referall fees; last gasp???

[Farrell]

Reading your post, it is hard for me to make the numbers add up. Please
know, I am not trying at all to say that I think you are practicing poor
business, but it is hard for me to understand.

After adding up parts plus markup, adding up projected hours to complete the
project at your hourly wage that includes your labor, training, retirement,
rent, insurance, equipment, tools, and some profit, you can still add 20% to
the total (to pay the referral fee) and get the job? Maybe it is just hard
for me to see it because I am not there yet. This sounds like a very good
thing.

Terry Farrell

----- Original Message -----
From: <JIMRPT@AOL.COM>
To: <pianotech@ptg.org>
Sent: Thursday, August 30, 2001 4:12 PM
Subject: Re: referall fees; last gasp???


> before getting into the main reply I'd like to say that referral means(to
> me)....
> "hey Jim Ms. yada wants her piano worked on why not give her a call?"
> dollar value?  5% of anything over 1,000 including the first 1,000.
>
> wheras subcontracting means "hey Jim we have a possible contract to do Ms.
> yadas grand here is the quote I have worked up, any thoughts before I
present
> it?"
> dollar value? 20% of contract.
>
> In a message dated 30/08/01 1:29:09 PM, mfarrel2@tampabay.rr.com writes:
>
> << Do you use the same system for a complete rebuild of the $10,000 to
> $25,000 nature? Does the referring tech get 20% of that work? Seems to me
> that $2,000 to $5,000 for the referral is steep. But of course that is the
> view from my vantage point (as the one that would be shelling out the
> referral fee). Seems to me there should be a formula for reduced
percentage
> as total project budget goes up. What is your (or anyone else) take on
that?
> >>
>
> Seems to be quite a bit of interest in this subject. :-)
>   From my perspective there are several salient points that need to be
> addressed without regard to manner of agreement between prime contractor
and
> subcontractor.
> While reading through these points(my opinions only) remember that without
> the 'prime' contractor the 'sub' *would likely not have this work at all.*
>
>  1. To be successful the 'sub'-contractor must have a FIRM handle on their
> time/slash expenses.
>  2. To be successful the 'sub'-contractor must set their prices at a point
> which allows an adequate margin of profit while supplying "earned fees" to
> the 'prime' contractor.
>  3. To be successful the 'sub'-contractor must insure competent
workmanship
> and quality parts/materials are used in all shop work.
>  4. To be successful the 'sub'-contractor must supply 'on schedule' work
as
> per any agreements.
>  5. To be successful the 'sub'-contractor must be flexible as to actual
work
> which 'always' shows up during a rebuild and be willing to entertain this
> work without added costs, within reason.
>  6. To be successful the 'sub'-contractor must be trustworthy in all
aspects
> of the agreement as to workmanship and any customer contacts.
>
> *********
> A. To be successful the 'prime'-contractor must have a FIRM handle on
their
> time/slash expenses.
>  B. To be successful the 'prime'-contractor must be trustworthy in all
> aspects of the agreement and to follow-on workmanship and any customer
> contacts.
>  C. To be successful the 'prime'-contractor must be flexible as to
available
> shop times.
>  D. To be successful the 'prime'-contractor must be willing to act as the
> go-between
>  from customer to 'sub' without regard as to the subject matter, if
requested
> to do so.
>  E. To be successful the 'prime'-contractor must have the 'customers'
> interest in mind as they only they know, directly, what the customer
needs,
> wants , and expects.
>
> Those are some of the basics from my viewpoint...so this brings us to
> amenable distribution of funds........................
>  This area is open to 'any' agreement between sub and prime but I find
that a
> straight percentage agreement works best for me. This without regard to
the
> totals involved, be they 3,000 or 30,000. (my percentage happens to be
> 80%/20% but is always subject to negotiation, *before* any individual
> contract is accepted by me or presented to the customer, owing to
> circumstances)
>
>  If a prime tech brings me a rebuild contract worth say 20,000 I would
just
> as happily write out the prime checks totalling 4,000 as I would if the
job
> was 5,000 and the prime checks came to only 1,000. This for a number of
> reasons:
>
> First because without this contract I probably would not have gotten the
job
> at all.
> Second because it has not cost me any ''current' time/expense at all in
order
> to get this work
> Thirdly because I can sit in my shop have the work brought to me and know
> that once it leaves the shop I will never have to see this particular
piano
> again, barring unforseen developments of course. :-)
> Fourth because The customer will get a well done piano, the 'prime' will
get
> a profit for their work/referral and I will make my margins as I have dete
> rmined them to be.
>
> *That is a win for the customer because their piano will be ready to play,
> hopefully better than ever.
> *That is a win for the 'prime' because they will have provided a service
for
> their customer, gotten suitably rewarded for same in direct proportion to
> their 'selling' efforts and along the way will have enhanced their
reputation
> with that customer.
> *That is a win for me because I have managed to keep the wolf from the
door
> "one more time!" :-)
> It don gets no mo bettur den dat.
> Jim Bryant (FL)