Jon Bryant: Okay, let's start this thing again. Michael, how's it going, man? It's late November. What's going on?

Michael: Yeah, doing pretty well. It's budgeting time of year, working feverishly on Excel spreadsheets and figuring out all the numbers as we head into 2024. It's crazy that the year's almost over. How about you?

Jon Bryant: Awesome, did you? Yeah, pretty much the same thing. Trying to plan for 2024. You know, get the best sense of what's going on. Predict things, you know, how's the economy going to be? Pretending like we just don't care how it's going to be, or it's going to keep going forward. So, yeah. It's all pretty, yeah, pretty standard kind of this time of year stuff. How was Thanksgiving? Did you guys have some turkey? Is that what you do?

Michael: Good. Oh yeah, absolutely too much, too much, too much turkey, too much of everything. It was great, it was good. I have the family over, we hosted, yeah, so it was good times. It's nice to get a little bit of time off here.

Jon Bryant: Awesome, man. Cool. Yeah, do you also take some time off at Christmas as well? Or do you, how do you plan?

Michael: Yeah, I do. Yeah, yeah, actually, we're going to go down to Florida for the week before Christmas and visit my mom. She's got a place down there now and it's like 70 something and sunny. So I need a little, little bit of warmth and sun to get by and then we'll be back for Christmas and, you know, afterwards and everything.

Jon Bryant: Awesome. Cool. So, not really, not really. And I'm actually okay with that. It's been a lot of travel this year. So just kind of hang out, see the family and do all that stuff we do every year. The same way.

Michael: So I've got one, oh sorry, go ahead. I was just going to say I've got one announcement I haven't told you that happened this week. Our sales rep let me know that she's going to no longer be working with us here, which is really putting a damper into the planning because she's been doing well and we were excited to see her go into next year. She's about to be here for about two years. It takes a while to get a sales rep up to speed and all that. So now we're back trying to figure out hiring sales reps and compensating sales reps, trying to keep them motivated. Let's chat about that maybe today. I'd love to hear your thoughts on that topic.

Jon Bryant: Yeah, I guess first off, how you feeling?

Michael: I'll tell you, I mean, I'll be honest with you, I was a little shocked and surprised when it happened. You know, it kind of took me by surprise, like I mentioned, and came out of the blue. She's done really well. You know, it's been a, you know, certainly a little bit of a challenge. She came in here with really not any sales experience about a year and a half ago. And you know, has really picked it up well, especially over the last six months, I would say has really hit her stride. It was on pace to start making six figures next year, making really good money. And yeah, I don't know. Like I said, it was, it was a big surprise, but, you know, a couple of days of that shock now has worn off and it's back to the practicality of, you know, let's get some people hired here and an opportunity for me to do better. Maybe change a little bit of how we compensate sales reps. You know, I think the one good thing is it happened at a time of year that is a little slower. You know, and so it's not like we're getting inundated with leads that somehow we're going to have to try to take care of. And we've also already been hiring. We, you know, we've needed to have add a second sales rep to that side of the business. So I've been meeting with a few people recently. So I anticipate we'll have somebody hired here pretty soon, but. You know, like I said, it's, it's kind of an opportunity to maybe rethink a little bit of the training and compensation and some of the things, you know, as we kind of have a clean slate.

Jon Bryant: Well, why don't we dig into that? Cause I know, you know, personally, having had lots of sales reps through our doors over the years at the painting company, you know, you put all the effort in, someone leaves, it's disappointing, you try to do it better the next time. And I think there's a lot of value in that. And probably this discussion for people that, one, maybe you've never hired a sales rep. So, you know, that feeling of putting all that effort in, losing somebody, that sucks. But at the end of the day, you got to get up and do it better than you did last time. Hopefully learn something. So, tell me, I mean, you got, obviously we're late November, is the idea, like what's the timeframe here? When are you going to try to get some people back in?

Michael: Yeah, I think so that's a really good question. I think, you know, maybe it's for somebody who's looking to hire their first sales rep too, it's also like, when's the right time of year to hire a sales rep? I think the answer that I've always had is like quarter one. I think it's a good time to hire a sales rep where leads are generally, you know, trending in a positive direction. You know, typically as we go from January to February and February to March, you know, we're starting to see natural demand increase. Kind of starting to come out of winter maybe. And so I would like to get somebody in here, you know, I would say December or January. December's hard. We don't you know, generally we don't get as many leads as we will let's say in January, you know the holidays. I mean by the last two weeks of January or of December I should say there's not a whole lot of activity going on. It's usually just a lot of follow-ups phone calls, you know checking in with people saying thanks for their business and things like that, rather than, hey, the phone's ringing off the hook, you know, let's have a full schedule of in-home appointments kind of stuff. So I would think if we hire somebody before the Christmas holidays, that's okay. But most likely we're looking at, you know, maybe a January start.

Jon Bryant: Gotcha. And what's the, you know, bass in there? Yeah, I mean, like. We've kind of experimented bringing in people all times a year. And the only time it's really bad is the summer. When it's too busy, it's just impossible to give them the attention they need. And so, you know, this year at the painting company, we brought somebody in, I think it was September. And we wanted to give them kind of a three month runway to get going for the start of the year. And knowing that it takes, I'd say, you know, a good 30 to 60 days to really get some up to speed in the paint industry, whether that's, you know, estimating sales process, what, whatever it might be, we need some time. And so, and so we went through that process. We hired, we hired one person, but we probably should have hired two. And we, we just cast the net as wide as we could. And so that process still took us a few weeks to actually get the, the candidates in. I bet them do our, you know, personality testing, meet with the team. This is kind of the multiple rounds of interviews. So I think if you shot for early January, that'd be, it sounds even aggressive. Like you have to start putting some work in probably, you know, come Monday, Tuesday.

