How to begin to work with (bigger) clients directly and not thru an agency? How to begin to work with (bigger) clients directly and not thru an agency?
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    Default How to begin to work with (bigger) clients directly and not thru an agency?

    On my last project working with a large client and having secured the role using a recruitment company, they told me that they make 16% on my rate.

    Today I was going through my emails and saw that they (accidentally I think) sent an attachment with the details between them, the recruitment company and the client, and the rate was indeed 16%. €93 per hour was what the client was charged and I received €80. Everyone was happy..

    What I am wondering now is how easy is it to just go and work for clients directly? I think I have a reasonable network built up and usually find work (thru agencies) quite easily.

    Have many others done / do this? Are there aspects to look out for? (such as end client bargaining you down knowing you are working directly and asking for the higher rate)
    Last edited by jf2010; 27th November 2020 at 12:45.

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    Almost impossible for your average bum on seat contractor which I reckon is about 95% of the market. The only people that have managed it have had a very good business relationship with a client or have a viable service offering to give. Any contractor that has naively only just found out about agency margin won't have the wherewhitall to make a direct contact stick I am afraid. It's a completely different beast where you have to think like a business and understand this relationship. PermaContractors don't. There are service offerings, value & benefits, PSL's and so on and so on. And then if you understand all that you have to find one of the few clients around that is willing to take on direct and then beat the other 10 contractors that are already trying to leverage that client etc etc.

    It's a pipedream every contractor has when they suddenly find out about margins and all the business in the background. A vast majority will never make it happen.
    Last edited by northernladuk; 27th November 2020 at 13:03.
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    Quote Originally Posted by northernladuk View Post
    The only people that have managed it have had a very good business relationship with a client or have a viable service offering to give.

    If this was the case where you have a good relationship, or previous contact - what are the further issues you may face? I am thinking from a legal point of view perhaps a lot of clients may have rules in place to only work with agencies - for security etc

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    To add to NLUK's answer - the other bit people miss is that clients aren't stupid. They pay an agency margin because the agency provides a service - just because you can go direct doesn't mean you can bang on 20% onto your rate.

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    Quote Originally Posted by jf2010 View Post
    If this was the case where you have a good relationship, or previous contact - what are the further issues you may face? I am thinking from a legal point of view perhaps a lot of clients may have rules in place to only work with agencies - for security etc
    Not being harsh but if you have to ask questions like that then you've a mountain to climb. There is no easy way or tick box to do this. You've got to understand your offering your customerztheir needs and how businesses work. We can't explain all that to you.
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    Quote Originally Posted by jf2010 View Post
    If this was the case where you have a good relationship, or previous contact - what are the further issues you may face? I am thinking from a legal point of view perhaps a lot of clients may have rules in place to only work with agencies - for security etc
    Basic economic ones. What is your risk capital if it all goes wrong. How good is your PI and PLI cover? What is your capitalisation funding if you need to supply materials, licences, support contracts and/or other stuff (not least surviving until you get paid and covering other unexpected overheads such as tax demands)? What is your trading history - can you demonstrate at least three similar, successful and on-budget projects with other clients? What is your company's credit rating?

    Done a few direct supplier gigs over the years. Those are the kinds of questions I've had to answer.
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    There's only been a couple of clients I've worked directly with and that's because I am well known to people with either influence or who hold a budget and can control the process.

    Networking is key to getting direct contracts.

    If you're selling a product, rather than a bum on a seat, then you need to learn a sales pitch or two.

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    Quote Originally Posted by jf2010 View Post

    Have many others done / do this? Are there aspects to look out for? (such as end client bargaining you down knowing you are working directly and asking for the higher rate)
    Just keep in touch with the other contractors and follow them to whoever their new client is. Then it’s easy to either go direct with the client or pay a minimal fee for someone to do the paperwork.

    Alternatively, if the agent is a big sleaze then after he gets you the job, agree with the client to ditch him. This might be a tort, but I can’t say I’ve ever had any problems.

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    Quote Originally Posted by malvolio View Post
    Basic economic ones. What is your risk capital if it all goes wrong. How good is your PI and PLI cover? What is your capitalisation funding if you need to supply materials, licences, support contracts and/or other stuff (not least surviving until you get paid and covering other unexpected overheads such as tax demands)? What is your trading history - can you demonstrate at least three similar, successful and on-budget projects with other clients? What is your company's credit rating?

    Done a few direct supplier gigs over the years. Those are the kinds of questions I've had to answer.
    That's very different then what OP is talking about. A full service supplier will charge way more than 16%, their gross margin is more likely 40-60%.

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    Just because you know someone isn't necessarily going to get you business.
    It isn't necessarily going to get you that 16% either!
    You might have a network but do you have the right network and what are the other blockers in the way?
    The other point with most contractors is that most contractors cannot actually sell.
    You need to sell to get business!
    I have seen a large number of utterly horrendous attempts at selling by contractors and by also members of this forum. 2 attempts at sales by members of this forum were that hilarious that they actually led to me pissing myself laughing - yes the water came out! - no I won't name names.
    A large network does not mean sales.
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