Question

Topic: Strategy

Marketting Service Level Agrement- B2b

Posted by shirugithiomi on 9/6/2011 at 8:17 AM ET 125 Points
We have been appointed to provide marketing / PR and sale leads generation services for an alternative energy company. The company has a patented process of manufacturing oil for institutional cooking in Africa. They do not have the budget to pay the full consulting fees but they are willing to consider offering us shares and commissions on total sales as part payment for our services. The company has ginormous potential and I am keen to negotiate with them. Kindly assist me with a service level agreement template/ advice that will secure our interests in the shares of the company, commission for sales generated and consulting fees. Our services include the following
1) Doing a marketing strategy
2) Branding the product
3) Public relations
4) Road shows to do presentations about the product
5) Engaging brand ambassadors
6) Feedback
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RESPONSES

  • Posted by Andy Fracica, MBA on 9/6/2011 at 8:38 AM Member
    I don't have a template for you but remember, this also has the potential to fail. How much are you willing to risk for nothing. By offering you stock or commission on sales the company risks nothing and you risk your time and efforts. A company of this magnitude has to have funds. Tell them you don't work for free, and ask a fair price for your efforts. If you like the company, after they pay you, you can buy stock in the company.

    I hope this helps,

    Andy Fracica
  • Posted by shirugithiomi on 9/6/2011 at 9:12 AM Author
    Hi Andy,
    Thank you for your response. I have considered the risk factor and we are not getting into the partnership on a 100% risk. They are paying 50% of our fees and 100% of the costs of the campaign. The balance will be be settled with company shares and % of sales turn over. I have also confirmed that the company is getting 500,000 USD in seed capital to expand operations from DIFID. Before accepting their proposal, we comissioned an independent valuation of the company and I am satisfied with the results of the audit. The company is solid and is recieving alot of government support for its ingenuity in finding solutions to cooking without Trees.
  • Posted by Peter (henna gaijin) on 9/6/2011 at 12:19 PM Member
    I also don't ave a template - and don't think such a thing exists. As Andy said, you have to choose what level of risk you are comfortable with. Look at the offer and set the value of any stock at 0 and see if this would allow you to survive. A larger percentage of all start-ups fail, so it is quite possible this will be your pay.

    Keep in mind, even if they make it, any percentage of equity you get won't be worth much for a long time. Most companies like this don't have shares which are freely traded, so it is hard to sell your shares.

    It all comes down to your comfort with risk.

    ps - if I was in your shoes, and assuming an Ok share of equity and I had time/skills to do the work, I personally would go for it. But that is my comfort with risk.
  • Posted by shirugithiomi on 9/7/2011 at 3:12 AM Author
    Thank You Peter. I am definitely going for it. This Bio Fuel is the future of institutional cooking without trees in Africa. There is a risk factor but I have done some due delligence to mitigate against them.

    Since the kind of template I am looking for does not exist, I will settle for a comprehensive marketting service level agreement. I will adjust it to suit my needs. Can someone please assist with this?
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