Michael: Yeah. I think the good news is, you know, like I mentioned before, we have, I have two people that have been interviewing, that kind of came naturally. You know, we don't have a job posted per se. But, you know, do you have a couple of people, there's a guy that I work out with at my gym, who's a salesperson in a window company. And he and I have been chatting for probably over a year actually about him coming on board at some point. And so we've been meeting a couple of times over the last few weeks, having conversations. And then there's another guy who I got connected with through our local Sherwin Williams, who is kind of running a small painting company locally with a friend, looking for some stability, looking for benefits and, you know, better compensation and all that kind of fun stuff. It's, you know, it's hard to go run a two or three person painting business for sure and scale that. And so I think he's interested in maybe joining us and some sort of role and most likely it would be in a sales capacity. So like I mentioned, we, we've got a couple people, you know, already kind of in the process, but I agree if we were starting from scratch, I think it's usually like six weeks is kind of like a pretty. You know, almost aggressive timeline. Yeah. But realistic, you know, but possible.

Jon Bryant: Is that just for the interview process or for the actual training as well? Like that six weeks, is that going to be? What's the comment? Oh yeah, yeah.

Michael: No, sorry, just interviewing. So by the time, if we, let's say we posted on Indeed six weeks later, we might be able to have a hire. If everything goes well, I think that's kind of an aggressive timeline.

Jon Bryant: Right, gotcha. Cool, I mean, taking what you know now, what are you going to do differently this next round?

Michael: Man, that's a good question. I mean, we've had a lot of reps and we've tried a lot of different things. People with industry experience, people without, you know, sales, you know, seasoned sales pros, people brand new. I think, you know, I think one of the things that we haven't really tried to target is, somebody with like maybe a higher level of ambition, somebody who we could see becoming like a sales manager here. That has not really been our focus, but I think it needs to be. Ultimately, I want to get out of the role of sales manager. Probably would have told you within a year. At this point, it seems a little farther away than that. Just with having to hire some new reps and stuff like that. So anyway, I think that would be my one big goal. Is maybe raising the bar for what we're looking for in our sales reps. Again, not to say that the people we've had haven't done well, they have, but I think, you know, there's a reason that they're not still here. And perhaps some of it is they just reached their ceiling and needed to move on to something else for a new challenge. And I'd like to find somebody maybe with a really high ceiling, perhaps compensate them even higher though, because of it.

Jon Bryant: Soon mentioned, I mean, earlier on you mentioned compensation as being a thing. You know, this, this go around, what are the changes? I mean, we, you and I have talked a lot about sales rep compensation over the years, but do you think you ought to go higher? Do you got to change your structure? Do you feel like that was the reason why somebody left or are they leaving for that reason? All that stuff.

Michael: It's hard. I mean, it's so hard to tell you, you know, it's, we would still like to do an exit interview perhaps this upcoming week. You know, just to try to get a little bit better idea, you know, that was not part of the original conversation when she said she was leaving, you know, it was really just to pursue more of like an entrepreneurial venture, on her own. And, you know, that's great. Certainly different industry and stuff, but, I don't know. Yeah. I mean, what are your thoughts? Like. I've heard it often said, we can get like the details of how we compensate. But at the end of the day, what do you think should the expectations of a sales rep be? How much should they be able to sell? Let's just say residential sales, paint sales. And maybe do we think of it as like a percentage of that, that should go towards total compensation so that we're not paying too much, we're going to end up going broke because of high level sales reps. I want to have a sales rep that I'm excited for them to go crush it. And when they do, they make tons of money. And I'm really happy to pay that because we're, you know, we set it up well that we're winning as, you know, as a company as well. So what are your thoughts? Like how, how should we think about maybe the total amount of compensation so that it's not too expensive?

Jon Bryant: Yeah, I mean, we've done a lot of thinking about this over the years and talked to a lot of people too. I mean, the amount of data we have or have been able to kind of process over the years too, you know, has led me to a few conclusions. One, I think, and again, I want to hear your thoughts on this too, but I think in the painting industry, being able to pay that like around seven to 8% of a sale to the rep is a really good number to shoot for. I think that also ties in, the reason it ties in well is because if you're a good painting sales rep, you may get the thought of like, oh, I should just go do this myself. Well, the average profit margin in the painting industry is six to 8%. And so in a way it's like, well, if you're a really good salesperson at that range, why go do your own thing? Somebody else is going to support it, do all the processing, all the administrative stuff that maybe you're not good at. And so I feel like that's the reason to kind of end in that range. But that also makes everything else run smoothly. I know people will probably, you know, debate me on that number, but I think it's, I think it's a good number. I think you don't want to underpay sales reps. There's too much competition for good sales reps. You want them to be excited. I don't think you want to have caps on commissions. Obviously they got to sell good jobs, right? That's a, that's a mandatory thing. And so. You got to design a structure around, around making sure they sell good jobs and compensating them well, if they do. And I think it's a, you know, it's a great industry to sell in primarily because, you know, it's just not a sophisticated sales market. And so if you're, if you're a good salesperson, you're competing against people who are probably just not trained at all or don't have any basis. So, so yeah, I mean, that's, that's kind of my, my initial thought. Where do you stay on that?

