11–20 of 35 posts
When the site goes down at 2am, who gets called?
Once the design is finished, will he be doing anything?
Does this deal apply equally to clients that don't need design work?
Does this deal apply to clients he doesn't refer?
Does he get 50% of the deal or 50% of the company?
Regardless, a 50% "finder's fee" is ridiculously high..
The easiest way to handle this when you don't have any investments, no professional liability or other complications, is simply that you set each your own individual sole proprietorship. Your friend, as he handles the administration, bills the client, and you bill him. Your agreement should likely be that you get paid when he does. This way, if things turns sour, you only stand to lose what your friend owe you - ther…
Are you suggesting sole proprieterships and then have a contract between myself an him. My main issue is I want some way to tie us together (actually mostly so I have "deadlines" I have to meet) and to make sure the 50/50 agreement is protected somewhat. Im certain he wont screw me (I've known him for 3 years - he's a bit pompous and a sometimes difficult to work with but definitely not someone to take advantage at all) but I wouldnt walk in with no guarantee. :)
Thanks for thoughts on the rates - I had some nagging doubts on that side of things. The £25/hr is more from fixed prices we figured we would have for the first few jobs (which are specced out) and their budget is fairly low. But your right about underselling in the future - is it better to bill hourly (and give an initial hours estimate) or agree a fixed cost in advance do you think (Im thinking former)?
Thanks for the great feedback :)
50/50 splits always make me nervous. When the site goes down at 2am, who gets called? Once the design is finished, will he be doing anything? Does this deal apply equally to clients that don't need design work? Does this deal apply to clients he doesn't refer? Does he get 50% of the deal or 50% of the company? Regardless, a 50% "finder's fee" is ridiculously high..
The idea is 50/50 on any money regardless (after costs - i.e. my travel costs) - I guess that is very vague and your right... I do need to nail that down into an agreement.
He does have some technical knowledge so will be working on HTML aspects (but has no real knowledge of backend programming meaning Im needed for that). The work will be fair - I've already spoken about that. Yes he might be doing a bit less but (as I mention below) I cant find the clients. He is also in the same city as said clients so he would be the one meeting in person for the most part.
50/50 for the finders fee is quite high but I dont think it's fair to call it that as I couldnt get the contracts w/o him onboard and I wouldnt have the time to make the contacts
This is pretty much his gig - he could probably contract me the work for a lot less but Im not so happy with such an arrangement. 50/50 sounds like an OK deal to me. We have agreed a hrly limit for my work....
In terms of "after completion" work - this is something we agreed to discuss. I think our initial idea was some form of optional agreement with the client to charge a fixed rate for maintenance and whoever does the work gets the money.
What would you consider a fair split?
50/50 splits always make me nervous. When the site goes down at 2am, who gets called? Once the design is finished, will he be doing anything? Does this deal apply equally to clients that don't need design work? Does this deal apply to clients he doesn't refer? Does he get 50% of the deal or 50% of the company? Regardless, a 50% "finder's fee" is ridiculously high..
The agreement you have should reflect how well you know the person, how well you trust them, and what the worst case scenario is. I'd suggest you almost certainly want lawyers involved in this part as they can give you a fairly boilerplate agreement that's tailored around the 4 or 5 key questions that you'll need to think really hard about. Bear in mind that in a partnership, rather than a limited company, you have f…
If you need lawyers at this state, you're doing it wrong (specifically starting up with the wrong person)
The need for lawyers has nothing to do with how much you trust the person-- the key factor is the amount of money, and your willingness to walk away from it.
If the sum of money involved (now, or in the future) is large enough that you don't want to be able to get screwed out of it, lawyer up.
The people you trust today might just turn out to be untrustworthy somewhere down the line-- you never know.
The easiest way to handle this when you don't have any investments, no professional liability or other complications, is simply that you set each your own individual sole proprietorship. Your friend, as he handles the administration, bills the client, and you bill him. Your agreement should likely be that you get paid when he does. This way, if things turns sour, you only stand to lose what your friend owe you - ther…
My impression is that your friend is trying to profit from your hard work. I don't see the amount of time as being 50/50. So you need to factor in whether his contribution is worth the 50%. In my experience you'd pay 5% for an introduction. 15% - 25% for the invoicing, collecting, account management. So really depends whether the design work is worth 35% or more.
Another arrangement is that you get back to him and say, that if he makes the introduction, you take on the client and pay him a commission of 15% and bill the design work to the client and keep 15% for admin costs.
A partnership or company is the last thing that I would suggest. Too many things can go wrong over time. Believe me, it took me 4 failed companies before I realised that it's impossible to reconcile expectations, especially when people have jobs, social life and other ever-changing issues in their lives.
Good Luck!
I'll echo what others here are saying - don't split things 50/50 (or by any percentage, really). Everyone on the project should have a bill rate.
I'm a consultant on a few projects that are structured this way, and it seems to really work well.
The easiest way to handle this when you don't have any investments, no professional liability or other complications, is simply that you set each your own individual sole proprietorship. Your friend, as he handles the administration, bills the client, and you bill him. Your agreement should likely be that you get paid when he does. This way, if things turns sour, you only stand to lose what your friend owe you - ther…
Hi this interests me - LLP seemed a good approach but your comments make sense. Mind if I ask some more. Are you suggesting sole proprieterships and then have a contract between myself an him. My main issue is I want some way to tie us together (actually mostly so I have "deadlines" I have to meet) and to make sure the 50/50 agreement is protected somewhat. Im certain he wont screw me (I've known him for 3 years - he…
The easiest way to handle this when you don't have any investments, no professional liability or other complications, is simply that you set each your own individual sole proprietorship. Your friend, as he handles the administration, bills the client, and you bill him. Your agreement should likely be that you get paid when he does. This way, if things turns sour, you only stand to lose what your friend owe you - ther…
Hi this interests me - LLP seemed a good approach but your comments make sense. Mind if I ask some more. Are you suggesting sole proprieterships and then have a contract between myself an him. My main issue is I want some way to tie us together (actually mostly so I have "deadlines" I have to meet) and to make sure the 50/50 agreement is protected somewhat. Im certain he wont screw me (I've known him for 3 years - he…
There IS no guarantee. Simple as that. Your guarantee is that you (and him - this also goes for the client) get paid often enough, that if its turns sour for whatever reason, and you can't get the money, you can walk away. This is also a good motivation to follow an agile methodology, where you deliver value early and often.
The agreement you have should reflect how well you know the person, how well you trust them, and what the worst case scenario is. I'd suggest you almost certainly want lawyers involved in this part as they can give you a fairly boilerplate agreement that's tailored around the 4 or 5 key questions that you'll need to think really hard about. Bear in mind that in a partnership, rather than a limited company, you have f…
If you need lawyers at this state, you're doing it wrong (specifically starting up with the wrong person)
The reason we have lawyers look over documents is that they write these types of documents everyday and they can tell if you've missed anything.
This comes in handy when a dispute arises or some other unforeseen event.
Joel talks about this on the Stackoverflow podcast when they discuss using a lawyer to review the FogCreek office rental agreement.
The gist of it is that when lawyers talk about problems( ie a tenant paying his/her rent late) then its' just lawyers talking, but if a tenant broaches this subject with the landlord then suddenly it's confrontational as the landlord is now wondering if the tenant is asking this because they plan on not paying,etc.
You should have a lawyer look at most contracts you sign.