What is a fair commission percentage to charge?

[jfall]

I currently work for a medium sized IT company. My boss wants to branch off into other markets and wants me to lead the project.

So basically I would be building the new business, marketing it and bringing in the customers. The company would be providing the resources (i.e. cash, equipment etc.) and supporting the customers.

In this case, what profit sharing options should I be looking at? For example, for every customer I bring in I get X amount one time, or X percentage of their monthly payments for as long as they are a customer (or for a set period of time) etc.

What is my best option that would be mutually beneficial to me and the company? Is there a standard commission percentage rate for these types of deals?

 

[jpeyton]

Somewhere between 5-9% of the profits.

 

[chipy]

jfall,

out of curiosity, what new business area are you spearheading? i'm curious because i used to work in IT and still have friends that work in that area.

i'm not sure on the percentage, but if you could, try to get a monthly percentage if you expect your customers to stay w/ your company for a while. that'll be a way to make some good money it seems. good luck!

 

[tasmanian]

Originally posted by: jpeyton
Somewhere between 5-9% of the profits.

1 time or every month/time they recieve money?

 

[AgaBoogaBoo]

So basically I would be building the new business, marketing it and bringing in the customers.

For the same service they offer already or a new section?

Start by writing out a business plan (at least a summarized version, but more than just an executive summary) so that you are both on the same page and know exactly what is going on. Figure out just how much money you need from them to do this, and when it will be paid back. If you approach this the way new businesses seeking funding do, you will get a good percentage.

If you're just going to go to different customers than they already do and get a commission per sale, I'd start by finding out how much each client costs them right now in acquisition, and work from there.