Michael: Okay. Yeah, no, I agree. I mean, I've always heard, you know, kind of similar to you, like six to 8%, seven, 8%. So what are your thoughts on like how much revenue do you think a sales rep should be able to bring in? Let's just say, you know, maybe not like your superstar top whatever in the industry, but maybe more of that like average or, you know, first couple years as a sales rep, what should their annual sales be? I'll give, you know, just give you my thoughts. What I've seen is somewhere in the neighborhood of like 1.25 to 1.5 million. I think by market that probably fluctuates a little bit, right? Depending on your sales rate. But for us, that's what we've seen. And generally in about their first year to a year and a half, they should be at that level.

Jon Bryant: Yeah, so I'd fully agree with that. If you're around a million, so if you have a rep that sells a million in their first year, that's a rock star. That's a really good performer. If you have somebody in their second year kind of selling at that one, two, five mark, that's really good. I think that's going to fit you in kind of the, let's call it the 60th percentile. That's kind of average for a good rep. Obviously, if you're going to cross that $2 million mark, you're generally a rock star. And so when we look at averages, like, yeah.

Michael: Yeah, you're probably, you think you're in like the top 10% at that point?

Jon Bryant: Oh yeah, for sure. Yeah. So, yeah. So yeah, I mean, like those numbers are, if you're hitting that, those are good numbers. I think at those numbers, someone can make a very good living as well when you kind of base it on that, those percentages we're talking about.

Michael: So to get to that, I think one of the things that I often talk about with other painting company owners is how many estimates should they be going on? How many leads should the company be providing versus everybody's favorite topic, which is prospecting, sales reps going out and getting their own work a little bit? I'm sure at some point we'll have to have a more in-depth conversation on that, and perhaps even bring somebody else on who can be the expert in that regard. But. You know, how do we think about that? Right? Like I've got to imagine if a sales rep is out generating some more of their own business and we're not spending a bunch of marketing money that has to factor into this conversation.

Jon Bryant: Yeah, I think it doesn't, it doesn't. I'm a little bit on the fence about that because the thing about relationships is those jobs close way easier at a higher win rate. And so it's like, do you really want to be battling it out and those lower success rate jobs in your time that way? Or would you rather build relationships, network prospect? And close and win jobs at a higher percentage and make your time more worth it. And so I've always been of the perspective that you kind of, if you pay more for it, great, because you can kind of incentivize it, but really when you educate the rep properly to understand where the value is for their time, they should be doing that more in order to make more money anyways.

Michael: So your argument, just to re-paraphrase that or rephrase that, is it takes the same amount of time, maybe on the upfront, because you've got to build the relationships and do all that. But over time, you're going to end up working maybe less hard because these quotes you're going on are going to sell at a high rate. So you have to do fewer quotes on a weekly basis, et cetera. Is that the argument?

Jon Bryant: Yeah, that's been the argument. Yeah. What do you think?

Michael: Yeah, I mean, I think it makes sense. I think it's hard to help a rep get from like zero to that point. You know, it's kind of like most things, you know, maybe it's physical fitness or, you know, whatever health where it's like, you know, it's these. Little things consistently done over time are not always easy to do. But I think like that is what it takes to be successful with the relationship building and the referrals. And you know, that side of it. But it's hard to like stay motivated in the early part where you're not seeing the winds. You know, again, I think it's kind of like, you know, whatever getting in shape, if you will, or it's like those first couple of weeks are the worst, right? It's like, it's painful. You're sore. You know, on the relationship side, you're hearing a lot of nos, you know, as you're first getting started. And, but once you get into it, a few months into it, all of a sudden it's like, man, look at all these, you know, referrals I'm getting, and they're closing at a high rate and this is really motivating. But I think, you know, to help them get what I have, we've struggled with that. We have not had a good, you know, we have not had a good effort from sales reps in terms of that. And I know you guys have done a lot better with it, but for us, I think it's been a struggle, partially because we've had so many leads that it's kind of easy to not do it, where it's like, yeah, I could go do that, but I also have all these other appointments I could probably go on just as easily. And you kind of get maybe addicted to those appointments.

Jon Bryant: What's, I mean, what's your, totally. What's your expectation here for sales volumes of new reps? Like, you know, going back to the drawing board here, what are you going to tell people?

Michael: I think it's, you know, I think it's somewhere in that like 1.25 is kind of my expectation for a new rep. But where I kind of get that from is, you know, if we break down these numbers a little bit, so I think in a rep in like the busier months, let's call it the summer exterior season should be doing about 15 estimates a week. What, what are your expectations on that from the estimates per week number?

