How much should you make from a Joint Venture? 10%? 20%? 50%? Should it be of the net or gross profit or off the top? How do you decide? This is an important consideration, especially for people who are used to paying peanuts and those who are used to accepting a few crumbs. Entrepreneurs who understand business and profit are more likely to pay and demand reasonable responsibilities.
For example, when people attend a DollarMakers Joint Venture Broker Bootcamp, I pay the referring Members Up to 50% in agreements! My cost of putting an extra chair into a Bootcamp and a few extra cups of coffee and donuts, plus a workbook, is negligible. I can afford to be generous. My DollarMakers Joint Venture Forum Members earn thousands in contracts every month. But if I was selling computer hardware, with a profit of around 6%, I could afford to pay such a generous commission. Large profit margins demand high awards; real business people understand that. And there are other ways to reciprocate, other than financially – but that's a subject for another newsletter or the Bootcamp.
A realtor approached me with the typical offer: "Send me a buyer or a seller and I will pay you $ 75 for a completed sale." So you get $ 7,000 and you expect me to accept $ 75? Are you kidding me? I'll take 50% of the realtor's commission or no deal. Am I being greedy? No – I pay 50% and so can they. If you do not ask, you will not get. Desperate realtors will not agree to this, but the smart realtor who has built in multiple Joint Venture back end sales into every transaction will jump at the opportunity. 50% of something is better than 100% of nothing. It's business they would never have had. When you show them how much business that one deal can generate over the years and the Marginal Net Worth of a customer, they might see the light. If they do not, send them on a Joint Venture Bootcamp!
Most entrepreneurs do not understand their acquisition cost, attrition rate, profit margins, back end value or Joint Ventures. That's why they feel they have to grab every up front cent they can. When they understand the big picture and they want to create increasing, multiple streams of passive income, they will become generous in their referral fees and commissions. I personally do not accept anything less than 20%, but it all depends on the big picture, margins, reciprocal consideration and value. Remember the big picture and demand to be paid a fair amount or walk away. There are many opportunities out there but very few people who understand Joint Ventures , so you can call the shots.
Source by Robin J. Elliott