Finders fee
Finders fee
(OP)
I am starting an consulting firm with a partner. We are trying to determine the appropriate way to reward bringing in the work. We will both be bringing in work and performing the work. What is typical reward for partner that brings in a project. 10% of the project fee?





RE: Finders fee
Should you get repeat business, it gets messy on who would get the finders fee for the 2nd, 3rd, 4th time they hire you. Does the person who initially brought them in get 10% for every repeat client or is it a one time only deal?
I've heard that businesses usually lose money the first year, so I wouldn't be paying any partner 10% off the top until the firm made some money!
The arrangement you are describing above sounds ethical, but I'll also mention that giving kickbacks to outside people (architects, building inspectors, etc) may or may not be ethical depending on who is paying the job and the disclosure you provide. But your arrangement seems ok.
RE: Finders fee
I assume you are both going to be 50% shareholders in the company? If so all that matters is how the company does.
One of you might bring in more work but you will both have to do the work, you will also need to perform many tasks that do not bring in direct revenue, bookkeeping, IT, etc. Do you pay one of you "extra" to do that as well?
If you both go in thinking what is best for me and not what is best for the company I think you will find it causes a lot of problems and will also mean the company doesn't last long. If you want to go down the what is best for me road form two separate companies.
RE: Finders fee
"If you are going to walk on thin ice, you might as well dance!"
RE: Finders fee
One thing that wasn't mentioned or asked is this a full-time business or a part-time moonlighting business? If it is a part-time effort, do your current employers know about your new business and are you sure there is no conflict.
"Wildfires are dangerous, hard to control, and economically catastrophic."
Ben Loosli
RE: Finders fee
What does that have to do with the OP's question?
RE: Finders fee
I think you should look at incorporating or splitting the blankets while you still like each other.
David
RE: Finders fee
RE: Finders fee
At times you will both feel as though the other is doing more or less work. Some clients will like one of you over the other as well. You have to have complete trust in your partner(s) to get anywhere with your consulting firm.
CDG, Civil Engineering specializing in Hillside Grading in the Los Angeles area
http://www.CivilDevelopmentGroup.com