Jon Bryant: Yeah, I mean, 15 seems like three a day. To be honest, I don't really care. What I care about is that people are hitting their numbers. And so we have, you know, one rep that's really focused on commercial. And so their, their number of leads per week is just going to be different. Residentially though, like we've, we've managed to kind of build our average job size into about a $9,000 job. And so. We went, we pushed it from five and kind of consistently pushed it a little bit higher. And so we don't need 15 leads in our numbers. Cause our guys like our average close rate company wide is I think, 55%. So you, you start to look at those numbers and you're like, okay, for our reps to hit that, that total number 15 would be a lot, like 10 quality leads. If they're closing at that number. That's still going to hit them over the $2 million mark, right? So I think it comes down to doing the math, knowing your average job size, knowing what your win rate is, or close around those jobs, that's going to dictate what the number needs to be. But it's interesting to see that like, I think at 15, you can still manage your time, but you push that number a little bit higher, it always affects your win rate. And so, the lower number you have in my opinion, and with the ability to actually hit your goal, the better off you are, because you can spend more time with each lead and create more urgency and deliver the customer experience upfront, versus just like going one to the next, the next and we're following up. So it's a give and take. I'm not sure what the right answer is. For us, it's probably a little less than 15, but not by much. I think that's a good target.

Michael: So you would think maybe closer to 12 or something, again, similar. But yeah, I think it's interesting. I agree. Our close rate historically is always somewhere in the low 40, let's call it 40, 42, to 45, 47, somewhere in there. It's kind of where we always find ourselves over the, whatever, last handful of years. But I could easily see the argument that it's like, hey, do a couple fewer appointments each week. Spend more time maybe at each appointment, spend more time preparing for each appointment and especially everybody's favorite thing, following up with each appointment to actually sell the job. It's like, I'd rather do 12 estimates, sell 55% than do whatever, 15 estimates and sell 40%. And at some point, like the math is the same, but it's just like, it's more enjoyable. You're driving around less, you're meeting with fewer people, closing that higher number. And then obviously, like you mentioned, the average job size is the other factor there too.

Jon Bryant: Yeah, I will say, I mean, the reason we can get to that average job size is that we're not bidding every job. So when we talk about that 12, those are 12 vetted jobs that might come from 18 leads, right? So technically they had 18 quotes, six of them just weren't going to be a good fit for a variety of reasons. We've narrowed them down to 12 quality ones. They're doing that. And typically what we've seen with our reps is they will, we try to encourage them to do three days of estimates and two days of office time. So you're doing Monday, Wednesday, Friday, four each day with Tuesday, Thursday as days that you can do prospecting and follow up. So you're writing them up, following up, and you're blocking that time. And so it leads to more relationships versus I think, or more quality relationships. When you do estimates every day, it's hard to find time to prospect and to do that extra activity that is really valuable. So that's been our perspective. Is that, you know, try to qualify your leads, do less actual visiting of jobs, win a higher amount of those, and continue to build your relationships and your network so that come six weeks from now, those leads are even better because now they're built off referral, which, you know, painting a lot of it's about trust, that sales, especially interior, highly built around a trust. Relationship and when it's brought in by someone else, that helps a lot. So then the win rate goes up and it kind of works together. So my feeling is bringing on a new rep. I mean, like they need to know, hey, look, you're going to do appointments that we're going to give you, but we also expect that these are the activities you're going to do. And it's not just for us, this is also for you to build a longterm book of business here.

Michael: No, I like that. I think that, I mean, to answer your question, right? So how we got here, you were asking like, what are some of the things we're going to do differently? I think that's probably the main thing. You know, so over the last few years, since 2020, when we hired a new sales rep, it's been, you know, hurry up, let's get them trained. You know, there's a million phone calls coming in every single day. Everyone and their mom wants something painted. You don't need a prospect. You just need to go run leads. Well, I think we all know like that time is over. And now we have to go and be more aggressive and finding leads and our sales reps and really the entire company has to be focused on that. And so I think that's like the big thing as we bring in a new rep, it is 100% part of the job description and it's not just like an afterthought. And so I like the thoughts of what you just mentioned, like structuring their days to give them more. Time to do that in an intentional way and not try to just like, yeah, fit it in if there's time.

Jon Bryant: If you don't do that, there just never is time. You can always go to the next lead. But like you said, that 42, 47%, knowing that you could get potentially 10% more for less work with higher margins has to be. I'm going to guess a little bit tempting to want to try to push it towards that. At least it was for us. It's like, like our top rep, he takes zero leads from the lead line currently. So, he develops as this great network with a lot of relationships, a lot of referral building and, he, you know, he has a really high win rate. With, you know, less work, more fun. The whole thing is better and he doesn't take anything from the leads that commit like, isn't that incredible? Like my goodness. Yeah. So, I mean, it's incredible. And I think it's something to strive for because it's possible, right? Like here's somebody who is a top performer, not taking any lead leads. It's. And so people have told me before, like, well, you can't do that. I'm like, well, we are, he is. And so, you know, let's encourage our. I think what it comes down to is like when you're structuring this next person, being clear about what their responsibilities are. So anyways, yeah.

Michael: So how do you think about that? I agree with you for sure. And I think we have been. It's just that we're changing, I think, a little bit of the expectations. And I do think we have clear expectations. They just need to change a little bit with the changing in the economy. So what is your thought on that? What percentage of someone's sales goal? If we go back to this idea that somewhere, a million, or just over a million in their first year. What percentage of that, maybe in year one, should somebody get from, you know, the lead line or the company's marketing efforts versus their own efforts? You know, right? Cause we've got to give them at some point, like if we're expecting 50, we've got to give them enough leads for that. And I think for, you know, for companies trying to think like, when's the right time to hire another sales rep, is it when I have too many leads and I need somebody else to go service them or. Maybe that's not the right factor to be looking at because, hey, this person's going to go and actually generate leads. So anyways, how do you think of that mix? Like when you're coming up with their budgets, what percentage self-generated versus company generated.

