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I occasionally have offers from people to help me get contracts. In return, they want to be paid a commission or a certain percent of the net profits. I have always had a hard time trying to figure what is acceptable, as well as, creating clearly defined terms.

For instance, let's say I will be the sole developer. How do I calculate my work time into the equation?

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This is as simple as this - find out your hourly price and stick to it!

When you get such an offer, analyze the project in detail and calculate how many work hours it will take you to finish it. Then tell your price to your "people". They can add their commission on top of your price.

If you want to go deeper, you can calculate your maximum hourly rate (for short projects) and your minimum hourly rate (for projects over X work hours).

But basically, it all comes back to you.

If you are not sure about your hourly rate, then browse statistics on popular freelancing websites, as they will offer the average hourly rate for each field. After that, try to figure out if you can use the average rate or you have to (de/in)crease it.

Also, don't be intimidated if they tell you "Can you do this job for XY dollars"? Simply analyze it to see how much work there is, and then calculate the hourly rate. In a matter of a seconds, you will know if you should take the project or not.

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Would they do some upfront work only? Or continue to add some value during the course of the job, such managing your billing and payment, tax and other required deductions, and other ongoing support tasks? They should get paid for each effort.

For matchmaking, they should get paid a finder's fee. More if they are selling you specifically to a specific client than if they are just finding opportunities for you to sell yourself or mailing your resume to a hiring manager. The finder's fee might be a lump sum or it could be a (relatively small) percentage of your billing. For starters, what's an appropriate fee in your industry, in your area? What's the length of your typical job? Divide, and take that as a guide.

If they then want to act in some support role like billing, you should pay them whatever that service is worth to you. How much time can they save you? What are you willing to pay to not do it yourself? Perhaps you can knock out an invoice in 10 minutes and would rather do it. Or maybe you'd so much rather focus on your service than take time out to for support tasks that you'd gladly pay someone else to do it.

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Just read this again after several years.

What I have learned since then, is that the issue is really flipped around the wrong way. As a contractor, you should figure out your proper price and stick with it, without any regard to the sales person commission.

Their commission is completely their own business and something they negotiate with the first party. The sales person shouldn't be asking you about a part of the payout.

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