Thanks for clicking the link to learn more about the secret pay system that I talk about. I will be making a video to explain this information however in the meantime I’ll just explain it here.
So what I learned over the past 10 years of employing admin staff to work in my business is that hourly wages only work if you are physically around to keep an eye on and motivate them. Don’t get me wrong, I have had some excellent staff working for me over the years and they helped me grow my business to the size it is today, but what I found is that when I was not around all the time productivity would slowly drop off. I don’t blame them, it’s just a natural instinct to slack off if your income is only motivated by time.
Separating the Roles
If you haven’t done already the first thing you need to do when hiring people to help manage your DJ business is to separate the roles. This means, all the tasks involved in running the business need to be separated into different roles for different people. Why? If you have already been running your business for a while you should know the answer to this question. Trying to do everything all by yourself can be overwhelming and sometimes even confusing as you try to prioritize your time between follow up new leads, taking care of booked clients, and developing the business. As a business owner you really want to focus on developing the business and to do that first you need to assign all other tasks to other people. Now aside from being the business owner and developer, there are two main roles in managing a DJ business, and they are the Sales Rep and Event Manager.
The Sales Rep’s job is to follow up on all the inquiries, following up by phone and closing the sales, answering peoples questions and objection. The need to follow up promptly and not have any other distractions.
The Event Managers job is to confirm the bookings each week, review customer music plans, send out invoices and collect payment, and ensure DJs have all the information they need to do the job.
Pay Staff According to PerformanceOkay so now you have separated the roles, you now need to find a way to pay your admin staff that is not directly linked with time, but with performance. How will you do that? Well I’ve figured out a way that has been tried and tested, and it works.
Okay so as a Sales Rep, if you are on an hourly wage you are not really motivated to close sales, so what you need to do is pay them a percentage of sales. This can either be a percentage of the profit, or a smaller percentage of the gross sales. In my business, I found that what works best is paying my sales guy a percentage of gross sales. I don’t even pay a base salary, literally just a set percentage in my business it’s only 5%. Now this may seem small, but it works out that my sales guy is getting paid an average of $30 per hour and that can fluctuate depending on his performance. I don’t pay a percentage of profit because the sales he makes are for events sometimes months and months into the future, so as the DJ for them events has not yet been paid it’s hard to know the actual profit. The problem with paying by gross sales however if on the rare case you get a sale for example $400 and end up having to pay another DJ $400 then you don’t make anything and your sales guy gets $20, but this is rare.
Now the beauty of paying your sales rep on commission only is that they are now DIRECTLY motivated by the productivity of the business. Plus you don’t have to watch over them anymore, they can work from home and all you need to do is make sure that the sales conversion rate is keeping up to your expectations.
So for the Event Manager, their role is slightly different. Their pay should not be tied with the value of each booking, but the quantity. Therefore I pay my Event Manager a set amount per event, this could be anything from $10 – $30 per event, this depends on yourself, how much you charge, and how much time you think it will take of the Event Mangers time on average per event.