Jon Bryant: Yeah, I mean, it depends on the individual at this point. Like our more senior reps are really, we're really trying to just provide every possible resource to give them the chance to get off the lead line. Now, new reps, the way that we've done that before is that we give a new rep everything. So where we might try to quantify or qualify a client upfront, we don't let them do that. We just say, go to every estimate we want you to learn. You need to take everything that comes in the door, even if it's $100. I want you to go look at that, learn the process of talking to customers, price it out, get the experience. At 30 days, we're looking to see some type of a sale have been made that's successful. So off that lead line, what are you doing? Like you've got a bunch of leads coming in that are bad. How are you managing it? How are you taking our training, our process and building, taking essentially something that shouldn't be work and turning it into work. If they can do that, it shows some success potential. And then at 60 days, we're really looking for them to be about. 10,000 a week, let's call it, 90 days, hitting their target of trying to get to a million in the first year. Now, the reason I say all that is because the framework we're asking them to use is that first you get a bunch of leads, but you're going to still build in your prospecting into your week, right? So you're still going to put your four hours in once a week at minimum. And we want you to document the activity that you did. So who did you call? Who did you reach out to? Where did you go visit? Who did you have coffee with? Which old customers do you follow up on? What warranties did you call to see if they're still happy? We want to know everything. And we have a point tracker for that. And so they have to hit so many points per week of activity in order to consider that a successful prospecting week. Prospecting for us takes, generally it's a couple of months to take effect. So this is like a longer term kind of farming strategy. But if you don't plant the seeds every week, you're not going to have success in two, three months. And so we need to provide them enough leads in those first two, three months to keep them on a successful track with a good trajectory, or else we're going to lose them. We've lost a couple of good sales reps because we haven't given them enough. So that comes back to like, we have to have enough leads to keep them steady and learning. We have to provide them compensation to cover that time. And then we want them through their activities, which start like, I think the third week of reaching out to people in our training. We want them to then start seeing the fruits of their labor in three months. And every week that they've done that, they're going to see future results every week after, but it's built into the whole thing.

Michael: A couple of questions come to mind that I would imagine somebody else listening might have. So how do you mention before, like, you know, new reps, they're getting the not good leads, the good leads, maybe kind of everything. How do you give everybody's different, you don't have to give us like too much specifics, but how do you define like a not good lead? Is it just too far away? Is it a really small project? You know, other factors like they rent the house versus they own it. Like what are some of the things that might determine that?

Jon Bryant: Yeah, I mean, it's all the above. So we kind of have a quality scoring sheet when our person or the office reaches out to them. And so it's the type of work, it's the proximity, it's the timeline, it's budget, it's sometimes related to how did the conversation go? Is it somebody who is looking to buy a property but doesn't have it yet? We're looking to score all of that stuff because the good leads do go to our reps who are more successful. Like we want, you know, if we've identified like that's a hot lead, we don't want that always going to the person who's new. But the person who's new is going to go and see all this stuff, even if, hey, you know, I punched a hole through the drywall at a party on Tuesday. Can you guys come fix it? And we know that, you know, our job minimum is higher than probably they're willing to spend on that. We'll still go and have our project consultant have a discussion with them, just to learn. Bring the info back, price it out, understand how to deal with, I think a lot of times sales reps deal with rejection, but they also don't learn how to deal with rejecting. And so we want to cut out bad work too. So we want them to learn that process early. So yeah, is there anything you'd add to that list? Do you guys see everything or how does this work for you guys?

Michael: No, yeah, very similar. Yeah. I think we prop in the past. I think we've not had new reps go on those quote bad appointments. Yeah, maybe trying to teach them how to be more, you know, selective with their time, but I do agree with you that those can just be seen as training opportunities, because no matter what, like if, no matter how much we score, you know, leads coming in. There's always the opportunity. Somebody's going to go on a bad lead, right? Even the best reps are going to end up on a bad lead here or there. And you've got to know how to handle that well and be tactful and help people to understand that it's not, you know, we would love to work with you, but here's the type of work we do. You know, you're about to sell your home or something like that. Like we might not be the right fit because you shouldn't probably be looking to spend a top dollar on that project. But you know. Maybe, but here's how we need to have that conversation. So I think we haven't done a good job with that, perhaps in the past of, you know, letting reps go out and just kind of learn from that, those conversations in person. Yeah. It's interesting. For sure. Yeah, I like it. Yeah, right. For sure. Yeah, I mean, it's just another, we know how it is. I mean, there's always something, challenge or struggle. And to your point, it's really, it happens for a reason. It's an opportunity to get better. In a year from now, I strongly believe that we will be a better sales organization than we currently are, which you know. Is good. It's a tougher economy right now. And so I think we have to be, as company owners and sales professionals in the painting industry, we have to level up our skills. And sometimes, you know, whatever, something that seems like a major setback, like losing a sales rep, is exactly what we need to, you know, force some changes and to get better. And so I'm, you know, I'm optimistic that that's what's going to happen. But. So I mean, it doesn't suck. Yeah.

Jon Bryant: So, yeah, totally, it always sucks. Okay, so for those listening that maybe haven't had the joy of hiring a sales professional for their company, what are the first three steps? What do you got to do here?

