*Originally published on SecuritySales.com
Considering starting an alarm company from scratch? Here are half a dozen factors to consider when bringing on potential sales candidates.
There are only a handful of ways to start a new business from scratch. One of the most personally rewarding methods is to start it on a “wing and a prayer.” In other words, “on a shoestring,” without sufficient economic backing on startup.
This is often how it’s been done throughout the years. The reason for it is simple: because not all of us want to go into debt up our ears, and most of us do not have sufficient funds to do it.
So the question is, is it possible to be successful when one does it in this manner? The short answer is yes but only if you possess the following six elements to make up for the lack of cash:
- Some tools
- Some know-how
For the first decade of my 45+ years in the security industry — beginning in 1977 — I was the owner of a one-man shop called Alarm & Communications Co. (ACC), based in Canton, Ohio.
Along with alarm systems I was able to diversify into multiple endeavors because of the formal education I received in electronics. My knowledge and skill in this area provided me with a reliable source of income as an electronic repair tech fixing hardware and electronic systems on the bench.
Even so, from the very beginning, it was I — the installer, repairman and bookkeeper — that sold every system that went in. So, I understand the everyday struggle of a small shop.
Here’s the thing, although I possessed all six of the required factors listed above, there was one more item I needed that we’re going to discuss in this blog post: a commission sales program.
The Need for Commission Sales
Like many smaller companies today, there came a point in my own company’s growth that I had to make a decision whether to hire a salesperson or to take the tool pouch off and do it myself.
I advertised in the classified section of a local newspaper and it almost always yielded a small supply of individuals who were willing to work on commission.
Most of the salesmen I hired were not truly sales oriented. I suspect that some of them were out-of-work alarm technicians who thought they’d try their hand at something new. I gave them all the alarm system sales leads that came in over the phone and I allowed them to run them on their own.
This is in stark contrast to one of the alarm companies I worked for. They had a commission salesman who worked on the residential side for over 20 years. In the early years they were loyal to him by providing him with leads that came in over the phone.
In return, he was loyal and faithful to them, right to the bitter end. I say bitter end because the last few years of his career with them they were running the house leads themselves, providing quotes over the phone and not telling him. He was eventually forced to find his own sales leads, and that led him to leave the company for a more attractive offer.
My last word on the issue of loyalty is this: if you expect loyalty and dedication from your commission sales staff, you must give loyalty to them as well. Trust and loyalty is a two-way street.
What About the Perks?
There’s a huge difference between a small alarm company and a sizable national firm with deep pockets that can hire sales managers that know the ropes. Where small companies cannot possibly afford to provide the perks that larger firms can, there are things that they can do to sweeten the pot where it comes to attracting and keeping qualified sales help.
One perk you might consider is that of providing a company vehicle. For example, the spare van out back — when it’s available — not only provides a commission salesperson with a means of transportation, sparing them the expense of using their own motor vehicle, but it also provides the company with additional public exposure by virtue of the advertisement on the side panels and/or the doors.
If the salesperson has a nice vehicle, you might provide them with a per-mile expense allowance so he can pay for gasoline as well as wear and tear. In addition, you might also provide them with a gas card to keep in their wallet or purse.
On the Security Coaching Forum on Facebook, a closed group available to security/fire company owners and managers, one of our members recently said he gives his commission salespeople a base allowance each week of $200, plus a car and a gas card.
On the commission side, the salesman’s expenses are taken out of this 15% on gross, other than the car. Of course, these kinds of perks are usually made available by larger companies because they can afford to do it. This helps them to attract and keep quality salespeople.
There are all kinds of ways to attract and keep commission salespeople, but the one thing that is for sure, in order to keep a good one you’ll have to eventually consider providing them with a perk or two.
Keeping Track of Who Does What
Another requirement when it comes to a sales force is tracking their sales efforts on a weekly basis. Where some company owners feel that doing this is a waste of their time, others know the value in doing so. Where some meet with their sales staff once a month, others meet with them weekly.
On the other hand, Russ Ackerman, author of Security System Sales Leadership and President of Proven Sales Strategies, recommends that you meet with them, “Everyday! Five days a week. If you’re going to run a high-powered, take no prisoners, juggernaut of a successful sales organization, that’s my first recommendation: Meet with your sales team daily.”
As a small alarm company, if you’re doing everything right, you will one day be faced with the need to hire salespeople so you can move your company to the next level. Juggling your time between installation, service, and sales is not easy nor is it the best way to conduct business.
Commission sales without perks is perhaps the best way for a small alarm company to start out. In some cases, due to lack of start-up capital it may be the only way that it can happen. But in time, you will want to offer additional benefits as part of your commission sales program. The incentive for you is two-way loyalty where you’re not looking for sales personnel all the time.