100% of Nothing
What would it be worth to you to receive a steady stream of new customers with little or no effort on your part? Would you be willing to pay 10% of the revenue they generate? 20%? 50%? Or do you believe that you can't afford to pay anything?
During a recent discussion, I was surprised that people said they could not afford to 'give up' 20% in commissions to reach new customers. If you have more work than you can handle, that makes sense. However, most of the people who take this position do so because they think it is 'not fair' that someone else get a percentage of the money they believe is theirs. My question is: Would you rather have 100% of nothing, or a smaller percentage of something?
I have taught courses at several places where my compensation was a revenue share. Typically, I received 50% or less-often much less-of the fees the students paid. Many instructors think this is unfair. After all, if they are presenting the course, shouldn't they get the bulk of the money paid by students?
Break down what is actually involved in making the course happen, and it all makes more sense. The sponsor provides a place to present the course, lists it in their catalog and does other marketing (a big expense), takes registrations (including absorbing credit card fees) and handles student questions and issues. I could do these tasks, but they take time and money. Plus, I don't enjoy them. I prefer to use my resources on the part I enjoy most and do best-presenting a great course.
Instead of worrying about someone else also making money from 'my' course, I look for ways to increase the income I generate, including publicizing the class to attract more students, providing a required or optional text for an additional fee, and keeping in touch with students after the course so that they can become long-term customers.
When offered a commission or revenue-sharing arrangement, consider the following:
Do you have more of the product than you are currently selling, or the ability to create more? Do you have time to provide additional services?
Will your pricing accommodate paying a percentage of revenue to someone who will refer clients to you? If not, maybe your rates are set too low.
What does it currently cost you (in time and money) to get a client? If you spend little money but lots of time, don't forget the value of that time. Wouldn't it be better to increase your billable hours, even if you only net 80% of your regular rate for those additional hours?
What else will you get from the relationship? Perhaps you will gain visibility from the referrer's web site, newsletter or catalog. The clients referred to you may become repeat customers who do business with you for years to come (and depending on your arrangement, you may only pay commissions on the deal referred directly to you, not repeat business).
Don't overlook the value of having partners to help you grow your business.
Copyright Cathy Stucker. As the Idea Lady, Cathy Stucker can help you attract customers and make yourself famous with inexpensive and free marketing ideas. Get free marketing strategies, articles and more at http://www.IdeaLady.com/.
Latest News
Could auto industry layoffs spur more entrepreneurialism in Mich.? MLive.com, MI - So in the wake of all this economic destruction, will entrepreneurialism and creativity flourish? Some business leaders think so. ... 'There's no such thing as job security' |
Risky Decision-making Essential To Entrepreneurialism Science Daily (press release) - ScienceDaily (Nov. 12, 2008) Whether someone will become the next Richard Branson, Steve Jobs or Henry Ford may be down to whether they make risky ... |
Norfolk entrepreneur wins top award Norfolk Eastern Daily Press, UK - ... and at LEAD East - a new initiative which promotes entrepreneurialism in order to help ensure continued growth in the East of England. ... |
Two Degrees, LLC Appoints Mike Heffernan as Chief Financial Officer MarketWatch - Now is the time to bring on a financial expert that we know and trust, and who shares our spirit of entrepreneurialism, to ensure our continued success. ... |
Bank of America and PRIME - Working Together to Support the Over ... ITNews, Italy - It aims to unlock entrepreneurialism in the over 50s in the UK by helping this group get back into employment through setting up their own businesses. ... |
Economic downturns can spur mergers, innovation Seattle Post Intelligencer - We've seen consolidation inspire entrepreneurialism most clearly in Washington's banking industry. Every time a bank is bought, that frees up capital and ... |
Max Levchin, Jawed Karim, Tom Siebel, Scott Banister, Reid Hoffman ... SYS-CON Media, NJ - ... co-founder of Zivity, Reid Hoffman , founder, President and Chairman of LinkedIn and others to Discuss Cross-Country Entrepreneurialism in Two Panels. ... |
Chamber joins Go Texan Jack County Herald, TX - Retirees are increasingly drawn to smaller rural communities with access to urban services, and rural entrepreneurialism is a growing trend. ... Chamber provides info on how to donate |
Range of Bay area firms take note of Entrepreneurship Week Bizjournals.com, NC - Entrepreneurialism, invention and innovation are important to advancing living standards, said Ken Evans, regional director for Entrepreneur Week in his ... |
Portland trying new solar-powered public toilet Northwest Cable News, OR - Entrepreneurialism aside, the city says it's recognizing a humanitarian need for public rest rooms. To reduce opportunities for vandalism and crime, ... |
Resources
-
Sorry there are no resources available at this time