Michael: Well, I think, you know, so I think what we should really define is like, when should you hire a sales rep? Not like what time of year, right? We talked about that. I think ideally not in the summer. That's going to be too hard to hire or too hard to train. And maybe even harder to hire, just based on people might not be looking for job changes and stuff. But then like, how do I know when I need to hire a sales rep? Is it, you know, if I'm doing 20 estimates a week, it's like, man, probably need to hire another rep. Or is it, you know, do I hire a sales rep and even if I don't have the leads for them right now, but know that they're going to go out and generate their own leads, whether I'm looking to hire, you know, the third or fourth rep or the first rep, how do I know when I need to hire a rep? What are your thoughts?

Jon Bryant: How do you know I need to, I mean, well, when you have no reps and you have lots of leads, that's probably a good time, right, Mike? That's a, three reps, yeah, I mean, the way that we've done in the past is that we actually map out where our revenue goals are. We try to reverse engineer it a little bit. So we say, okay, if a good rep, like, you know, a good rep can do one and a half million dollars of sales. And we want to do, you know, four and a half simple math says we need three reps. And maybe one of the one or two of them isn't going to be, you know, top quality. So maybe they're going to do a million. The other ones does two, and then someone does 1.5. And so we kind of start mapping this out for like a future projection. And then we also reverse engineer that amount of leads that we need in order to make those positions work. So we haven't. Over the last few years really gotten in the position of being desperate because we got ahead of it. But I think when you do, when you find yourself like swamped with leads, good for you. That's an awesome thing to be like position to be in. But that's also a very difficult time to hire. So like thinking this stuff through, like January is coming up, you said you're planning your budgeting. Why not look at what that budget means and start reverse engineering a few things to help get ahead of it. Maybe if you're not ahead of it and you've got a lot of leads, yeah, great time to do that. If you find that you're better at production and bad at sales, look at hiring a salesperson, versus hiring a, you know, a production manager first. If you're finding you're bad at production, hire that production manager. Maybe you're the sales rep full time until you get to that next step of, I got, I got any more bandwidth here. But. I think to keep somebody busy, you're, you kind of have to have a company size around a million at minimum in order to start considering that. And then there's just kind of some environmental things that are going to impact it, but, yeah, how do you feel about that?

Michael: Yeah, I like that number. You know, I think for most business is around a million in revenue. Or at least like that's the direct, you know, they're trending in that direction in the near term. I think that is when you need a rep, right? Because at that point, the owner selling a million is a full-time job. Or pretty darn close. And so it's like that, that owner can't go and focus on the other parts of the business to. Scale to, let's say, $2 million if they don't get out of that sales role full time. So at that point, I think what it looks like for most business owners is you hire a rep. They're going to do maybe $750 to $1 million. Once your first rep expectations are probably a little lower in terms of your training processes and all that, the owner is probably going to go sell maybe $500 to $750. And that's your growth, right? So now all of a sudden you put those two together and you're at 1.25, 1.5. And that's great growth from a $1 million business. And then, you know, the following year, you're probably hiring another rep and the owner now, you know, let's say the top line revenue is 2 million goal. And your owner's probably only selling like two or 300,000 on just like relationships and, you know, just kind of like the easy stuff without a whole lot of effort. And you're letting your two reps sell again, somewhere in that million or just under range. And I think that is absolutely a doable plan. You know, and one that tracks really well to, to what our story looked like, whatever, you know, five, seven years ago or whatever, but.

Jon Bryant: Yeah, that's very similar to ours as well. It's kind of hard for me to remember that time at this point, but also, I mean, the first rap is always the hardest. Like, you know, trying to figure out how to pass off your knowledge, build systems, you know, track, not have them sell bad jobs. There's a lot to that and, you know, there's much more conversation we can have about that. But as, you know, in someone like your position now, I imagine the next steps are going to be you don't get a job out ad out probably on indeed LinkedIn. What are you, what are you using? Are those two?

Michael: Yeah, I mean, historically, we've always used Indeed. Yeah, I think we've leaned towards Indeed. I've seen that not working as well over the last year for all sorts of different hires as they've changed their algorithm. So I think we will post a job on Indeed. But I think the big thing for a sales role is trying to hire from the network. So we will let our network know, my friends, social media, and even like some of our like customer newsletter kind of stuff. We just like, you never know where you might find a good person. And this is a really good job. Like they're fairly highly compensated. You know, we were just talking right. Seven or 8%, you know, or even six to 8% off of one to one and a half million. I mean, you, you're seeing, you know, you're upwards of a hundred thousand. If not in year one, you know, typically by your two or so. And so it can be a good job. So yeah, those are some of the things that we'll definitely do. I'd like to try to avoid the Indeed hires if we can. But I do think this time of year, maybe people are looking to make a job change or a career change. And I think there can be some good people out there.

Jon Bryant: Totally. Once you get them in, you know, what are you looking for? I guess through the network, I mean, that's great. You know, I think a lot of times I forget that too, that we have networks and there's people looking for good jobs. I think a lot of people don't assume a lot of what we do until maybe they see the numbers. They're like, oh, wow, okay. That actually checks out. But so you get a few people in, you've got some people in your network, then what?

Michael: After they're hired or what's the interview process? What are you asking?

Jon Bryant: Yeah, I mean, how do you even select them from that batch of people on Indeed or...

