Charging a Sales Commission

Do you add a sales commission even if you are a one-man shop?

[johntabita]

This question is for those of you who double as both designer/developer and salesperson.

If I bid a project at say, 40 hours, I will bill it out at $2.00/hour and pay myself $1.50/hour (I'm using ridiculously low numbers to prevent talking about prices). The "company" keeps the remaining .50 cents to pay bills and (hopefully) make a profit.

My partner would receive a 25% commission on each project he brought in, but he's transitioning out of the company. Now that I'll be doing all of the sales, it makes sense to continue with this pricing structure and pay myself a commission as well as a production salary.

My reasoning is this: At some point I may decide to contract out the production work and only sell. Without a sales commision built in, I've just cut off my only income stream. On the other side, if I were to hire a salesperson, I'll have to immediately increase prices to cover his commission. So why not build it into the cost right now?

I'm also considering the same thing for administration/project management, maybe 10% of total development hours.

Does anyone else do something similar, or are you considering it?

[nycweb2222]

I pay myself a fixed salary a month. I didn't really break it down like you.

If you're the boss, you can pass yourself whatever you want.