Whenever you are training a new student to start a home business like marketing

consultant and start asking me about setting up “contingency fees” (that is, getting paid on the percentage of sales versus a fee). I always have to spend an hour trying to convince them not to want to do it.

At least in the beginning.

Why?

There are many reasons:

One is that you are in a “partnership” with the business owner. Now you’re trusting your

honesty and your confidence and your ability to do business, all of which are

completely out of your control. And although everything may look good “on paper”,

You could find yourself investing a lot of your time and energy in a business and not

get paid a penny for your efforts.

Also, even if things are going well in the beginning, it is very likely that the things you like

not keep working the way you want them to work.

And on top of that, making a contingency deal changes the whole relationship between

you and the customer.

Especially when it comes to a lot of money.

Things can go well when earnings are modest. But when a great and sudden success

happens (usually as a result of you, the consultant) clients who used to be rational

and honest, can you suddenly start acting funny, trying to justify the things you

disagreed (especially when it comes to paying you).

Now don’t get me wrong here.

I’m not saying you should totally stay away from these contingency arrangements, as they can

It will quickly earn you a lot of money that you would not have seen otherwise. In fact,

Sometimes a small “tweak” in a company’s marketing and sales can lead to huge

windfall profits. And if you have a contingency deal, you will get a good sample of

those benefits.

But I would never recommend someone who is starting to get into a cigar

contingency basis. It is much better to charge a flat fee first and then as you

work with the client and they work with you, you can both find out if you are going to

work well together.

In other words, let the deal turn into a contingency deal. You will be much better

and avoid some of the nasty mistakes I see from so many consultants: marketing and

otherwise, fall into.