Michael: Yeah. We've typically our interview process for sales reps has been about like four or five touch points, typically in person, you know, might be a little bit of zoom over the years, but so it's some combination of they're meeting with me individually. I like to have them meet with like the other members of the leadership team, operations manager, other sales reps, you know, office manager, just to like see how they interact. Typically, those are going to be like kind of friendly group conversations. We will order lunch and just say, hey, come on in. It's probably going to be about two hours. Spend about 45 minutes just hanging out with the team, laughing, having some lunch, just sort of like meet and greet. Tell us about yourself, what part of town you're in, nothing formal. But it's a really good way to just feel out like, is this person going to fit in with the group? And. And then, you know, as part of that meeting, I'll usually meet with them one-on-one as well. I also have liked taking people out on a sales appointment. So they can see the job and really get a feel for it. It also is like, I think, less formal conversation. You know, we're just riding together in the car and the truck or whatever, and just kind of chit chatting. And then I also get to see how they interact with the customer. And I don't expect them to be selling, per se, but I do expect them to be friendly, be able to interact in a professional way with the homeowner. And so I've historically liked doing that. We will do some profiling. Historically, we've always used the disk profile for pretty much all of our hires. And I don't see any reason we would change that. Reference checks. Yeah. So yeah, it's typically with a sales rep though, I like to take my time. I, you know, it's somebody who has a huge impact on our business. And to be honest with you, I hate hiring sales reps because like, if they're even decent, they come across great in an interview, they're really personable, they're fun to talk to, you know, they sell themselves well, you know, they know what I want to hear. But, and you, you know, when I meet with them maybe four or five times and I start to ask. Maybe similar questions in different ways, and I'm looking for consistency in their answers and in the stories and things like that. I've found over the years that I can usually maybe weed out somebody who's not genuine just by meeting with them enough times. So that's what we looked like.

Jon Bryant: Yeah, I mean, that's such a good point. I mean, like, yeah, anyone who's decent at has done sales at all is going to come off good. But man, the amount of people that we've hired, I mean, I'll take personal account of the amount of people I've hired that I've just liked in this role who can't actually ask for the sale is staggering. And so, you know, like doesn't mean good in this particular instance. And I think I have to be so careful with that. And so we, we do it differently in that, like we have several people interview them. They, they all, we do the ride along as well. We do the, the personality profile. Profiling, but end of the day, we, we kind of give them some pretty, pretty strict runway time. Look, here's our expectations. Can you do this? This is a hard job. You're going to do well if you're good at it, but this is a, this is a tough one. And if you're not prepared to ask for the work and you're not prepared to sell, let's not do this at all. And we're really frank about that. If you are, we'll work with you, but we got to see, you got to be able, you got to, you got to be tough, you got to be competitive, you know, nice just isn't going to cut it in this industry. So, but yeah, that's, I mean, it sounds like a great flow.

Michael: Yeah, I think one of the things that I always look for in the interview process is that, like, you know, are they hungry? So sometimes I will just like maybe take too long to get back to them in between, you know, interview steps or whatever, because I want to see if they're going to reach out, you know, are they going to send me a text message? And, you know, is it that they come across as, you know, professional and, you know, in a good way, right? Like, hey, just checking in, really excited about the job. You know. Looking forward to our next meeting opportunity. You know, can we get something on the calendar here for the next couple of days to keep the conversation going? Something like that is, is really well received by me. Where if they're just kind of like passively sitting back and waiting for me to reach out. That isn't, you know, might not be a good sign for things to come because like you just mentioned, you know, a good sales rep has to be hungry. They have to be aggressive. In a way though that's not like off-putting. And that's a tough balance for people.

Jon Bryant: Totally. Yeah, it's so interesting you say that because now that you mentioned that, that has been a part of our hiring process as well. So we try to build a couple of these little, I call them like mini tests in there that appear like they're just kind of standard. Standard parts of the interview process, but they're actually a test. And the first one is that we don't get, we don't call the person when we do our phone interview, we get them to call us. And so when we do that, we pick people we like, whether it's Indeed or through our network, and we say, hey, we'd like to chat. Can you please call us at this time? And here's the number. And we're looking for them to show up on time. Which is so critical for the sales process. Like it's really off putting for customers if you're late. Are they prompt? Then we're looking for, after that call, we're looking for them to send us an email. Can you just like recap the email for us of the three questions we asked you? Because we want to see their written communication. So we're like, okay, let's see if they can write because they got to write in this position. There's a ton of emailing, ton of stuff like that. And then we... What's the third thing we do? So the ride-alongs, we're trying to see how they interact with customers. Obviously that's important. We're looking to see how they dress for those ride-alongs without telling them. We actually do what you're also saying, which is that we don't get back to them right away on things and see if they follow up. And so we're trying to test all those skills that we actually care about through the interview process without telling them. And I'll tell you, what's interesting is that I've hired people who have called me too early and also late. I've like, I've gone against my own rules with that stuff. And surprisingly, they've never worked out. I don't know why. So I want them to like, now it's like, if you literally don't call the minute it turns the time we talked about, we're not hiring you. Anyone who's listening, who's applying for a job, you know, here's the secret.

Michael: I mean, at some point. Yeah. Well, I would say though, customers are the same way, right? I mean, I mean, there's, there's other painting companies locally that they can go with and, you know, do what you say you would do is a pretty good start. So say you're going to be here at two, show up in my house at two, or at least like shoot me a text or a call that says, hey, I'm going to be five minutes late. You know, those are kind of the only acceptable answers. Yeah, I don't, I don't, I think that's great. Yeah. I like it.

