Didn't know where to put this, hence new thread.
I've been approached to work on a project but had to decline because I'm too busy. I introduced somebody else to the client. This person has now been awarded the project (he wouldn't have been in with a chance without my recommendation). We've agreed a finder's fee is appropriate. What's a sensible/fair level for this? I'm thinking 10% is about right. Value will be around £15K (all profit, no costs).
I think I would negotiate a contractually obliged introducer/finders/referral fee (and which party is to pay it) prior to making the introduction. After the event, what do you think you can get away with? Depending on the level of involvement you have had, and what the level of facilitation (initial and ongoing) is, would determine what might be reasonable. If you are doing nothing, and the project/work has no ongoing dependence on your involvement or compliance, then it would seem to me that you are unlikely to retrieve the value that you might have been able to ascribe to a contractual agreement prior to introduction.
There seems little point suggesting that, say, 5% might be appropriate, if the margin for the work is, say, 3%, and an additional cost of your fee has not been factored into the offer.
After the event the question would seem to be, 'how much of a cut are you prepared to give me, to retain my goodwill?'. I'm not sure that anyone can answer that better than you.
You might also want to check the tax position of that (is it VAT'able, where does that obligation lie).
An afternoon at ‘Spoons with as much damage as you do in 4hrs.
Are you expecting the person or the client to pay the finders fee? Either way, 10% sounds reasonable to me. Especially if there's a reasonable possiblity of futher work arising for the person that, presumably, you wouldn't expect to get another finders fee for.
10% seems reasonable to me too. He still does well from it, you both win.
I've paid 10% in similar circumstances before, when I freelanced, although all agreed up front. Slightly more difficult when the introduction's already been made.
Thanks chaps. Will go for 10% which I’m pretty sure he’ll agree to. Yes, there is a probability of more work for him coming from this initial intro. And in answer to Tricky, margin is 100% near as damn it.
If there's no cost (and therefore no time) involved, I would have definitely done it myself.
