[saslandscape]

I'm a landscape designer (my first post on this site), and refer 80% of my clients to a small landscape company because I like the work they do. The owner of the company wants to pay me a finders fee, but I have no clue how much to charge. Do I charge a flat fee or a small percentage of the profits, or total cost?

[saslandscape]

Does anyone have any suggestions? Thanks!

[Dot Pecson]

In the copywriting arena, I believe people often at least offer 10% to !5% of the first job's fee, to whoever referred the client to them.

This is how I operate - 15%. Seems the least I can do for a good referral.
Dot

[saslandscape]

Dot, thanks for the reply and your idea sounds great. I was actually thinking of doing a percentage as well- might be a lot easier to figure out with each client. I had one landscape company, a year ago, offer me 6% and didn't know if that was a good figure, but 10-15% sounds resaonable. I'm going to be having a meeting with the owner, hence the reason I need a ball park figure to offer him.

[trees]

I have given referral fees to a couple of designers to the tune of 10% of the first job.

Just so you know, I build this amount into my quote. We have to make a certain amount off any install. Giving away 10% of that amount isn't an option, so we add it on. Not that you should care how the contractor gets the money to you, but that's the way we do it.

[saslandscape]

No that makes a lot of sense because then the contractor doesn't have to come out of pocket, so to speak because it's absorbed into what the client pays him. I'm going to propose that idea to him.

[Stonehenge]

But trees raises an excellent point - you don't know how much the fee is going to be until the contractor has his bid together - so there has to be some sort of back and forth on that each time, or some way for you to get the bid info from them, so you know how much to expect for payment.

And sas - I notice you first posted in the AM and then again in the early afternoon - remember that this is unlike MySpace or Facebook, filled with many unemployed people with not much to do but surf websites - most folks here are putting in lots of hours in their profession, so it may take awhile to get a response you're looking for. (And really, who do you want replying? Busy, successful people, or the opposite of that? )

[saslandscape]

I apologize for sounding too hasty. I guess I've been worried about this meeting and coming to the right agreement, plus I've been designing all day which doesn't help.

You're right Stonehedge, communication seems like it will be extremely important to make sure the fees are right. Thank you so much for all of y'alls input. I feel a lot better meeting with the contractor and knowing what to put at the table.

[agla]

!0% is a sizable chunk. I'd like to think that I could get 10% just by referal. 10-20% for project management for sure, but I don't know that you will find 10% for a referal to be very sustainable. If you can get it, by all means jump all over it.

It does put you across a line where you are no longer representing the client. Depending on your agreement, whether implied or expressed, your client may be hiring you to represent his best interests, and if you are taking money from the contractor and they find out, they could sue you. On the other hand, you might have a good working relationship with the contractor where you could openly partner up on jobs.

I don't know too many contractors who are going to hand over $2,500 as a finders fee on a $25k job or $10k on a hundred k job. Things are not that tough, ... not yet, anyway.

Take it if you can get it.

[secondnature]

Agla, thanks for bringing up that point. I have been contemplating a situation where I would not only be paid by the client to represent them in the install (supervision) yet I am being paid a proposed 5% from the installer of the job total.

Hmmm. Getting sued does not sound like fun. I can see how this could become an issue. This contractor has situations with other designers where the designer takes a minimal amount for designwork, then STRONGLY refers Contractor Joe, who then gets the job, installs while working ONLY with the designer, not with the client, who has been hired by the client to supervise, and the installer pays the designer a 5% of total job when done. Sortof the same situation.

It seems like there really has got to be a better way. I would really like to have a simple working relationship with an installer or installers that would exchange referral fees for good leads. Both being hired separately by the client, all working together, ensuring good communication. A good designer working for a good installer. Seems like we could stay pretty busy!

Thanks!

Hmmm. Sounds sortof Pollyanna doesnt it!!

Originally posted by agla
!0% is a sizable chunk. I'd like to think that I could get 10% just by referal. 10-20% for project management for sure, but I don't know that you will find 10% for a referal to be very sustainable. If you can get it, by all means jump all over it.

It does put you across a line where you are no longer representing the client. Depending on your agreement, whether implied or expressed, your client may be hiring you to represent his best interests, and if you are taking money from the contractor and they find out, they could sue you. On the other hand, you might have a good working relationship with the contractor where you could openly partner up on jobs.

I don't know too many contractors who are going to hand over $2,500 as a finders fee on a $25k job or $10k on a hundred k job. Things are not that tough, ... not yet, anyway.

Take it if you can get it.

[secondnature]

SAS.....

What ever happened with this? Did you end up taking a referral fee from the installer? Do you supervise your jobs?

I am looking at the option of a similar set up with an installer, and I am really looking at it hard. would be interested in anything you have to share!

Thanks

Originally posted by saslandscape
I'm a landscape designer (my first post on this site), and refer 80% of my clients to a small landscape company because I like the work they do. The owner of the company wants to pay me a finders fee, but I have no clue how much to charge. Do I charge a flat fee or a small percentage of the profits, or total cost?

[saslandscape]

We ended up coming up with a great agreement. For the first $100,000 in business I bring this company, I get 2% of the gross for each job they do. This also includes future projects for the client if the client wants to do everything in phases. When I bring them $150,000 worth, I get 2.5 %; $200,000 gets me 3% and so on. We got to these numbers by figuring out if I were to make 10% of the net, it roughly equals out to 2% - 3% of the gross. By doing the gross, I can easily calculate what's owed to me. The finder’s fee is absorbed into the final estimate for the client.
Communication is vital to this deal. Every Monday or Tuesday morning we have a meeting to discuss new projects and estimates that will be getting final approvals from the client, so I always know how much the client is going to pay for the project. Make sure you have a good relationship with the landscaper.
I don't have to supervise the project, but I might come in at the end and tell them what needs to be tweaked if they ask me to, or if the landscaper has a question about something on the property I might show up and give him advice. Now if I were supervising a jobsite, I would definitely charge 10% of the gross, but doing things this way allows me more time for designing and getting new clients.