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Paying for Job Leads - What's a Fair Percentage?


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  #1  
Old 04-04-2011, 07:49 PM
Hedgemaster Hedgemaster is offline
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Default Paying for Job Leads - What's a Fair Percentage?

I've read a few bad "reviews" about that "MagicalService" outfit, so I'm not talking about them specifically.

I'm new. Winter has wipes out my funds and I can't advertise as I had planned to. The weather is crappy, and spring is off to a late start, so the phone isn't ringing yet. I can't tighten the belt much more.

Well, here comes a fellow lawn guy with an offer of job leads for me, as he knows I don't have a "base" built up yet. We discuss things, and he's not being sneaky about it - he explains that he is working a plan to have part of his income generated by "finders fees" for job leads he gives to people like myself.
Nothing set in stone, and no "contract", as he's still working out the bugs in his plan and trying to narrow down a few things. He's been doing the lawn thing for several years (mows my neighbor's lawn), and has been helpful to me by answering some questions, giving pointers, and even hiring me to help on a few jobs when I was first out of work, so this isn't just some guy who approached me out of the blue.

He's given me five leads over the last week or so - three of them I bid, and got the jobs ($300/$170/$100), while one hasn't decided yet, and the last one, I simply "passed" on, as it wasn't going to work out for me.

These are all jobs I would not have if not for his leads.

He was talking about using 10% as his fee for non-recurring type of work (clean ups, shrub removals, etc) and for a mowing job that is a "contract" or seasonal agreement, he gets the whole amount of the first cut, and "Then it's yours". No other fees, even if it leads into more work.

In the example of the three jobs I have lined up, the "payout" is as follows...

$570 (What I bid/am paid)
-$57 (his 10% finder's fee)
= $513 (what I have after paying him)

Is 10% fair? Average? Too high?

Any thoughts?
My hope is that eventually, I won't need to use his leads much, but at the moment, I'm hurting for work.

Last edited by Hedgemaster; 04-04-2011 at 07:51 PM.
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  #2  
Old 04-04-2011, 08:11 PM
SpokaneSRC SpokaneSRC is offline
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I'm just starting out myself, and waiting for spring too. I think 10% with nothing else owing is very reasonable. It sure is to me. What I wonder is, why is he getting customers? He's advertising and you aren't? Or are they previous years customers? Any which way, 10% in my opinion, is well worth a customer.
Good luck.
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Old 04-04-2011, 09:04 PM
950thomas 950thomas is offline
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10 % is standard I pay that to anyone who sends me biz including customers
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Old 04-04-2011, 09:07 PM
bruces bruces is offline
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I think that sounds like a pretty fair offer .I would like to add that looking at the flier you designed ,I dont know why [assuming you havent ] you dont try to do a few fliers for others during your slow times .You have something that many types of business's could use a hand with ,and I bet you could fill in the holes in your schedule easily .Roofers,carpenters,mechanics ,all have things they are good at,often promoting their business professionally isnt one of them .
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Old 04-04-2011, 09:25 PM
Hedgemaster Hedgemaster is offline
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Quote:
Originally Posted by SpokaneSRC View Post
I'm just starting out myself, and waiting for spring too. I think 10% with nothing else owing is very reasonable. It sure is to me. What I wonder is, why is he getting customers? He's advertising and you aren't? Or are they previous years customers? Any which way, 10% in my opinion, is well worth a customer.
Good luck.
I THINK he may be using a service (for the leads) that he pays into, or pays into with another person... he's just throwing some of the stuff he doesn't want, or doesn't have time for my way. He's been in business for at least four years, so yes, he does advertise (when he wants/needs to), and he does have a large customer base already. He's looking to "expand" by subcontracting to other guys in specific areas.

And no, I'm not advertising aside from word of mouth, and the Craigslist ad I just posted and having gone door to door in the winter (snow removal).
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Old 04-04-2011, 10:00 PM
Hedgemaster Hedgemaster is offline
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Quote:
Originally Posted by bruces View Post
I think that sounds like a pretty fair offer .I would like to add that looking at the flier you designed ,I dont know why [assuming you havent ] you dont try to do a few fliers for others during your slow times .You have something that many types of business's could use a hand with ,and I bet you could fill in the holes in your schedule easily .Roofers,carpenters,mechanics ,all have things they are good at,often promoting their business professionally isnt one of them .
Thanks, and yes, I will likely start to offer my design services at some point here. It's not the "money maker" that you would think though. Ever since the day that some retard with a bootleg copy of Photoshop and an internet connection sat down and said he was a "designer", the market got flooded with... yeah, just like lawn care... "lowballers".

It's hard to compete with places that offer "logos for only $69! Unlimited revisions!!!" Eff that! I'm not spending all day and half the next day, and maybe several more hours after that to "finalize" a logo for $69. My time and talent is worth more than that, but it's hard to explain that to people who only see the dollar sign, and don't know a good logo from a box of kittens when they see it.

I need to set some parameters for pricing, and get a payment method set up, but yeah - it's in the works. Now may not be the best time to do it, as things should start getting busy (crosses fingers), but I can see a great opportunity come next fall/winter.
I figure by this point, everyone knows I'm not just here posting with an agenda. I'm here to learn how to make a living in the lawn care business first and foremost. I have a wife and several pets to feed - and home I'm trying not to lose - I need all the advice I can get.

Those who understand where I'm coming from, and need a hand with some design work are free to PM me. If it's something I can help with, I'll let you know. As a reward for participating in this helpful forum, I can say that at this point, I will give forum veterans and regular posters more priority, and more leeway on pricing - kind of a "you've helped me, now I can help you" sort of thing.

I'll leave it at that, as I didn't intend for this to be an "ad", and I'd like to keep the focus on my original question regarding the 10% fee for referrals.
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