Great workshop with new clients, great referral, heck yes I’m sending a referral fee!
One of my recent digital marketing workshop opportunities came to me because a friend made a referral, so that got me thinking about paying her a referral fee.
This person certainly has expertise in digital marketing and social media, but not specifically for economic development folks, so when she got a call from an EDC (Economic Development Corporation) about helping improve their social media, she got ahold of me and asked if I’d be interested in working with them.
I definitely was, since I’d already done some presentations on that topic, and wrote a blog post about social media for economic development that has brought traffic to my Tourism Currents business website for years.
Once I closed the deal with this new client, I started thinking that I really should reward my friend for sending relevant business my way. I asked another very smart friend who is also a solopreneur speaker and consultant what she would recommend that I pay as a referral fee.
(I was going to name and link to her, but she preferred that I leave her anonymous and just call her an SOB – Smart Old Broad. 😊)
The SOB recommended paying 10% of whatever I earned from the business referral.
That seemed reasonable to me, especially since the work was right up my alley, the EDC paid my requested fee and travel expenses, it was during a fairly slow time of year when I was looking for business, and I was able to visit a new-to-me city as a bonus. It felt good to send some money as a reward, especially since my referrer was not expecting it.
Keep in mind that under current IRS rules, if you are in the U.S. and you pay someone more than US$600, you will need to file a form 1099 for that tax year.
Take some time to think through what referral fee percentage would work for you. Once you’ve decided, make sure that you let your business network know about it.
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