a top performer from someone else that’s what to do You got to pay the premium that’s what I’m saying right you don’t get good I’m good you don’t get good talent for to go with that because I’m filling a hole right.
Guys, you hear that he’s got some budget just figure out where he’s the VP, and send your resume to sales throwdown.com.
It would almost be on his shirt.
It’d be a damn good better be damn good resume that’s all but I don’t need you know, I don’t I mean, I have…
Somebody’s out there though guys, don’t give up. Hit Clint up, he’s hiring.
So, okay, so Al, you were you were shape nodding your head as well. And we work together and I think I work for you for 18 months, something like that. So something like that. So, now if you’re if you’re gonna hire someone tomorrow, would you still just kind of assume that theyre?
It’s six months, bare minimum? I mean, probably a year. And then we start, you know, I have my checks and balances, you know, if I’m not getting phone calls, I know things have gone silent is kind of tough on you. But I you know, it, you know, have my old saying, you know, I don’t fire people, people fire themselves, right? They just decide this isn’t for them.
Nannette, do you, do you concur with Al about that it’s six months minimum, if you’re new.
If you’re new, absolutely. Interesting. Well, you don’t have any experience. You don’t know where to go what to do.
We’re going to show you everything. Everything’s out there for your you to take. It’s just, guys, sales is not easy. Yeah, I mean, there’s a rhythm to your process and the company’s process and those all have to match up. I mean, you do have to find a fit.
So how much do you think of sales in your world? Okay, how much of that do you think is art? Yeah, sorry, Al, how much of that do you think is art versus how much of that is science? Like, what do you think that? Is it? 60/40?
Oh, I think sales is all art. There’s very little science to really, because you’re pulling on people’s wants needy.
I think I can flip that completely.
I agree with Clint.
You think it’s all science?
Well, I think it’s 90/10.
So it’s all facts?
I think it’s I don’t think No. Well known as the art of hold on building…
But the science is building good rapport with good people. That’s part of the science, right? Oh,
you’re talking about the social science that you’re talking about just the math and the equation.
I think we all would have a little bit different opinion of what science is, but my science is a process right?
Earth is flat and then if you go too far you fall off the edge. I mean, that’s what I’m talking about. Oh,
Okay, so word it differently then, it’s not science. Is it relationships or is it facts about your product?
No, don’t reword it. You said art or science,
or art or science? I’ll say it’s art art is art is completely open to interpretation. Right which which I think art sounds like traditional sales to me science sounds like process, which is what I’m obviously a huge proponent of database selling agree, right?
So I’ll tell you so in my in my industry, I’ll tell you how I flipped my my own self out of being at a really low hit ratio, starving, and couldn’t get work to save my life to work in half as much, maybe even 70% less every day, knowing that I’m just every month just hitting these crazy goals and then opping the goals and hitting those And that was all science based selling, in my opinion. I mean, it was finding good people. It was the science of finding the good people.
It’s the process. And I think that’s something we really should focus on maybe our next podcast, I think process is really important.
Hold on, these two guys are having a moment over here.
No, go ahead. I want to fit I want you to finish your statement.
I don’t even, too late now.
Cut him off, just like what were you gonna can like Russell, were we gonna say? Do you have something? No, I want to hear it. Oh, no, sorry.
Well, it’s something to throwdown. So we started out with the topic of planning and then we kind of got kind of off topic around that so
It was a good topic.
Let’s talk about either planning or, or…
I think I can tie it to, go ahead. Because it you know, so what we were talking about the last you know, 30 minutes was was all a part of planning, right? How do you plan for, you know, One, if you got that sales guy that’s out there killing and he’s on his last few years, how do you plan for that? Right? And we talked a lot about that. How do you plan to get your sales team motivated, and put them out front, and really take care of those people so that they’re bringing in good quality stuff so that your revenue shoots through the roof, your income side, right? The actual income dollars. And, like, that’s one way that’s, that’s part of planning. But the big scale of planning, going back to our original topic of forecasting sales, to me, there’s no better way because you can put any plan on paper. I kind of put it to like writing a business plan, right? You got to put a business plan to go get a loan to start a business, right? And that plan has to be locked down and you have to have facts and market study and you have to have all those things. So the bank’s going to say okay, it’s a proven, it’s a proven concept, based on past data. Here’s the money right? When you going into the next year, and you’re providing all those same things, right? You’re all right, we want to do 30 million instead of 20 million, or we want to do 100 million instead of 90 million. Well, you got to have something to prove the, you know, to proof in the pudding. Right. And for me, that’s backtracking data. That’s going back and saying, Okay, this is the market that we’ve been successful. This is how if we could do one more job, we did nine last year in this market, if we could do 10, that would put us there, because past 10 years of financial data tells us I can do that. And I also have the capacity to do it. Because I know what that looks like, from my past data. I mean, it all goes back. Right? And I think that, that this is the time when you’re forecasting the New Year, that this is the one time if you never do it any other time throughout the year. If you don’t go look at past data. This is the time you have to do.
Awesome, Al, What do you got?
Art versus science. With the LT. Without the art there is no science because without sales, you don’t have any other The data that Clint just spoke of, there’s no revenue to speak of. Somebody had an art form that they went out there and they sold something to begin the process. Now, there might have been some, some revenue put into the foundation for that process. But I, you know, and I want to go back to this topic on another episode. And anyway, yeah. I think you front with the art. And then you, like you said, you project with the science
I have nothing to say, I need to give more time to Clint.
Nothing about planning or forecasting or motivations. I mean, we covered a lot today.
I know, I was like, which topic do you want? Whatever you. So it’s kind of like for me, planning is huge. I need to know exactly where I’m going. weekly, daily, you know, Al will call me, what are you doing today? And I totally know. I think it’s You have to know what you’re doing. You can’t just haphazardly wake up and go, Well, let’s see, what am I going to do? I mean, you’re not going to be successful. If you don’t have a plan, you have to have a plan. I always I went fly fishing. I always say, I think I’ve maybe said this before. But if you’re fly fishing, you’re not looking at your pole, you’re not looking at the, you’re looking at the fly on the end of your rod, where you’re going to throw that you know where it’s going to land. You got to know where you’re going.
Alright, so for me, I think that Nannette’s point brings a lot of feel goods to my belly, right? Planning is super important, right? If you’re not planning for what’s going to be happening next year and kind of planning accordingly. You don’t know where you are. And it’s super easy as a salesperson to say, well, I close everything. Every person I sit down next year I close and that’s just not true. Right? Exactly. So you know, manage that right use the data as Clint talks about right plan, you know, plan your days. One of the things that I’m going to that I will say is, you know, figure out the lead, not not just the lag, you know, lack revenue. And close deals are a lagging indicator. But you can’t control how much you can’t make someone say yes, no matter who you think you are, how great you are, we’re never as influential as we think we are. So look at that past data. Because if it takes me 20 deals, or 20 conversations to go close two deals, If I want to close two more deals, and then you have 20 more conversations, right? The role of large numbers makes sense. So plan document, use the CRM, use some technology, and plan accordingly. Go get after it. Yeah, good show. This is kind of kind of all over the place. But this is how our how our normal conversations are. So this is good. If you’re listening and you know anyone else in sales, who might be struggling with planning or you know, how to get to where they want to be, please share this with them. We talked about a lot of stuff on here and we hope you can learn from our experiences. Follow us on YouTube. And if you want to take the assessment because you’re not sure where you are, send us an email, firstname.lastname@example.org, and we’ll get you taken care of. Thanks a lot.