Whene'er I'm training a new student to start a home business as a marketing
consultant and they start asking me about setting up "contingency fees" (i.e. acquiring paid on the percentage of gross revenue versus a fee) I always have to spend an hour trying to talk them out of wanting to do it.
At to the last-place degree at first.
Why?
There are several reasons:
One is you're in a "partnership" with the business owner. You're now relying on his
honesty and his trust and his capability of doing business, all of which are
completely outside your control. And patc everything may look great "on paper",
you could find yourself putt a lot of your time and energy into a business and not
get paid a cent on your efforts.
Plus, even if things go good at first, there's a good chance the things you like will
not keep working the way you want them to work.
And besides that, doing a contingency deal changes the whole relationship between
you and the client.
Especially when pile is involved.
Things may go fine when profits are modest. But when big and jerky succeeder
happens (usually as a result of you, the consultant) clients who accustomed be rational
and honest can all the jerky start acting funny, trying to justify doing things you
didn't agree on (especially when it comes to paying you.)
Now don't get me wrong here.
I'm not locution you should steer all clear of these contingency deals, as they can
quickly make you a lot of money you wouldn't have seen otherwise. In fact,
sometimes just a small "tweak" to a company's marketing and gross revenue can yield huge
windfalls of profits. And if you have a contingency deal, you will get a nice taste of
those profits.
But I would ne'er recommend mortal just starting out going in on a pure
contingency basis. You're much fortunate charging a flat fee first, and then, as you
work with the client and they work with you, you can both find out if you're going to
work well together.
In other words, let the deal evolve into a contingency deal. You'll be much fortunate
and avoid some of the nasty pitfalls I see so many consultants -- marketing and
otherwise -- fall into.
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