Questions

I am just starting my business, and because of my busy time at work, I can only manage the main aspects of the business, so I decided to hire a business development/sales executive to go and propose clients about our services. Here is the question: Do you recommend hiring this person as a full-time employee (salary based)? Or I should be hiring based on a commission of each sale transaction/client lead? Or a combination of both. Obviously, I don't want to endure too much costs at the beginning but i also want to start right.

Sales comp can get messy as you need to be careful it's outcome incentive is truly aligned with your Company goals and more revenue at all cost can be good for commissioned but kill a company, culture and product - and P&L.
Most common approach is OTE On Target Earnings with a 50/50 split.
So it goes roughly like this:
Your OTE is 120k
Your base is 60k (50/50)
The 60k incentive can be earn by achieving this ..... metrics and goals and could include % but better being payments Hitting Targets (at $25k deals you get X, and 50k you get X+, )
and because we are new at this we can review this quarterly to make sure we are aligned. On Target Earnings means this IS the target I want to pay you for getting us X.
You can also define this, and should, for ability to make above OTE amount.
It's simple but if you want more, just google OTE SALES or ON TARGET EARNINGS there are a lot of great articles on this.


Answered 7 years ago

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