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Ask DN: How do you pay for biz dev?

6 years ago from , Owner / Designer

I'm considering bringing employee #3 on to my wee enterprise. Part of her role would be biz dev, which would be my first time paying for non-billable work.

I want to be more than fair to her, but also I'm tiny; I don't think I can afford to just pay out a salary on the hope we get more work. I'm thinking about a monthly stipend (of a couple hundred dollars?) for her to spend or keep (she knows what's best) plus a percentage of any project she brings in (5%? 10%?). Or maybe this work is pure commission (plus expenses)? Maybe this evolves (hopefully quickly) to where I see I can pay a salary?

Do any other tiny agencies here have experience with this?

6 comments

  • Colm TroyColm Troy, 6 years ago

    Honestly - I'd go the other way. I'd bring on someone to do the billable work and have you focus on biz dev. I know - I know - you probably want to stay in the trenches working on projects. But if you're building a business as a business owner you are the best Biz Dev/Sales person for your business. It's very hard to outsource/delegate this activity in a small agency as you're really selling you.

    If you bring someone to do the billable work it's easy to quantify their value, leaving you to focus on bringing home the bacon.

    4 points
    • Keaton TaylorKeaton Taylor, 6 years ago (edited 6 years ago )

      this.

      No one can sell you like you can.

      I work for a small company (3 ft and 1 pt with several contractors to pick up any slack) and our biggest asset is my boss selling while we do the billable work. He still jumps in and sets up repos and talks through design with me sometimes. Time spent not selling is time spent managing projects on a high level.

      1 point
    • Lee Fuhr, 6 years ago

      Dammit, Colm. :)

      You're right, of course.

      I'm hoping for some sort of middle ground, where only part of her work would be selling, and I wouldn't stop. I guess, really, she'd be a pure addition to the chance for incoming work.

      0 points
  • Martin LeeMartin Lee, 6 years ago

    If you found the right person in just the right situation, maybe working solely on commission could work... but in my experience, no. We went through almost this exact scenario in the past year and realized that (at least for us) someone part time or working only on commission isn't a good idea for a small web firm. Web projects tend to have a longer sales process and it's just not fair to ask someone to work for six months on the off chance that they'll get a sale.

    Colm is right - you're much better off bringing in new clients yourself. However, at some point I realized that part of the reason why I started my own business was to focus on the things I enjoy. I don't enjoy (or do especially well at) continual networking, calling prospects etc. In my case, that meant that if I wanted to grow, I needed to bring in someone to help with that need. I'm still VERY involved with the sales process, but I'm sticking to the parts of it I enjoy and do well at.

    In our case we decided to hire someone full-time. The non-billable risk factor was minimized by finding someone that could serve in other roles when needed (usability research, project management, etc.) How has it worked out? Not sure... ask me in six months.

    1 point
    • Lee Fuhr, 6 years ago

      Okay, this is intriguing. This sounds like such a similar situation.

      This person I'm looking to bring on will also help in a bunch of other areas (research, project management, operations, resourcing, even graphic and UX design).

      So I figured I'd pay her a bunch of different rates, for now at least, given the varying market values for these different tasks. The question then is how I pay for the sales work.

      But I guess you brought someone on fully full-time and paid a regular salary. But then how do you pay for her (his?) sales time? I guess she just does her best on everything she's given, and isn't specifically incentivized to go to networking events with her nights and weekends. It's just a more personal level of responsibility.

      Hmm. Much to figure. Thanks so much for your input.

      0 points
      • Martin LeeMartin Lee, 6 years ago

        I think a lot has to do with the individual. Instead of focusing on specific skills, I tend to look for someone who is super responsible and is a good fit for the team. Their job is to help bring in new clients - if they're not providing enough value to the company, then we need to re-evaluate their future with us.

        No commission, but we offer a good salary. Their value to the company may not be directly billable, but ultimately it's factored into the cost of doing business.

        I'm happy to talk more about the details privately.

        2 points