May 1, 2020 at 6:27 pm #2991377
Hi all, just wanted some guidance if anyone has been in this situation before. In short, brought in a new client to my friend's small practice. I 100% went out and sourced the client and closed the deal. Totally my lead from start to end. Nothing large, $1,500/month for a committed 8 months, plus a one-off $1500 clean-up/establish fee (the books are a mess and we're fixing some back issues).
I haven't approached my friend yet to ask what is in it for me. Have you worked for a practice, brought in new business solely by yourself, then asked for a referral fee? Or a portion of the ongoing revenue? My friend's practice is setup where we have 3 accountants doing the day-to-day bookkeeping, and he and I are the client managers. So far, it's just been his clients that we work on, but now that I'm getting out and about, I've brought in this one + 3-4 more in the pipeline.
What have you seen in such situations? I totally get that he's paying the overhead and salaries for the daily bookkeepers, but at some point, I start thinking – should I just be doing these clients on the side as my own?May 3, 2020 at 11:25 am #2992880monikerncParticipant
Just have the conversation with your boss/friend. Certainly, you will be able to come to sort of understanding and/or agreement.May 3, 2020 at 12:30 pm #2992925fsugirl2005Participant
You definitely need to come to some sort of legal agreement with your friend in regards to you soliciting business. Otherwise, this “friendship” can go south really quick.May 4, 2020 at 1:09 pm #2993618ReckedParticipant
Also advise that you get an agreement and get it in writing.
This has disaster spelled out all over it.
If I understand correctly, you are an employee, and work for your friend.
Without your being partner, or equity in some way, you are essentially building his book of business and not leaving yourself in a very good position.May 4, 2020 at 4:51 pm #2993801vbmerParticipant
It is the norm in professional firms for employees (SM, ED, MD, sometimes M or client executive) to go out and source work for the firm. There is no direct compensation for bringing in new business, as it is your job to do so. (some firms like Alvarez & Marsal have revenue-based pay, but that's based off billed hours, not sales) If you want a cut of your sales, you need to discuss partnership. If you want to take clients for yourself, you need to end your relationship with your employer, friend or not.May 4, 2020 at 6:26 pm #2993897TncincyParticipant
I agree with everyone else that a conversation with the friend is necessary other than that, you have no right to expect compensation when it has not been discussed or agreed upon. You will get a handshake and an appreciation drink but real acknowledgement will not happen to your satisfaction. My thing is when you don't know ask the question and see what the friend will do.May 4, 2020 at 8:28 pm #2994041
Hi all, thank you for all your responses. I tend to overthink/over-analyze a lot of things. I spoke to my friend about it.
His offer is a 30/70 split – I will keep 30% of the revenue and he will keep 70%. He will have his team do the weekly bookkeeping and reconciliations and his senor will do a second review. I will maintain a high level/strategic relationship with the client and will get the 30% for that.May 5, 2020 at 1:52 pm #2994539ReckedParticipant
Sounds pretty reasonable for not having to do any of the grunt work.
You should get it in writing, and also work out who “owns” the client, ie: if you were to exit the relationship with him, but are still the point man on all the accounts.
You also want to protect yourself, so the senior can't build a relationship as the day to day contact and make your position as point man redundant, and then you are suddenly no longer needed in your current capacity.May 5, 2020 at 3:51 pm #2994770
Thanks, Recked. 100% agree on all your points.
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