The following is republished from The SitePoint Tribune #421.
Some time ago in the SitePoint Forums, johnyboy came up with a “mad crazy payment scheme idea” for discussion in the forums. It attracted a bit of interest and some terrific responses.
johnyboy’s idea was to build clients’ sites for free, with payment being a percentage of the sales. I really like how he’s applying alternative thinking to construct a different business model for future enterprises.
But here’s some advice from someone who’s been there: the concept may sound okay, but in practice it might end up being the worst thing he’s ever done.
Several years ago, I took a vastly reduced payment from a client by accepting a percentage of sales instead; this involved developing the site as well as marketing it. The first month was fine and I was paid. In the second month, sales went through the roof so the client owed me quite a chunk of change. Conveniently, the client now failed to see what I’d provided for the money owed, and refused to pay.
The coda to this is that stupid me agreed to a similar deal with another client a year later. Needless to say, I was done over again!
I have never, ever seen this sort of arrangement work effectively. There are too many factors out of the web developer’s control; while measurement is one thing, actual payment is quite another!
Having said that, I’d still encourage anyone to re-examine their business model or billing and payment practices; indeed, anything that might make a difference to your bottom line is worth investigating.
Brainstorming ideas, like johnyboy has done, can lead to innovative practices that help your business cash flow and generate long-term business success.