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what does a salesperson Compensation Plan actually look like with real numbers none of this guessing game but real numbers that would make a salesperson happy and have them perform to put more money in your pocket my name is Harrison Baron from growth generator.com we help msps with sales training and marketing before I get into today's video I do have to mention two quick things as always there's a master class down below I would highly recommend going and checking it out I do swap them in and out there's currently two in the cycle by the time you see this there could be three or four so go check that out I would highly highly recommend it and the feedback that we get from all of them is honestly fantastic and I appreciate all of you guys for providing the insights that you guys do on those number two come hang out with us in the Discord I don't know what you're waiting for if you'd like to join it is growth-rates docomo we don't ask for any contact information all we ask is for you to come in ask great questions and be a part of the community and if you're interested and you don't know how to get there there's a link as always down in the video description so let's talk about comp plans there's a couple different areas that we really need to talk about there's specifically five of them when it comes to your Compensation Plan Now Compensation I'm going to break out my money here because it's always important compensation is the total amount of money that that person should make we're going to be talking about base salaries commissions your bonuses incentives profit sharing and Equity Believe It or Not There is some people that do that and then total or On Target earnings which is the entire amount of compensation in the next video following this video I'm going to talk about commission structures this is comp next one is commission they are going to be pretty different because some people might be paying people differently and I want to provide as many great options as I possibly can to you guys to be the most helpful resource by the way if you've made it this far I would appreciate the heck out of a like And subscribe I am I have to make a note to myself to tell people to subscribe because it shows in the numbers but I appreciate theck out of you guys for always checking out so let's talk about base salary your base salary is the money that you get paid basically to just show up to work now if you've come from a job already you probably get some kind of salary especially if you're a technician more than likely you probably just have a salary you don't call it a base salary or any of the terms that we're going to be using in this because you get paid to do a job now salespeople get paid to do a job but they are much more or or it is much more important to talk about the I guess the the amount of work that they actually do in most cases at least from what I've seen salespeople work way more than 40 hours a week and they are constantly trying to find New Deals they work sometimes in most cases especially in my past history I've worked 60 to 70 hours per week it's not because I didn't like it I enjoyed doing it it didn't feel like work but your base salary is the amount of money basically guaranteed to you every single month now there's three tiers of employees the first one is going to be that entry level just starting out they have little to no experience now all of these numbers are going to be us-based not in a major Tech Hub but not in the sticks either this is going to be a more Suburban maybe a couple miles outside of a city for a beginner you're looking at between 40 and 60,000 now what makes a beginner a beginner is somebody that has experience in the industry understands what an MSP is knows computers but hasn't really done sales just yet or has some kind of sales background and is a little bit techy they're going to get paid about 40 to $60,000 per year obviously depending on where you are you might want to adjust that but that's a okay salary some people might say hey it should be a little lower than that to each their own I like to pay people fairly or as fairly as I possibly can a midlevel is somebody that has experience and some experience in sales they might not have a tremendous history they might have not have the craziest resume out there but for a mid tier salesperson believe it it or not it's somewhere between the the numbers of 60 to 80 now if you are like hey that still seems a little high 50 to 70 I think a mid-tier person mid-tier salesperson is going to be doing and keep in mind in the next one we're going to be talking about inside and outside sales the next video but for the most part $60 to $80,000 a year at this point they probably know a lot honestly they know servers they can fig servers they know the resources to go get the information to go say hey this is what we need to deploy there they have a good idea and they're measuring certain things for cable runs and have a really good idea of onsite time for different projects for just different work in general and then you have your senior level this can range just basically 80,000 and up it could be as high as $80 to $100,000 now for big msps that's a reasonable number for anybody sub 200 people in sales obviously take this with a grain of salt you're probably looking at the 70 to $80,000 mark for a high tier person but it also depends on the complexity and the services that you're going to be offering do they know the networking do they know computers do they know servers do they know the cloud do they know how you're going to be buying licenses are they getting involved in other areas of Technology Maybe video surveillance and access control the more knowledge that they have the more that they're going to be compensated in that way so you have three salary brackets that 40 to 60 or yeah 40 to 60 60 to 80 and then kind of 880,000 plus give or take and obviously take this with the grain of salt once again where you are what you're capable of paying people and what you think is fair and how they perform you might want to say hey we're going to put you on a we're going to start you here and then in six months we're going to re-evaluate to kick it up that might be something that you want to do next is going to be