If you\u2019re a consultant, you\u2019ve probably been approached by small and startup businesses asking you to do something for them in exchange for a success fee.\u00a0 This means, if you produce results, you get paid.<\/p>\n
Often it\u2019s helping to raise funds for a startup (which requires you have a license to do that by the way).\u00a0 But sometimes it\u2019s helping them sell or license a product into another, larger organization. Sometimes it\u2019s just an introduction and they take it from there.<\/p>\n
Any way you look at the situation,\u00a0you are not being paid<\/strong> to do your job and <\/strong> provide your expert skills otherwise unavailable to your potential client. Although,\u00a0if they are not paying you are they really a client?<\/p>\n Basically, what the company is asking you to do is assume their risk.\u00a0 Well, that\u2019s fine if you are on their board of directors, or a major shareholder.\u00a0 But otherwise, why should you?<\/p>\n A hybrid solution to this negotiation is working on a retainer fee with a success fee attached.\u00a0 That way, you are being paid for your skill and efforts no matter what the outcome.\u00a0 If the outcome is successful, then everyone wins.<\/p>\n Now if you are the company doing the asking for services in exchange for a success fee, think about these two situations. The first is, how would you feel if the tables were turned and you were asked for work for a success fee?\u00a0 Second, would you give your product to customers and only ask them to pay for it if it worked for them?\u00a0 No way, you\u2019re probably saying.<\/p>\n And therein lies the attitude that puts off the people you are trying to contract.<\/p>\n So both sides try to remember that successful business means a win-win for all parties involved.<\/p>\n