Most trades company owners have no sales budget. They have a marketing budget, which is whatever the lead-gen platform and the website guy invoice each month, and then they sell everything themselves in the truck between jobs. When the company hits about a million in revenue, that stops working, and the owner starts asking what it would cost to have someone else do it.
The honest answer is that sales costs more than most owners expect and less than they fear, as long as you measure the right thing. The right thing is cost per closed job, not cost per lead and not the salary line.
This article gives you the rules of thumb, the real numbers behind a hire, what a retainer plus commission model looks like, and a worked example for a $1.5M company that wants to get to $2.5M.
Rules of thumb for percent of revenue
The standard advice is to spend a percentage of revenue on sales and marketing combined. The number depends on what you are trying to do.
| Goal | Sales and marketing as percent of revenue |
|---|---|
| Hold steady, mostly referral and repeat | 5 to 7 percent |
| Grow 20 to 30 percent a year | 8 to 12 percent |
| Break into commercial or multifamily accounts | 10 to 15 percent for the first two years |
| Launch a new service line or territory | 15 percent or more, temporarily |
A $1.5M company at 10 percent has $150,000 a year to spend across everything: the website, the lead platforms, the Google profile work, the truck wrap, and any actual sales effort. Most companies at that size put all of it into marketing and zero into sales, which is why the phone rings with $300 residential jobs and nobody is calling the property management companies.
In our experience, once a company is past $1M, the split should shift toward sales. Marketing brings in the small stuff. Sales brings in the accounts.
Cost per lead versus cost per closed job
Lead platforms train owners to think about cost per lead. A $40 lead sounds cheap. It is not cheap if you close one in eight and the average job is $350. That is $320 to close a $350 job.
Cost per closed job is the number that matters. Take everything you spent on sales and marketing in a month and divide it by the number of new jobs you closed from that spend. Then compare it to what those jobs were worth.
Two examples from the same pressure washing company:
- Residential from a lead platform. $2,400 a month in leads, 60 leads, 9 closed, average job $425. Cost per closed job $267, or 63 percent of first-job revenue. That only works if those customers come back every year without being resold.
- HOA and multifamily from outbound sales. $4,000 a month in sales cost, 4 accounts closed over the quarter, average first job $3,800, with a signed annual agreement. Cost per closed account $3,000, or 79 percent of the first job, but the account is worth $3,800 a year for three or more years.
The second one looks worse on the first job and is far better over two years. That is why you cannot judge sales spend on a 30-day window, and why the cheapest lead source is often the worst investment.
A good rule of thumb: keep cost per closed job under 15 percent of first-job revenue for residential, and under 25 percent for commercial and multifamily where the account repeats.
What a sales hire really costs
The base salary is the smallest surprise. Here is a realistic all-in for a full-time outside salesperson in a mid-sized market:
- Base salary: $50,000 to $65,000
- Commission at plan: $30,000 to $50,000
- Payroll tax and workers comp: about 10 percent of wages
- Benefits, if you offer them: $6,000 to $12,000
- Vehicle or allowance, fuel, phone: $9,000 to $14,000
- CRM, email tools, list data: $2,000 to $5,000
- Your time managing them: real, and rarely counted
That lands between $100,000 and $145,000 a year for a rep who hits plan. Then add ramp. A new rep in a trade they do not know takes three to six months to produce, and the first year is usually a loss on paper.
The bigger risk is not the cost. It is that most trades owners have never hired or managed a salesperson, do not have a sales process to hand them, and end up with an expensive person who waits for leads. If you are going this route, read how to build a sales process for field service before you post the job, because the process needs to exist before the person does.
What retainer plus commission looks like
The alternative is an outside sales operator on a retainer plus commission. This is a person or small company that runs your outbound, works your pipeline, and gets paid a monthly fee plus a percentage of what closes.
A typical structure in our experience:
- Monthly retainer: $2,500 to $5,000, covering the outreach, the calls, the pipeline management, and the reporting.