commission so commission is something super touchy because nobody really knows how much you should be paying on commission the next video that I'm going to be releasing is going to be covering all of that but I am going to tell you a couple different things there are going to be three kind of different ways that you're going to get paid commission one on Hardware Sales it is going to be a very small percentage sometimes as little as 1% or 10% of the profit on the hardware somewhere in there depending on what you feel comfortable with but you have your software sales or better yet Hardware Sales then you have your software sales there is plenty of room to be made in software sales depending on what you get and then the third and most important is the recurring Revenue especially for your service contracts there are tons of different ways to pay that you can do the first month upfront you can do hey you're going to get a piece every single month it also depends on the role if they're bringing that that customer in and they never see that customer again it's a very different role but if they're bringing that customer in and they're kind of checking in on that customer on a fairly regular basis you might want to incentivize that person on a monthly or annual basis so that way that customer renews that contract but that's something really really important and commission is kind of crazy I'm going to give you guys a couple different options like I said in the next video so you're definitely going to want to hit like subscribe and notify number three is your bonuses and incentives now these are just hey if you hit this number we're going to give you more money right more of this stuff what do those numbers look like for you you have to figure out what those could be typically a bonus can be 1 to five even more per of that person's compensation so if that person's total comp or in this case on target earnings is $100,000 maybe because they sold I don't know3 or $400,000 worth of services well you could probably throw them an extra one to five maybe even high as 10% as a bonus for saying hey thank you you did a great job you made the company a ton of money and you can have that as well but you can develop what those incentives are hey you know what if you close x amount of business in the first quarter x amount in the second quarter x amount in the third quarter and so on and so forth but you as the business owner get to figure that out but bonusing and incentivizing salespeople is a real thing and trust me it works the more incentives and the more bonuses you give the more you are going to yield from it trust me sales people don't go into sales because they love it they go into it because they love this they like talking to people they happen to be good at it but it is tiring talking to people all day and consistently never turning off which is where most salespeople don't there most people fall into they just are constantly constantly working number four is profit sharing or Equity now this is not something that I would always recommend but hey if it's a senior level person or you really want to retain top town or they're doing a really good job and you're like hey this would be horrible if we lost a salesperson this person brings in all of the business it might be something you want to explore they might get a couple percentage points of total profit they might say hey we're going to take the top you know 10% of our total profit and distribute that through profit sharing through the rest of of the employees and maybe the sales team gets a percentage of that you could also give Equity it is not uncommon to give your employees a share of equity it is not common but it's not uncommon if you really love that employee and you think hey this is really somebody that should be a part of the team forever or we couldn't imagine Business Without this person Equity is not a bad thing in most cases people are going to be pretty happy to take Equity as a form of comp because they know that the more they work and the harder they work the more more the business grows and they get to have a share in that I personally love Equity I wish more businesses kind of gave it out but I understand the fear of hey you're giving out Equity it could be something that they don't get back and they really need to make sure this is definitely geared towards a more veteran of the company if they've been with the company for a long time and maybe you've kind of maxed comp Equity is a really nice thing to give even if it's only a very small percentage of the company and it gives that person something more incentivized to work for because now they have a small piece and they get to taste that pie and last but not least is your On Target earnings this is when you say hey you're going to make $150,000 we're going to take your salary of I don't know let's say 60 to 80 we're going to take your commissions we're going to in you know have your bonuses and incentives if you hit all of these things you're going to have your On Target earnings maybe it's 125 150 ,000 per year so that salesperson knows hey I'm going to look at the numbers and I'm going to say if I do this this this this this and I work really really hard I could make upwards of $150,000 per year it is something that is regularly advertised in job postings talking about hey what's your OT You're On Target earnings I see it all of the time it is a common question to get asked in an interview is a common question to ask in an interview understand what an ontarget earning is it'll be a piece of every single thing that I talked about that base salary that commission bonuses and incentives and maybe even profit sharing or I wouldn't put equity in there and then you have your OT your On Target earnings you hit all your targets boom this is how much money you are going to bring home so that is compensation for an MSP if you've enjoyed this video I would highly highly highly recommend hitting that like button subscribe button notification Bell I love the heck out of you guys check down below for all of the good links and the next video that is going to be coming out is all about your commission talking about the percentages of commission the different types of commission I'm super excited for that one I'll see you guys on that one bye