Joint venture profit margins

One of the questions I get regularly asked, "How much should I ask when setting up a joint venture? What percentage is reasonable?" And that is a very good question. Different companies have different profit margins. Some have a higher burden and cost of sales and than others. If you sell computer hardware, for example, make a small profit - most of your profit is in the software, service, keyboards, etc.

If you want to sell a service, make greatGains, but you can also have different costs. So we must keep in mind. Some people have to pay certain restrictions on their ability to commission, as some financial planners or dentists. Others will not be used to pay commissions as the broker who offered to buy me $ 75 for a referral!

So, here is one way to approach this challenge. First you do your homework. I know I always say, but information is power when it comes to negotiations. This is good news, because mostPeople talk a lot but do not hear much, if you get to hear so much, a lot. Find out about the company and its profit margins. Make sure you tell the truth when they say they are not allowed to pay commissions. Sometimes they are just lying, because they are cheap! Talk to your competition, ask staff questions, and you'll get a feel for the amount of profit to make it so that you know what to ask.

Second, they make the money in the back end.But you can make no profit at all on the first sale () on the first transaction break, but there is much to be on future transactions, transfers, additional products and services from other providers on a joint venture basis, and so on sale. If people's back-end have understood correctly, they will gladly give a generous portion of the front. Show them the principle of incremental gains achieved (profits, as overhead and salaries are already covered and the new sale is incremental, asImplementation of an additional seat in a seminar or a service plate of food if the meal will cost only 32%)

Third, understand negotiation techniques. In any case, start high and fall, but do not start greedy. Be prepared to go off all too anytime. They remove the risk from both parties and work with the competition. Savvy entrepreneurs know their competition to their best allies.

In particular approach of a joint venture proposal from a position of strength - more than thePerson you have to do. Good to be prepared.