A friend inside a healthcare company told me I should talk with the Medical Director about executive coaching for their physician executives. I presented to the client and he liked me. The problem was that one of my arms-length consulting friends had delivered coaching there before, and I didn't want to exclude her or have her take the business away from me. [To complicate matters, her husband was the man introducing me.]
I called the consultant and told her what was happening. I suggested a joint presentation to the Medical Director, which we accomplished. The result was a lucrative contract to deliver executive coaching to eight physician-executives. This is the memo I drafted to prevent future disagreements.
Audrea was going to handle the administrative side of the project, and I wanted our agreement to limit her work there, so administration did not exhaust our budget. I over-trusted a partner once on a big assignment, and the project profits evaporated into his checkbook.
Remember: this is an agreement between friends. If I were contracting with someone I didn't know or trust (which I would never do), I'd use a much stiffer legal document with teeth.
July 6, 20—
Fee Split for Technove Medical
- Sales Commission. 20% of total, ongoing gross revenue is a sales commission to be split 50% Audrea and 50% Bill. Example: if total revenue is $10,000, then 20% or $2,000 is commission: $1,000 to Audrea and $1,000 to Bill.
- Hourly Rate. Note: this means an effective billing rate of $240 per hour ($300 - $60 or 20%). If we hold a $300 billing rate, we will have to increase the total price of the project, which may make it too expensive.
- Testing & Assessment. Audrea will receive 90% of marked up assessment revenues. (10% goes to Bill as part of total sale.)
- Billable Time. Bill and Audrea will each coach four (4) MDs, and devote a roughly equivalent number of hours per physician at $240 per hour. In the event a physician requires extra time, and that time is built into the budget, the consultant delivering the service gets the fee.
- Administrative Time. (Interpreting Data and Preparing Reports, etc.) Audrea will bill the pre-determined amount of time to the project at an administrative hourly rate, $150/hour.
- Expert Time. Audrea will bill the pre-determined amount of time to the project at her usual billable time, $240/hour.
- Expenses. Out of pocket expenses like printing, copying, will come out of the gross revenue of the project.
- Billing. The project will be delivered under the Endsley & Associates company. Audrea will invoice Technove Medical, and CareerLab will invoice Endsley & Associates.
- Payment. Endsley & Associates will pay CareerLab invoiced amounts within 10 days of collecting from Technove Medical.
- Residuals. At the end of the project, any unallocated revenue will be divided equally, 50%/50%.
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Bill Frank
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Audrea Endsley
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Date