Don’t Get Duped by a Crazy High Commission Job Offer in Roofing Sales

The person who pays the most commission is not necessarily the best person or company to sell for. This video is for three types of people. The new sales rep, the seasoned veteran looking to potentially make a change, or the owner of a company who is either figuring out how to pay people or concerned that your team members are jumping ship because the new guy started a company and he's trying to bring everybody over by offering to pay him more. This is incredibly common and I've watched it backfire a million times. And no, this video is not designed to say pay people less, but is designed to expose the truth of what happens. The problems that I see occurring from companies going bankrupt, sales reps not getting paid, sales reps jumping ship and then coming back to where they started because things didn't unfold as they expected. So no, the company that pays the most is not necessarily the best. There's more to it and that's what we are going to get into before we do. Welcome or welcome back, Adam Bensman here, founder of the Roofing and Solar Reform Alliance. And everything that I do here is designed to help you and your roofing team outsell, outgrow and out compete the rest so we can stomp the scum out. Now let's get started. Roofing sales is personal development in disguise and the reward for growth is life changing. I hope my content helps you create a richer life. And bank account commissions. So many salespeople, and rightly so, because your livelihood depends on it. Believe that how much I get paid dictates who's the best fit for me. Especially folks that have done well in life, they have a successful track record and they say, hey, well I'm making this company all this money, I deserve to get paid more and that person will pay me more. So let me just share with you one of the biggest and most common both mistakes and occurrences that I see in the industry and that is new people that were salesperson for this company, they leave, they go start their own and they say, hey, you know what, man, I was making all this, the owner was making way too much money. I can pay my guys more. And they're offering these crazy commission plans, like 60% commission to the sales rep, 40% to the company, or like no overhead in a 5050 split or the overheads coming off the profit and it's really small in a 60, 40 split. Just these completely outlandish pay plans. So again, the reason this is is it's the sales rep who started their own business and they're new. Okay? So it's the new owner of the new company. And the strategy is, man, I'm new. So what I'm going to do is recruit. My competitive advantage is to recruit. The people pay more. But what I want to point out, because I've watched, in fact, I actually just spoke to a member of the Roofing and Solar Reform alliance reached out to me. One of his salespeople was about to jump ship and go work with another company who, who was offering him, you know, all of this stuff. And he says, man, like, I want to make the change because I feel like I deserve it. I want to make as much money as I can per job. But I also really love this company. I love the owner and I love the people I work with. So let's get into this one. Overhead. New roofing companies don't actually understand what their overhead will be because they're operating out of their house. And true overhead expenses are going to be somewhere between 17 and 26%. This is a general average, which I recognize is a very large range. 17% can often be for a company selling insurance, roofs, storm damage, replacements that isn't spending a lot of money on marketing, et cetera. The higher percentage will be more of their retail company who's investing in a large team or larger team, a support team, inside sales leads, etc. So again, this number is a rough range now. So in the old days, which these are kind of dying, you'd see those like 10, 50, 50 plans. Or now the number often is at 15% for overhead instead of 10. But the interesting thing is even that 15%, just so you know, as a salesperson or an owner, doesn't actually cover overhead expenses. So that's issue number one. Now number two is these pay plans are not scalable. Now what do I mean by that? The new company says, hey man, I'm going to pay you this crazy offer that no one else will, which works for today because you're operating out of your garage. You haven't quite figured out, you know, getting an office, getting proper insurance for everybody, hiring staff, getting a website up, wrapping trucks, and doing all things to invest in the brand and to grow a legitimate business. And I know some people might, might think I'm being offensive. I'm not. What I consider a legitimate business is a business that someone would want to purchase. Now, a business in the roofing world that someone would want to purchase is a business that would run if the owner was not there, meaning if they got hit by a bus, that's like the owner got hit By a where the business still run and is the business making at least $1 million a year? Now, it's not to take away from your hustle and your drive and you can be making incredible, really good money running a roofing business. But when you get to the point of having a real business, that's the definition in my mind, $1 million a year profit that someone want to buy and would run without you. But to get to that point is very different than bootstrapping it. And believe me, there are people that are bootstrapping it. And you should. Everyone needs to. And everyone has to start from somewhere. But what happens if you say, hey, I'm going to pay this, let's say 10 50, 50 splitter or a 60, 40 split or something crazy. As soon as you start stacking on that overhead, it becomes not scalable and the payment or the commission needs to get renegotiated. Now, full transparency. When I was COO of a company, my peak, I had 30 salespeople. We outgrew what worked in the past. We realized that production, this was back in the days when sales reps were running everything cradle to grave. And we realized we have to segment this process and get our salespeople selling and have a production team and have a supplement team. So what we ended up needing to do was create these new roles and you can't pay the same commission and support that staff. So we had to go renegotiate our commission structure. But the interesting thing is we went from 1050, 50, and after renegotiated