ADVISOR PAY PLAN

[Tom]

Larry DAUGHERTY wrote:

> I’m looking to change our company wide pay plan for service advisors. My

> thoughts are to put the advisors on a gross profit sales for labor and

> parts. I’m trying to decide what my comp as a % of gross should be. My

> thoughts are the more they sale the better it is. Anyone have a pay plan

> like this? Any help is welcomed thanks.

The plan that we used is a base, plus an incentive based on gross sales, then adjusted by parts GP. But, I’m guessing that your SA’s cannot determine GP.

Regardless…we start with what percent of gross sales, not GP, that we can afford to budget as SA pay. Then it’s a matter of working the numbers backwards to determine what percent of gross sales, or in your case GP, that they can be paid.

[edcar70]

I give mine 4.5 % of gross sales for the whole shop and an extra 1.5 % when I’m gone goofing off. seems to work out pretty good. ed

[davesgarage]

I have seen SAs get paid very well on a percentage of gross when the shop actually found no profit and lost money on jobs. I pay salary plus bonus based on the following formula. Gross sales, minus sales tax, minus cost of sublet, minus cost of parts, times .75 = 7.5% of gross profit on controlable profit margins. Cost of labor is not really controllable by the SA, but they of course can sell more.

[douglas hillmann]

My SA is paid on % net profit after parts and breakeven point is met. If he does not meet the break even point does not bonus. It is human nature to figure out how to make things the best for me. So you need to make sure while they are not doing that the owner is not left out in the cold. My system only works if the owner is making sure all his percentages are in line. It is not set it and forget it.

[Raymond Wittneben IV]

SA wants to make 50K a year (Gross pay), they better sell me 50K in sales a month, they want 100k a year in pay, they better sell me 100k a month in sales, & vice versa, they only make 20K a year if they only sell 20K in sales a month, but they won’t be here long then.

There are minimum levels of acceptable performance that must be met each month, cost of parts, cost of labor, sublet, etc.. need to be in line so the shop doesn’t get ripped off.

But it’s pretty basic, comes out to about 7.5% of gross sales (this 7.5% is there gross, all benies included)

[Unknown Member]

Tom helped us set up a SA pay plan system that has worked very well. It is very fair for both the employee and the shop. Contact him and you wont regret it.