Reply to: How much are agencies getting out of a 500pd contract?

[d000hg]

What is it about having a war chest and insurance that you think is even remotely relevant to whether you go direct or not?

The war-chest is pretty obvious; you might have to wait several months before the first payment turns up, and generally need a big buffer to cover client payment delays.

[TheFaQQer]

Agency has offered me 500 indeed.
I have PI insurance anyway, a sensible warchest, so I really don't see a point in not going directly???

What is it about having a war chest and insurance that you think is even remotely relevant to whether you go direct or not?

Two questions that you'd need answering before you consider going direct are (1) are the client interested in taking you on direct? and (2) is there anything in the contract between client and agency which prevents them from doing so?

Without knowing the answer to both of those questions, I don't see how you can go any further - knowing what you want to charge the client is irrelevant if they aren't interested / able to take you direct.

[bobspud]

Agency has offered me 500 indeed.
I have PI insurance anyway, a sensible warchest, so I really don't see a point in not going directly???

It really does depend on your agency. For instance. I set up an entire deal with a large outsourcer for me and 5 other guys to go and do you work for them. I could have gone direct. but then Everyone would be waiting for 3 months every time they put an invoice in + the time it would take for expenses on travel. War chests don't last very long when you start booking long hotel stays and flights. I got a friend to factor the payments and pay early for 6%

My other customer allows associates to go direct as well apart from the downside that one of the girls on my project waited 6 months for her first pay check because the clowns in Accounts lost the first invoice (attached to an email!!!) and then insisted on 3 months to pay when she asked where the money was...

So sometimes its a good idea to let the agency take some risk...

[d000hg]

Sure, one of the parts of business is taking risks. But by not caring about agents taking the p155 is suicide.

As a business it is NOT about whether the agent's cut is "fair", or if they are "taking the piss". It is about maximising your profit and negotiating the best deal possible with the agent, plain & simple.

[Joeman]

You honestly believe you have negotiated all the profit out??

Of course im not taking 100% of the profit!!

But i do know how much the client is paying (as confirmend by the client as they are limited to budget for certain contract roles) and of course I know much the agent is paying me, so given those two figures, the agent isnt making as much as he would have liked..
if i had accepted the role on the orignial advertised rate, the agent would be making over double what hes now making from me, so a bit of negotiation, and ive halfed the agent's commision

[TheFaQQer]

Now turn it around... what if you could have got £850/day? You've just lost out on £250/day extra.

Most of the agencies that I deal with are on a fixed margin deal with the client. The only way they I could get more without going through an agency would be to go direct, which the vast majority (if not all) of my clients have absolutely no interest in.

Having just worked out the margin that my current agency are taking (which I've only done because of this thread), I can't see how the agency are making any money on the deal at all.

[kingcook]

Then so be it. That's what being in business for yourself is about - it's called taking a risk. If the client does not perceive that I'm adding value, then I have no problem with being axed. If the client wants rid of people because they can't plan, then I would be annoyed, but if the client thinks I'm no good then I'll go.

Sure, one of the parts of business is taking risks. But by not caring about agents taking the p155 is suicide.

The example i gave above was that of an agent overcharging the client for your services. Now turn it around... what if you could have got £850/day? You've just lost out on £250/day extra.

Another part of business is about making money.

[northernladuk]

your agents must love you!!

My agents always sound like they're getting poked in the eye with a stick after ive negotiated all the profit out of the deal for them... they still keep coming back for more though...

Therefor you didn't.

[d000hg]

That's what being in business for yourself is about

No it damn well isn't. A business should try to maximise profits, partly by minimising costs and negotiating any fees paid.

Thinking about "your wage" is still a permie mindset.

[JamJarST]

your agents must love you!!

My agents always sound like they're getting poked in the eye with a stick after ive negotiated all the profit out of the deal for them... they still keep coming back for more though...

You honestly believe you have negotiated all the profit out??

[Joeman]

Then so be it. That's what being in business for yourself is about - it's called taking a risk.

your agents must love you!!

My agents always sound like they're getting poked in the eye with a stick after ive negotiated all the profit out of the deal for them... they still keep coming back for more though...

[TheFaQQer]

So if the agent is taking £1000/day from the client and you're getting £500/day, you wouldn't care? I certainly would.

No.

What if the client decides they need to bin a contractor, and you're the 1st on the list because you're the most expensive one?

Then so be it. That's what being in business for yourself is about - it's called taking a risk. If the client does not perceive that I'm adding value, then I have no problem with being axed. If the client wants rid of people because they can't plan, then I would be annoyed, but if the client thinks I'm no good then I'll go.

But that situation hasn't happened to me in the past.

If the agent was charging £600/day to the client, would you still be the 1st one on that list?

Well, since £1000 > £600 then no.

[kingcook]

Never. I set a rate that I'll work at - they pay me that rate. What they make off the deal, I really don't care.

So if the agent is taking £1000/day from the client and you're getting £500/day, you wouldn't care? I certainly would.

What if the client decides they need to bin a contractor, and you're the 1st on the list because you're the most expensive one?

If the agent was charging £600/day to the client, would you still be the 1st one on that list?

[d000hg]

Utter nonsense. The only person who provides any value in the chain is the contractor.

From your side, yes. But the client doesn't look at it from your side.

[TheFaQQer]

Do you not hagle your agent down?

Never. I set a rate that I'll work at - they pay me that rate. What they make off the deal, I really don't care.