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> That is a reasonable margin, but only when your friend is willing to earn it. Can you please clarify what you mean by this? Are you saying that his 25% is re

> That is a reasonable margin, but only when your friend is willing to earn it. Can you please clarify what you mean by this? Are you saying that his 25% is reasonable as long as he takes on the risk of paying me, regardless of whether the client pays or not? > Paying for value now will serve you later. Can you please also clarify what you mean by this?

ddingus 7y ago
Yes. If it was just an introduction, that does not warrant an ongoing 25 percent. That kind of thing is what finders fees or referral fees are for. However, if your friend is leveraging his relationship with the customer, and he is carrying the risk, that does warrant an ongoing percentage. What I mean by both recognizing and paying for value serving you later is you will be participating in and learning from and how to do business at a higher level than just a simple client relationship. You too can cultivate relationships and you too can leverage them and carry risk and profit. Value takes many forms. And when you learn to see it, pay for it, later you also can do it, and ask for payment. Just the negotiation on this will benefit you. Make the case referral vs ongoing customer relationship and carried risk. You are happy to pay for the latter, otherwise there needs to be a cap on things as you will be doing the work, taking the risk and building the relationship. You should get all the income. Everything costs something. If he wants 25 percent, fine! You need to come to an agreement on what that pays for and all is well. And you need to make sure those things are real, so that your own time, appetite for risk and resources are otherwise free. If they are not, then your friend is not adding value and the 25 percent is a freebie, unreasonable. And maybe he can only add some value. That is fine too, maybe he takes 20 percent. That is the basis of negotiation right there. Think in these terms and more deals get made with better terms and fewer hard feelings, everyone adding value, doing work, making money. Make sense? Also, do raise your rates. Get a client that will pay them and then find a friend with whom you can make a similar arrangement. Take care of this friend to get your percentage cut. Does that also make sense as a future possibility? If it does, then you now have a basis for placing value on time you free up that goes beyond billable hours. That is the next step beyond mere contracting.
ddingus 7y ago
Also, by carrying the risk for you, there is an obligation for you to do solid work so that risk is minimized for everyone. Be prepared to make that commitment. It is all about balance.

ddingus 7y ago

Yes. If it was just an introduction, that does not warrant an ongoing 25 percent. That kind of thing is what finders fees or referral fees are for. However, if your friend is leveraging his relationship with the customer, and he is carrying the risk, that does warrant an ongoing percentage. What I mean by both recognizing and paying for value serving you later is you will be participating in and learning from and how to do business at a higher level than just a simple client relationship. You too can cultivate relationships and you too can leverage them and carry risk and profit. Value takes many forms. And when you learn to see it, pay for it, later you also can do it, and ask for payment. Just the negotiation on this will benefit you. Make the case referral vs ongoing customer relationship and carried risk. You are happy to pay for the latter, otherwise there needs to be a cap on things as you will be doing the work, taking the risk and building the relationship. You should get all the income. Everything costs something. If he wants 25 percent, fine! You need to come to an agreement on what that pays for and all is well. And you need to make sure those things are real, so that your own time, appetite for risk and resources are otherwise free. If they are not, then your friend is not adding value and the 25 percent is a freebie, unreasonable. And maybe he can only add some value. That is fine too, maybe he takes 20 percent. That is the basis of negotiation right there. Think in these terms and more deals get made with better terms and fewer hard feelings, everyone adding value, doing work, making money. Make sense? Also, do raise your rates. Get a client that will pay them and then find a friend with whom you can make a similar arrangement. Take care of this friend to get your percentage cut. Does that also make sense as a future possibility? If it does, then you now have a basis for placing value on time you free up that goes beyond billable hours. That is the next step beyond mere contracting.

ddingus 7y ago

Also, by carrying the risk for you, there is an obligation for you to do solid work so that risk is minimized for everyone. Be prepared to make that commitment. It is all about balance.