Jon Bryant: School in. So step three, so you know you're hoping to hire this person in January so you got a month and a half or so I mean you've got obviously some holidays around there. Once they come in the door what are you going to do differently this time around? Anything? Feel like your process are pretty good bringing them in?

Michael: Yeah, I mean, we've mentioned it before. I think so. I mean, again, it's changed a lot. But we've mentioned before is perhaps, you know, more focus on prospecting. Right away. You know, giving them more of the like not so great leads to go on and practice on. And I think too, like having lower expectations for. Maybe the first six months, I think somewhat we've gotten lucky that we've had reps get up to speed fairly quickly, but I don't know that that's the normal. And I think maybe my expectations are too high for that. And their first like three to six months, you know, first month is typically like 100% training by month two. I'm wanting them to go out and start making some sales. But the number and the amount of sales I think needs to be. Relatively low with maybe a little bit of a longer ramping up of that. Where historically it's been like, hey, by month three, you should be kind of pushing 100,000, which gets you on pace to be at a million. And maybe it's not month three, it's going to be more like month four or five. Obviously, the time of year matters, but yeah, you get the idea.

Jon Bryant: Yeah, setting your expectations a little bit differently. I think that helps also internally as business owners to be like, okay, well, this is the runway we have versus I think where I've gotten to previously, which is like, I need a result now. Like I hired you yesterday and you should have been selling the day before. Right? Like how did you not come here without a job sold? And so I think that puts a lot of undue pressure on us and them.

Michael: Yeah. And I think, I mean, obviously like you say that out loud, it like sounds a little silly, right? Most people are like, well, that seems ridiculous. But the reality is that this is an expensive hire. And, you know, especially for, let's say your first sales rep, you're around a million, like we were talking about earlier, you know, let's say you're paying somebody, I don't know, whatever $75,000 in total compensation. It's like, yeah, we can't, I can't afford for you to like, just learn and train for six months and me paying you. You know, half a year of a big salary, I need you to actually produce something. And so I would like to think that like, by like month three or four, they're at least covering their compensation and it's kind of a break even, or at least getting close to that. Because again, I think for most smaller businesses, somebody may be in that million range, like that needs to be the expectation because, you know, they might not have. Huge cash reserves where they can just allow somebody to learn for very long. You agree with that? Yeah.

Jon Bryant: Totally. Absolutely. Yeah. I mean, it's part of it too, is like by tempering your expectations a little bit. It's also planning for that as well. So like putting a little bit of money away, making sure that you've got that available. But yeah, I mean, it's a big, it feels like a big risk as a business owner and you have to sometimes making the Set your expectations lower helps because they can be exceeded when people come in. Like I've, again, like I've made every mistake in the book, but it's like, I had high expectations on some people and then they're not selling two weeks in and I'm like, well, I guess we got to let you go. It's like that wasn't helpful for anybody. And so learning to bring down my expectations and use that emotional intelligence better is like, it's been so helpful. That said, I mean, I've told this before too, like by day 60, if you're not seeing progression in some type, it's on. Of some type like IE a sale or good prospecting activity that's leading to relationships, leading to conversations. It's generally an indicator that this isn't going to be a fit, right? And so there's that like that mix of like, yeah, we got six months, but you got to be showing development and getting to that break even pretty quick. So, yeah.

Michael: For sure. Yeah, no, I agree. A hundred percent. I need you to get to at least like, you got to convince me within, six to eight weeks that you are the person that I want to invest, you know, money in for another two, three months while you're getting up to speed. And I think that's a good point too, is that like, one of the things I think we will do different is continually hiring for sales roles, and not. Getting complacent, not thinking, hey, we've got a good sales rep, so kind of pencil that in, but thinking all the time, similar to what we do with painters, we're always hiring for painters, even when we have enough painters, we're generally speaking always hiring. We might pause ads for a month or something just to whatever, not have to spend the time on it, but it is most your activity. Where a sales reps is usually like a project, right? It's like, oh, let's go hire a sales rep for the next six weeks. And then, you know, turn that up. We won't have to do that for the rest of the year. And I think going forward, that's going to change where it's like all year. I would like to be meeting with potential sales candidates, even if we don't have an opening to say, hey, look, like let's have lunch and, you know, start a conversation and it might be a, you know, six month interview process because we're not actively hiring right now. I can. I can see buildings that into our process and systems going forward.

Jon Bryant: Yeah, cool. Great. Well, Mike, I think now is as good of any a spot for us to end it, but lots of interesting stuff here. And I think we need to continue the conversation in lots of these areas. Dude, good luck with the search. I hope it, I hope you, hope there's salespeople everywhere. Just a untapped resource of salespeople that make it super easy. So, dude, it's super, you're going to, it's going to be great. I feel it's going to be awesome.

Michael: Thanks. Oh, no. Oh, yes. Super easy. It's always fun. Yeah, no, it's a good thing. I mean, it's yeah, no, it's you know, like we mentioned before, there's an opportunity to find somebody exceptional for our company. And, you know, reality is, we need to go hire two or three sales reps in the next, I don't know, three or four months. So I'll have a lot of experience, hopefully mostly positive that we can share in the future here. Hopefully somebody else can learn from that as well.

Jon Bryant: Beautiful, cool. All right, well on that note, I'll let you go. Thanks for the chat and to everybody listening, we'll talk again soon.

Michael: Yeah, man. Very good. Take care.

Jon Bryant: All right, see you guys, bye.