Commission rates for business developer role

[Natnewb]

Hello,

I have secured a position as Marketing Director/Research and Developmemt Director at my company where it has been agreed that I will paid commission for new clients that I bring in or a share of profits at the end of the year.

The company is an environmental planning company which has an annual turnover of approximately £600,000 before I started. In the first 3 months of me having started in my job I brought in fees worth £60,000 hence my request for a cut of the fee. My boss has agreed I formalise something and we can discuss. She mentioned a share of profits at the end of the year but I would prefer to have a % sooner than that as my basic salary is only 27,000K ( I have 20 years experience and good contacts). I have no idea how much to request and at what stage I should be paid. I was thinking of 15% of the fee income for new Clients and 10% of subsequent work from that same Client. but maybe this is too low? And should I be paid at the end of the project once all the fee has been paid?

Hope to hear from anyone..many thanks.

 

[Billmccallum]

Too many variables to offer advice... How much profit does the £60K generate (already assuming that 25% of your salary, plus on-costs would come off that - around £7,800).

asking for 15% would give you another £9K, which sounds quite a high fee if you expect further bonuses when customers re-order.

 

[captaincloser]

The point at which to negotiate has passed surely ? Any commission only or commission orientated person would have seen the potential of this work at the outset and negotiated on that basis. You have already accepted £27k a year to do the work. You are now doing a job for a rate you agreed.

You have accepted, it seems, a salesman's role (though you call it something else), have got into it ..achieved what you are being paid to achieve and now want to negotiate a commission on top of the salary you already agreed to do the job ?

I cannot forsee a happy ending with the additional 'rates' you are proposing. If your success continues you will double (or more) your income and I have a feeling that will not sit well at this stage...but good luck with trying.

 

[Natnewb]

[FONT=&quot]Hello,

[/FONT]
[FONT=&quot]Many thanks for your reply and sorry to take so long to reply back to you but I have been doing some more research and managed to negotiate what I consider to be not a bad deal. I am now Business Development Director with a basic salary of £36,000 with a bonus scheme which is based on meeting quarterly and annual targets on new business. [/FONT]
[FONT=&quot]For 2011 the annual target is £80,000 of new business. [/FONT]
[FONT=&quot]For each new contract valued (net of Vat) between £1000- £50,000 I will receive 3% gross . Amounts in excess of £50,000 I will receive 5% gross, with the first £50,000 paid based on 3% and the amount above £50,000 paid at 5%. [/FONT]
[FONT=&quot]Based on this, I would receive a sales bonus of £3000 if I meet my target for 2011. [/FONT]
[FONT=&quot]Quarterly targets[/FONT]
[FONT=&quot]quarterly targets are as follows:[/FONT]
[FONT=&quot]Q Apr – June = £15,000 in sales[/FONT]
[FONT=&quot]Q July – Sep = £18, 000 [/FONT]
[FONT=&quot]Q Oct – Dec = £21, 000[/FONT]
[FONT=&quot]Q Jan – Mar = £26, 000
[/FONT]


[FONT=&quot]Would be interested to know what you think but also this maybe useful information for anybody else in a similar role.
[/FONT]

 

[Strontium Dog]

Unless the new business is expected to recur every year for many years, I would question the sanity of your employer paying you nearly half of the extra gross sales revenue.

What sort of margins do they operate on that thay can afford to be so generous?

 

[TBTB]

... I would question the sanity of your employer paying you nearly half of the extra gross sales revenue...

Not sure what you're getting at here, SDog.

If your commission rises at £50k from 3% to 5%, and your target is £80k, I would have wanted extra for exceeding target - say 7%. Otherwise, why the target figure? It might just as well be £75k or £85k. Depends on profit margins of course.

 

[Chris Ashdown]

Your paid £3000 per month for bringing in extra £6600 per month, do you do anything else to justify this wage

 

[TBTB]

Isn't the base £36k for ensuring retention of the £660k p.a. turnover? We are only talking commission for new business are we not?

 

[Strontium Dog]

Isn't the base £36k for ensuring retention of the £660k p.a. turnover? We are only talking commission for new business are we not?

Where does the OP say that? He is only responsible for new stuff.

As far as I can see he is costing £36K + NIC = approx £40K, ie half of the extra gross sales generated. If the company only runs on less than 50% margins its actually LOSING money on the new sales.