By Joseph F. Schuler Jr.. JP Maguire Associates joined the ranks of the large remodelers this year based on volume, with its 60 employees producing $8 million in sales. When he was awarded Big50 in 1989, Jim Maguire had just finished a $2.5 million year doing insurance restoration and remodeling work. The company, now based in Waterbury, Conn., only does insurance restoration, cleaning, mold remediation, and building envelope drying. It covers all of Connecticut and has divided the state into four sales/production territories. When deciding how to grow, Maguire opted out of a franchise when he realized he was looking for an outside force to resolve internal problems--namely cash flow and gross profit issues. Instead, he looked for an in-house fix. He started to attach gross profit targets to a sales commission system--and he did so with positive results. "It got the salespeople and production managers to focus on what I wanted: gross sales, gross profit, and cash flow," he says. The system initially paid a straight commission of 15% of the gross profit of each job produced to salesmen and production managers who worked solely for that commission. The four salesmen and four production managers were teamed for each territory. The system wasn't the panacea Maguire was looking for, although it worked well for years. Maguire re-examined the program once he learned "you could do a lot of 20% GP jobs and the company could go bankrupt." Plus, territories became an issue. If one was slow and another busy, and production crews were moved, then the salesman and the production manager for the slow territory wouldn't make money. It set up unhealthy divisions. Now, Maguire has put three new production managers (who replaced two who left) and two new salespeople on a salaried system, with an "owner's discretion" bonus. The remaining five commissioned employees now have a sliding commission scale, based on gross profit, so that jobs with low gross profit margins don't pay out big commissions. Moving crews around territories is less of an issue because most production managers are now salaried. "I don't like just a straight salary," Maguire says, "but the answer, which we haven't found yet, is some kind of salary/bonus system."
