what's a fair percentage?

Discussion in 'Lawn Mowing' started by bobbygedd, Aug 26, 2005.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i have expanded into consulting . i have one party allready interested, we are meeting monday for lunch and to discuss the contract. he wants to open a lawn service. he has money to invest. he also lives in my main service area. the first thing i want is some type of no compete agreement. what would be fair? i would want him not to advertise in my service area for a period of 2-3 yrs. second- i would offer hands on consulting which would involve going with him to purchase equipment, showing him how to use it, showing him how to advertise, and going on the estimates with him to ensure he lands the work. i want a percentage of the $$$ from jobs that i land for him, for a period of??? what is reasonable? can i ask for 10% of his annual gross from each client? i also want sole control over the chemicals on all his clients properties. he's not licensed, and i want all the ferts for xxx years on his clients properties. also, there are many small towns here, i work in 4 of them, and make it a point to avoid the rest. i would want him to only operate in the towns that i don't, for a period of xxx yrs. help me out here. anyone ever do consulting, and how do you expect to get paid for this? p.s thanks for the phonecall sean
     
  2. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Posts: 4,771

    10% sounds a little steep to me. I personally charge others 5% for any leads I send their way...and I think that is fair. What you are doing sounds a little bizarre to me, but you are from New Jersey and things are done a little different there. Nothing wrong with helping the competition, but definetely would want some kind of no-compete contract drawn up. I am just wondering if after a few years and the contract is expired and his business is more successful than yours....what would that mean for you? If he has money to invest in equipment and consulting, why don't he just buy into a fanchise?
     
  3. Mower For Less

    Mower For Less LawnSite Senior Member
    Posts: 823

    What you describe is closer to franchising than consulting. Usually consultants charge for their time, and their time only. They get no residuals on sales made from their advice.

    Maybe you could sell him a franchise, then you couls dictate his territory, commisions, etc...

    Kevin
     
  4. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i'm offering hands on consultation. soup to nuts. litterally take him by the hand and walk him through everything. i will land the jobs for him. that is 80% of this business. i want a percentage of his annual gross from each client. i won't charge for my actual time for doing the estimates, i think i'll make more doing it on a % because i have a better than average success rate in my estimate to signing ratio
     
  5. Ric

    Ric LawnSite Fanatic
    Posts: 11,956

    [​IMG]

    BooBy

    Be sure the man has all the right tools. I believe the first and most inportant one is Pictured Below.

    [​IMG]
     
  6. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,752

    Bobby, I don't know if I'm the only one who thinks this way or not, but if you are going to get the accounts, buy the equipment, train him on the equipment, show him the ropes, etc., plus be taking care of the chemical and fertilization end of things on these properties, then why don't you just hire yourself another top-notch employee, train them, and have the business for yourself?

    I can see doing something like this for a friend, purely for the sake of friendship, but the monetary rewards, would, or should, be much greater if you would simply expand your own business by that same amount. Just my opinion, for what it is worth. Neill
     
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    neil, i would not be buying the mowers, i would be paid for my time as i help him choose the mowers, and show him how to use them. i would show him how to price the work, how to do the work. i would introduce him to suppliers, dumpsite, etc, etc, for all of this i'd be paid for my time. i would go with him on the estimates, and for this i'd recieve a % of gross for each customer i sign for him. he would not be permitted to mkt my exsisting service areas for a period of time. i am currently expanding quickly in my exsisting service areas, i have no desire to work outside of them. i would be pulling a % of his gross, for work i never would have done anyhow, cus it's not in my area. the ferts would be gravy. i'd visit the properties every 45 days or so for an aplication. if it didn't work out, who cares, it's not my client anyhow.
     
  8. wbw

    wbw LawnSite Fanatic
    Posts: 5,454

    What the percentage should be, but I think something on a sliding scale i.e. 10% year 1, 9% year 2, 8% year 3 and so on. BTW I think this is an excellent idea.
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    of course it's an excellent idea. it allows me to pull a paycheck, from outside my service area, while keeping him out of my service area. he will benefit greatly because, he won't go thru the trials and errors that everyone else went through. he won't get his butt kicked like everyone else did when they first started. he will pull a profit immediately in his new business. i just need something fair to present to him.
     
  10. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    If it were me, I would have to ask myself how much is this situation is ego-driven....then I would go from there is all.
     

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