Running Your Sales Agency Day to Day

Winning the agency is the start, not the finish. Once you are up and running, the difference between an agent who thrives and one who struggles often comes down to the unglamorous things: keeping a reliable car on the road, invoicing and chasing your commission, staying in touch with your principals, and planning your journeys so your time goes on selling rather than driving. This covers the day-to-day habits that keep an agency healthy. Winning the agency is covered separately; this is about what comes after.

Your car

Your car is a working tool, and one that lets you down costs you money: a breakdown that makes you late, or forces you to cancel an appointment, dents your credibility with customers. At the same time, an expensive, thirsty car with high running costs can sink an agency in its early months. The sensible approach is to run a clean, well-maintained car you can comfortably afford now, and wait until the agency is established before treating yourself to something grander. Plenty of agents end up running better cars than their employed counterparts; they simply wait until they can afford to. Do make sure your insurance covers business use for commercial travelling, which these days rarely costs any extra.

Ways to finance a car

• a personal loan
• hire purchase (HP)
• personal contract purchase (PCP)
• leasing, or personal contract hire (PCH)
• a credit card, for a short period only

In the early days, lean towards options that avoid long, heavy commitments, and look for an agreement with low early-repayment penalties so you can clear it if a good year allows. If you are leaving an employer, it may be possible to take over the car you currently drive, assuming it is in good condition.

Invoicing and chasing your commission

Getting paid is the most satisfying part of the job, and the part you must stay on top of. Some principals run a self-billing arrangement, where they raise the commission invoice for you (usually for VAT reasons), but most will expect an invoice from you. Keep your own record of every order placed through you. Your written agreement should require the principal to notify you of all commissionable orders placed directly with him in your area, usually as a monthly statement, which you check against your own records and invoice accordingly. When commission falls due depends on your agreement; a common arrangement is the end of the month following the month of the order.

Chasing late payment

Never let a late commission payment slide. Chase it, politely but firmly. Your invoices are your wages and your expenses. Remind the principal, if you have to, that if he paid his own employees’ wages this late he would soon be looking for new ones, and that you are no different. An agent who lets payments drift only trains a principal to keep doing it.

Managing your money

You dealt with budgeting and cash flow when you set up; the job now is to keep an eye on it. Half an hour a month checking your progress against your forecast is plenty. Do not let it become an obsession, but do not ignore it either, because the earlier you spot a problem the easier it is to put right. Set a regular time each month, when your bank statement arrives, to work out what you need to pay and what is coming in to cover it. A simple two-file system, one for bills to pay and one for bills paid, keeps you on top of things. If money is tight in a particular month, pay what you can, tell the supplier when the rest is coming, and stick to that. Never simply ignore a bill you cannot pay.

Keeping in touch with your principals

Silence is the fastest way to make a principal doubt you. If he does not hear from you for weeks, he assumes you are not working his product, however hard you are actually grafting. Keep in regular contact, and as a matter of courtesy let every principal know if you will be away, on holiday or off sick. Even when orders are thin, get in touch and talk through how the two of you might lift the business together. Regular contact is not box-ticking; it is what keeps a principal on your side.

The monthly report

Any business-like principal will want a monthly report on activity in your area, and though it can feel like a chore, remember that he needs it to plan his production, stock and finances. Give him a useful outline: your read on market trends, the orders in the pipeline, the business you are negotiating. You do not need to hand over your contacts in detail. It is enough to say you expect an order worth around £500 from XYZ Ltd, rather than naming the buyer you are dealing with. Resist any attempt to make you report daily or weekly, though reporting on a specific project the principal has asked for is fair enough. He is trying to help you, and you are trying to help him.

Planning your journeys

When you were employed, journey planning was easy to neglect. Now that you pay for the travel yourself, it matters a great deal. A well-planned round maximises your selling time and cuts your expenses at the same time. How much you rely on appointments depends on your trade: in retail selling, being expected at a regular time each month matters more than a formal appointment, while for capital goods such as machinery, appointments are essential. Set a fixed time each week to phone ahead and make appointments with new prospects. Knowing that the person you need to see will actually be there when you arrive is money in your pocket.

Protecting your legal rights

As a commercial agent you have real rights under the Commercial Agents Regulations, and the records you keep day to day, your order records, your invoices and your correspondence, are exactly what let you enforce those rights if a dispute ever arises. Keep them properly, month in and month out, and if a disagreement over commission or termination does arise later, you will be glad you did. For the detail of your rights on commission, termination and compensation, see our legal articles.