Setting up the 10% agency

[AtW]

It should be partnership:

1) prospective members pays in joining fee (say £1000).
2) partnership takes 10% of earnings for placement of that contracts
3) year end - profit of the partnership is split among partners depending on how much money they put through agency, thus actual margin will be less than 10%

This won't work without critical mass naturally.

[d000hg]

Great idea, who's going to do the marketing and selling?

How many people does it need to get going? For every person who signs up for a first contract at £X, you need something like £X*20 in the bank to cover it safely, don't you? That's a LOT of cash... even for 10 contractors you need pushing £100K.

Or can you find (safe and legal) ways a round this? To me it seems that's how agencies can fall over.

[d000hg]

It should be partnership:

1) prospective members pays in joining fee (say £1000).
2) partnership takes 10% of earnings for placement of that contracts
3) year end - profit of the partnership is split among partners depending on how much money they put through agency, thus actual margin will be less than 10%

This won't work without critical mass naturally.

Would you let people join and pay £1000 without having a contract? e.g as a shareholder to make profit on their investment?

[RichardCranium]

They know the game but work under a strict code of conduct set out in the terms of employment.

No BS no lying just plain english and honesty (another USP).

This kind of approach works for Natwest

Excuse me? Are you talking about NatWest the Bastard tulipbag Bank? NatWest the Screw-You-Over-And-Laugh Bank?

Or Natwest for Fairyland Pixie Dust Sellers?

[d000hg]

I plus one other contractor tried this. Other contractor took his exams for EB. We worked out that it could be done on 7.5%.

You mean the costs to break even were 7.5%? That seems a lot, where does it all go?

[AtW]

Would you let people join and pay £1000 without having a contract? e.g as a shareholder to make profit on their investment?

Yes I would because profits will be split depending on how much money contract put through agency, ie earned agency 10%.

Say you are a member and put £100000 earnings through it, agency took cut of £10000, then at year end it turns out £3000 of this pot is available is profit, so contract gets it back thus making effective agency margin of 7%.

Naturally agency will need to make a profit in order to do it.

SKA Ltd uses slightly different partnership model to ensure members of the project who contribute their bandwidth/processing will share the commercial success.

[d000hg]

if it is a co-op then that is the way it will work.

But if you employ the best pimps in town then you won't have loads of money left. But you will have a lot more UK contractors represented vigourously in the market.

If you hire agents, how will it run any better than existing agencies? Those agents will work as they always have, policing it would be hard and it could quite easily degenerate from initial high standards.

[BlackenedBiker]

Would you let people join and pay £1000 without having a contract? e.g as a shareholder to make profit on their investment?

Sure why not shares.

Business set up with a view to factor the invoices.

With enough contractors on board, you would have a ready made rolodex of contacts better than any agents it is called the clientco's....

Current pimps would have to listen and improve their code of practice if it was a success, and start dealing fairly with their bread winners.

Stop the bs that they provide a skilled on-going service and admit that they are essentially a one off broker.

[AtW]

You mean the costs to break even were 7.5%? That seems a lot, where does it all go?

%-tage should drop as scale increases: this is based on assumption that cost per placement is not fixed.

In theory such agency structure would allow it change %-tage of cut based on actual performance, ie: if with some scale costs turn out to be 7% of total revenues, then it might reduce margin from 10% down to say 8%.

Consequently if such agency becomes successful it will have USP - effectively direct channel with minimum cost to companies who use it.

[AtW]

Business set up with a view to factor the invoices.

Factoring is a tulip risky model - the agency should tell clients (companies) that in exchange of low margin they charge and highly qualified people it supplies (membership fee plus CV review to only allow quality people), but in exchange invoices MUST be paid pretty sharpish.