went to 15% overhead, 35% commission, which is roughly around 1030. Okay. Now some people say, hey, that's way too much. No, but what ended up happening is in one month, the person that was making the least amount of money was number one at the company. Why? Because he was bogged down on all this stuff. And so many salespeople get wrapped up in looking at this number. How much am I going to make this? 50%. But they don't realize what time goes into producing this. So if you leave a company who's handling everything for you and all you have to do is sell, you go to the next company, they'll pay you more, but you have more responsibilities. Those responsibilities can be incredibly cumbersome. We freed up roughly 75% of our sales team's time by doing this 70% with a reduction that did not equate to 70%. And most people made more money because they had more time to sell, which is what actually made the money not processing the job. Okay, number three, small companies that offer this often don't have cash reserves. They're not set up financially. This is just a common mistake. So if you're a new owner, don't do this, that they spend what they make and they're living paycheck to paycheck. They're a rich broke person. And there are mistakes that will happen in this business that can bankrupt you overnight. I had a friend of mine, by the way, the supplier had roof loaded a garage of a luxury home and the garage collapsed. It crushed all the cars. It was a million dollar loss. Between the structural damage on the home, the cars inside, obviously there was insurance subrogating from him, to them, to them, to them, to them, to everybody else. But in the short term, it cost him a million dollars. Now for us, I remember one time we ordered 70 some thousand dollars of windows for a commercial project. Then the company that we had put the deposit down for the windows, they got their assets seized by the IRS for not paying taxes. But the IRS doesn't say, oh, we're so sorry about you guys, let me give you your money back. The IRS kept all the money, so we just lost 70 grand. So this stuff happens and mistakes, they will. It's not if, it's when they happen. So young companies without those cash reserves can result in the business going bankrupt or with a little hiccup that occurs out of nowhere, can be crippling. And sales reps might not get paid because there's no funds available. Okay, not implying all of them because there's good people that are growing a business. And by the way, it's not to say you shouldn't work for a growing company. This is just the things to be aware of, to see how the company is being run. Number four is growing pains. This is a big one. If you're working for an established company who knows what they're doing and they have production dialed, they know they've been able to produce 5, 10, 15, 20 roofs in a day. And you go to someone who's starting out from scratch and they are starting to go through these growing pains. And what can happen is with these growing pains, causes customer problems and issues and complaints because the ball gets dropped, quality assurance goes down. Believe me, I've been there, I've been through it all. And then as a salesperson, you're in the home saying, hey Mr. Homeowner, we're going to do an amazing job for you. In the back of your head you're like, oh, I really hope they don't screw it up again like they have the last 10 jobs I sold and then at some point they keep screwing up and then you have no confidence and you just feel like a total slime ball selling because you know that what you sell won't be delivered upon and then you make less money and then you finally leave and go to somewhere else. So again, that's a big issue. And the number five is the concern on longevity. And the reason is majority of roofing companies, I forget the exact percent off the top of my head, they don't make it till five years. Longevity is a, let me put that up here. Five is longevity. They just don't make it that long. So you jump ship from one really good company to one that is just going and you're going to be struggling through not scalable renegotiating, pays, potential cash flow reserve, growing pains and then are you even going to have a job in the future? Now at the same time, there are growing companies and there's many in the Roofing and Solar form alliance who are investing in their growth the right way. They're learning from successful business owners who've done it before them. They're joining myself and Daeshun Bryant and John Cenac and Cody Landles and Jim Alleen in the trench to navigate these things. So there are folks doing it right. So if you're someone who said, hey, you know what, I'm either looking for the right company to sell for or I need to change from the company that I'm with because they're not a good fit, you can fill out the form. There's one beneath this video. To get connected with a member of the Roofing and Solar Form Alliance. Fill out some information. It'll post automatically in our private discussion board and any company who might be interested in chatting with you will reach out. So there you have it. Don't assume that because someone's paying you more money that it means it's actually the best for you. It doesn't mean that there's going to be the best growth potential, the best longevity, that you'll actually get paid, that it'll be like that for the long run and then it'll make you the happiest. Because at the end of the day, forget all this for a minute, rip this off and say, hey, this part doesn't matter. Assume all of this that we just went through is garbage. You end up working with people and spending more time with them than your own family. In culture, in a good culture, fit is so important and that's why at the end of this, I want to link to this next video for you, and that is to help you ask the right questions to choose the right roofing company that's best for you. So stick with me here and we'll jump right into that. But right before we wrap up, if you're interested in joining us on our mission in the most powerful network in the industry and to arm your team with the ultimate toolbox, then click the link in the description to learn more about the Roofing and Solar Reform Alliance. Hey, thanks for joining me in this video. I'll see you in the next one and we'll talk about aligning yourself with the right roofing company so you can have a long, prosperous and successful career that makes you happy.