How much is bringing in business worth?

[danb4026]

If I am partnering up with someone, with a similar skill set, but I am bringing in the job, what should my additional compensation be?

 

We will be tracking our hours and billing the same hourly rate accordingly. The only difference is that I provided the work. I was thinking that it should be a percentage of total billable and then the balance divided based on actual hours worked.

 

Any insights? What is a standard percentage? Anyone done this before?

[heni30]

I would think that there would be no standard formula since each job is so different. I, personally, would treat the 2nd party as a freelancer and negotiate payment for those services without divulging the overall project fee.

[Corey Beaulieu]

Are you "partnering up" if you are going to be keeping money from them or treating them as a hired employee? I feel that a partnership is about getting a greater volume of work done in a faster amount of time and sometimes this means that you get the client and sometimes they do. Sometimes you do more of the leg work and sometimes they do. If it's your first project I especially feel that this is a bad precedent to set, but at the same time feel that if the workload gets too lop-sided then it would be time to re-negotiate or break the partnership.

[danb4026]

Well, our long term intention is to partner up on a permanent basis. I have simply gotten too busy to handle all of the work on my own. He will be bringing approx. equal hard assets (ie computer hardware, software etc.) to the table. The main difference is that I am currently bringing in the work. I am sure that he will be bringing work from his past connections in as well, but it just hasn't happened yet.

 

Also, he is also only a few miles from me, so it is very convenient. I would like to work out a fair way to sort out the financial aspects.

[Scott Schroeder]

Like in Breaking Bad, partners are 50/50. It's one of the only ways to really avoid sticky situations, especially if he will be doing the exact same amount of work you are.

 

However, if you are finding yourself doing more client relations, sales, etc than he is then I would more treat him like a hired person and use an established pay rate.

 

When I have partnered up in the past we did both options. When I was simply brought on, or brought someone on, to help with a project, say modeling, then I worked for or paid an established pay rate. When I was brought on for the duration of the project and did at least (if not more) of the work (modeling, lighting, texturing, rendering, video post) then I took or gave 50%. But I must say, that at anytime I knew the person beforehand. We were able to sit down and discuss things.

[John Dollus]

Is your partner bringing anything to the table other than a similar skillset? I'm guessing there's some intangible value in the partnership other than labor or you would be subcontracting instead. Perhaps the other person has an existing client base or portfolio that has some value? If so, then what percentage of that contribution plays a factor in getting any new work? Is your partner providing hardware/software assets that you will both be using? If so, what do you feel is a fair lease rate percentage you should contribute? That justification is just as legitimate as establishing a commission based compensation structure on a partner level. From a business perspective, the path you are heading down is unadvisable if you are interested in a long term partnership.

 

good tips in this thread:

http://forums.cgarchitect.com/71166-partnership-success-stories.html

Edited August 6, 2012 by John Dollus

[Justin Hunt]

It would be a good idea to sit down with an accountant to work out a fair division of funds.

 

If you are bringing in the work and managing the client it also means that he would be handling more of the production work, which is just as valuable.

 

50/50

 

jhv

[Brian Cassil]

My experience has been that there are three ways to handle this:

 

1. Pay your associate as an employee (pay him a set salary). You are the sole owner, you make the profits and suffer the losses completely on your own.

 

2. Pay him as a consultant. Hire him on a project by project basis.

 

3. 50/50 split partnership. You share the risk and reward equally. This is the only fair method for sharing ownership. Even though you would be doing most of the rain-making he would be sharing the risk with you equally and is therefore entitled to an equal share in the profits. Besides that, most likely and very quickly you will find that the both of you are bringing work in as a team anyway. In which case one of you making more of the profits will create bitterness.

[pailhead]

Charge an hourly rate for all the management work (phone, email, all conversation etc after actually getting the project) charge an hourly rate for the production work, dip in 10%-15% into your partner's fee, for the finders fee - time and effort it took to find the project. It's not really a partnership then... but as long as your partner scrambles and brings in some work on his own and does the same thing it's a fair game i think.