Deal Economics & Approval

Every engagement in the WillDom ecosystem generates economic value that is shared among participants according to the Transaction Model. Before a candidate introduction or solution proposal moves forward, the ecosystem applies a structured evaluation to ensure each transaction meets minimum profitability standards and is reviewed by the appropriate stakeholders.

This framework ensures that commercial decisions are made transparently, that margin expectations are aligned across the ecosystem, and that every engagement contributes to the long-term sustainability of the platform.

Gross Margin Calculation

Gross margin measures the economic value retained by the ecosystem after direct costs are accounted for. It is the primary metric used to evaluate the financial health of each engagement.

Formula

Gross Margin = (Sales Rate − (Talent Cost + External Talent Cost)) / Sales Rate

Where:

Sales Rate — the rate the client pays to WillDom
Talent Cost — the rate paid to the talent assigned to the engagement
External Talent Cost — the hourly rate for externally sourced talent, if applicable (e.g., Developer Referral Program participants)

Example

Sales Rate: $65/hr
Talent Cost: $35/hr
External Talent Rate (DRP): $2/hr
Gross Margin = (65 − (35 + 2)) / 65 = 28 / 65 = 43.07%

Key Considerations

Branch splits are not considered a cost for gross margin calculation. The split is applied to the remaining profit after margin is determined.
Client Referral Program (CRP) commissions are not included in the semaphore calculation. However, CRP cost is subtracted from the remaining profit before the 50/50 branch split occurs when two branches participate in the same engagement.
CRP participants receive their share only after the client pays, creating no financial risk for the ecosystem. This differs from talent costs, which are paid before client payment is received.

Margin Semaphore

The semaphore system provides a visual and procedural framework for evaluating whether an engagement should move forward based on its gross margin.

Semaphore	Threshold	Action Required
Green	Gross Margin ≥ 35%	Proceed without additional review
Yellow	Gross Margin ≥ 30%	At least one Branch Leader from each party must review
Red	Gross Margin < 30%	At least one Branch Leader from each party must formally sign off (email required)

Minimum Gross Contribution

In addition to meeting the semaphore threshold, every engagement must generate a minimum expected gross contribution of $1,500 to be approved for candidate introduction.

Total Contract Value (TCV)

Total Contract Value measures the complete economic value of a contract once executed. It includes all recurring revenue from the engagement as well as any one-time charges such as placement fees or other costs incurred throughout the contract term.

Formula

TCV = (Monthly Recurring Revenue × Contract Term Length) + Contract Fees

Rules for Indefinite Contracts

When a contract has no defined end date, TCV is calculated using standard periods based on the transaction type:

Talent Transactions — calculated as a twelve (12) month period
Solution Transactions — calculated as a twelve (12) month period

Why TCV Matters

TCV enables accurate revenue projections, which in turn support budgeting and resource planning across the ecosystem. It also helps branches and partners identify which types of clients and engagement models generate the highest contract value, informing future sales prioritization.

Branch Splits and CRP Interaction with Margin

When multiple ecosystem participants contribute to the same engagement, the economic distribution follows the Transaction Model while respecting the margin calculation hierarchy:

Step 1 — Margin Evaluation

Gross margin is calculated using the formula above. The semaphore is applied based on this result. CRP commissions and branch splits are excluded from this calculation.

Step 2 — CRP Deduction

If a Client Referral Program participant originated the opportunity, the CRP commission (5% of revenue profit) is deducted from the gross profit before any branch split occurs.

Step 3 — Branch Split

The remaining gross profit is distributed between participating branches according to the Transaction Model (50/50 for talent transactions; 20/40/40 for solution transactions).

Approval Workflow Summary

Semaphore	Who Approves
Green (≥ 35%)	Sales team — proceed
Yellow (≥ 30%)	Branch Leader(s) from all parties — risk analysis
Red (< 30%)	Branch Leader(s) from all parties — email sign-off required
Below $1,500 gross contribution	Do not proceed regardless of margin %