- Commission: 8 to 15 percent of first-year revenue on new accounts they source and close, sometimes with a smaller trailing percentage on renewals.
- Term: 90-day initial commitment, then month to month.
- Tools and list costs: often included, sometimes passed through.
On a $1.5M company that is $40,000 to $70,000 a year all-in at a reasonable close rate, with no ramp, no vehicle, no management overhead, and a process that comes with the person. The tradeoff is that the retainer is not an employee, so you do not own their time, and if they are not producing you should be able to tell within a quarter.
We compared the two models in more detail in fractional sales manager vs hiring. Short version: hire when you have a process, a manager, and a territory big enough to feed a full-time person. Retain when you have none of those yet.
How to know if it is working in 90 days
Ninety days is long enough to see the shape of the result and short enough to stop before you waste a year. Set these checkpoints on day one and hold to them.
Day 30: Activity. You should see the raw work. Number of accounts researched, number of contacts reached, number of conversations, number of walkthroughs or site visits booked. If nobody can give you these numbers, nothing is happening.
Day 60: Pipeline. Named accounts with a dollar value, a stage, and a next step with a date. Not “we have some interest.” A list you could read out loud. For multifamily, in our experience 15 to 25 real opportunities by day 60 is healthy for one person working one metro.
Day 90: Closed and forecast. First closed jobs from the new activity, a cost per closed job you can calculate, and a forecast for the next quarter that is based on the pipeline rather than hope. Compare cost per closed job to your target. If it is within double the target and trending down, keep going. If it is five times the target with no trend, stop.
The one thing to be careful about is judging commercial sales on closed revenue alone at 90 days. Multifamily accounts take 60 to 120 days from first contact to first job. Activity and pipeline are the leading indicators. Closed revenue is the lagging one.
A worked example for a $1.5M company
Say you run a $1.5M gutter and pressure washing company. 85 percent residential, 15 percent from two HOAs that found you. You want $2.5M in two years and you want more of it to be recurring.
Budget. At 10 percent, you have $150,000. Today it all goes to marketing: $48,000 on lead platforms, $18,000 on the website and Google profile, $12,000 on the wrap, yard signs, and mailers. That is $78,000, and the other $72,000 is you selling in the truck for free.
Reallocation. Cut the lead platforms to $30,000, since the worst-performing $18,000 was closing under 10 percent. Keep the website and local SEO at $18,000, because it produces the cheapest residential jobs you get. Put $54,000 into outbound sales for HOA and multifamily.
Structure. $3,500 a month retainer plus 10 percent commission on first-year revenue of new accounts. $42,000 in retainer, and at target the commission is roughly $12,000.
Target. Twelve new HOA or multifamily accounts in year one, average first-year value $10,000. That is $120,000 of new revenue in year one, almost all of it renewable.
Math. $54,000 in sales cost for $120,000 in new revenue is 45 percent of first-year revenue, which looks terrible next to a residential job until you see year two. Renew nine of twelve, add twelve more, and year two is $210,000 on the same $54,000 spend. By year three the recurring base does the heavy lifting, and cost per closed account drops under 20 percent of annual value.
Checkpoints. Day 30: 120 properties researched and priced, 40 conversations. Day 60: 18 named opportunities worth $180,000. Day 90: 3 closed, $28,000 booked, 20 in pipeline. If those numbers are half of that, the model may still work but the territory or the offer needs a look. If they are a quarter of that, stop and figure out why before you spend month four.
That is the whole exercise. Set the budget as a percentage, shift it toward the work that produces accounts, pick a structure you can afford to run for 90 days, and measure activity, pipeline, and cost per closed job in that order.
Where Intrepid fits
We run outbound sales for field service companies on a retainer plus commission basis, with the process, the research, and the reporting built in, so you can see the day 30, 60, and 90 numbers without having to build them yourself. Read how it works at /sales, or book a call and we will run this math on your company.