Serious question:

Say there was an organisation that was entirely dependent on external funding for its income, but that had freedom to expand into more commercial fields.

Say someone in that institution thought of hiring a ‘business development officer’ of sorts, whose role would be to locate potential grants and business opportunities for the institution, and who would work on straight commission of no less than 10%.

So, for example, if s/he managed to open up £500k worth of additional income for the institution, s/he would earn at least £50k.

S/he could pretty much work from home (or wherever), would have travelling (and other) expenses paid, and could potentially undertake the role even around other work (if s/he thought they could still make a serious ‘go’ of it).

Would this type of position have any appeal? What would the problems be? Would there be a decent candidate field? Or would people pretty much dismiss it as not serious?

Your thoughts would be appreciated.

From a selling side commission only works if there are lots of leads or the sales person aleady has the contact list to get them.
If as an organisation you can feed that salesman can you not convert the leads?
Why can’t you?
Some of this really depends on how much your putting out in order to get that commission

£500k of income over what period? Annually?

Via how many separate contracts?

Commission paid on resign or only new business (ie. do they have to get an extra £500k each year)?

How big is the market?

what’s the lead time on a sale?

As above – who’s generating the leads?

what are the competition offerign for similar roles?

Yes in theory. Obviously a job with a salary and a lower comission is less risky.

I think that income might be generated from two principal sources: 1) maximising income from the resources (i.e. estates) that the institution already has, and 2) identifying and securing relevant grants from a mix of private and government-based funds. With respect to grants, they exist and the institution is eligible, but there has simply never been the will nor the manpower to make locate them and make application.

A third potential source would be a matter of securing individual philanthropy – either targeted at a specific project, or for general institutional use – but this would obviously be less certain.

So the market is significant but as yet untapped. There is no selling involved per se; it’s more a matter of thinking creatively about how the institution’s not-insignificant resources can be made profitable and then enabling that to happen.

And finally, whoever was in the position would be able to draw commission from new and renewed streams. As long as the income was generated by them and not part of the institution’s normal income source.

As far as I know, no similar institution in the region has a comparable position.

We tried this when I was trustee of a charity. The candidates were students who wanted to fit it around their studies, which was fine, but they found it tough and inevitably prioritised their studies.

We didn’t actually get any funding from it and found that, given the remote working, the lack of investment on our part and the lack of structured focus (on our part as well as theirs), one of the students in particular did our brand some damage by ‘selling’ the wrong things.

Glad we tried it but it wasn’t for us.

I work for a company that specialises in consulting around sales force capability and sales strategy so hopefully I can help a little here.

The commission only model is almost always doomed to failure. The only time a sales person (and that is what you are looking to hire here, you can call it ‘business development’ and that is what most organisations call it these days, but without any doubt, that is ‘sales’), takes a commission only position is when they have no other choice and there’s usually a reason for that.

It’s not always the case that they aren’t any good; I’ve worked directly with three sales people who had fallen foul of situation and circumstance, who had previously been very successful but found themselves in a tight spot and had to take commission only. None of them worked out.

The main problem with commission only is that almost all the risk lies with the sales person. Generating revenue/income/opportunities etc all take time in a B2B environment (i would imagine at least three months in all B2B situations and in my industry – I sell also – it’s six months to 18 months).

What do you live on while you ramp up? How do you pay rent, eat, look after your kids etc? If nothing else, a commission only gig tends to foster very aggressive sales behaviour. It makes the sales person very focused on closing deals at all costs and that is usually bad for everyone else. The best sales people are able to act as ‘trusted advisors’ to their clients and offer genuinely valuable insights as part of the sales and engagement process. It’s very hard to suspend your own agenda if you’re working on commission only.

You will also potentially run into problems of minimum wage. You couldn’t employee them for instance, they would have to be an external contractor of some form. Then you’re into the outsourced sales model and they also come with their own set of challenges. How do you manage and support the sales person when they aren’t even an employee but their own agent?

If you want to have a chat in person let me know though, I’d be happy to talk things through with you (but rest assured I’m 99.9% sure that the company I work can’t help you so my personal agenda here would simply be to help rather than to sell you anything!)

I know of people who do just that.

We work with a 3rd Industry Provider, they were a sort of charity, rattling the tin and doing good, much needed work in the community, but these days it’s more of a case of chasing local and national government contracts to provide local services.

They’re quite an aggressive player (by the standards of charities, pussy cats compared to some commercial clients we have). They win a few new contracts a years, TUPE most of the existing staff working on the project from their current employers and cut what they don’t need, it makes my job unpleasant for me sometimes, but they’re totally relaxed about talking in ear shot of 10 nervous people saying “yeah, we’ll only need 8 for this room” so they know 2 will be for the chop.

All these people are salaried in-house people.

Alternatively we use an agency to find tenders for us to bid on, they charge a retainer to look for them and a flat fee for the bids – it’s a couple of hundred a month and maybe £300-£400 to complete the bid from a drop-down of stuff we’ve already given them, but our bids are pretty straight forward.

How would you fund the commission ? Say for example some of the external funding came with terms and conditions, I suspect spanking 10% on a finders fee might not be permitted ?

The commission would be paid for from normal institutional funds in order that any additional income with T&Cs attached would be respected.

The way the institution’s finances run is that money saved in one place can easily be reassigned elsewhere.

So, for example, if money came in designated for estates, money previously allotted to estates in the operating budget would then be liberated to pay personnel.