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fastfingers

Recent Proposal I received

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I was approached by another business owner today who proposed a JV of sorts. Some of his clients are contacting him for social media services, he has no knowledge in this area and would like to partner with me. He wants this to become a bigger part of his business.

 

I have never been approached like this so I would like some opinions and guidance.

 

I was thinking of a referral program. Wherein he receives a percentage of the initial contracted amount. I do not currently have such a system in place so I don't know how this works.

 

What do you think? Any suggestions are welcome :)

 

Thanks everyone!!!

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Erin,

 

What I have heard before, and all I would be comfortable with, would be say a referral fee of 10% of the first month of the contract but only if they sign on for a minimum amount of hours.

 

My fear with your comment of "he has no knowledge in this area and would like to partner with me. He wants this to become a bigger part of his business." would be a loss of control on your part since you and only you have the skills to manage these clients. If this were a VA firm that was established and used to working virtually and wanted to subcontract you then my answer would be different, but I don't suspect that is the case.

 

 

 

 

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Erin,

 

In many joint ventures, each partner does a portion of the work and receives a corresponding percentage of the profits. It sounds like he wants you to do all the work and then he will take a cut of your profits, as if you were subcontracting for him.

 

Paying a finder's or referral fee is more appropriate. Whatever you do, get your agreement signed and in writing, even if it is only agreeing to a trial period.

 

Debbie Lynn

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Partnering is dangerous. Better if he hands the client off to you and you give him 5% each time you get paid from the client (or some agreed upon figure) if he wants to do recurring revenue - which is attractive over a one time "finders" fee.

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