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/.
The Cockroach Test
Let me ask you a question? Imagine I would offer you $10 for eating 10 living cockroaches. Would you do it? Now listen, I raise the ante and offer you $100. How does that feel? If you hear me saying "you get $1000 bucks" does that change something? Here is the ultimate offer 1 million dollars for eating 10 living cockroaches right now. What is your feeling now?
Entrepreneurship Story; Over Regulation in Franchising Part I
Jim and Sally run a successful auto business, which they have built up over two decades and have expanded to three stores and many of their friends keep saying, "You should Franchise." They think about this for about five years read a few books, like "Franchising for Dummies," The "E-Myth", "The Franchising Bible" and many others on the shelves of the new big book store in town with the coffee shop inside. They finally decide that it makes sense especially as they have friends and loyal employees who wish to be associated with them and even own the first franchises. So they set out to franchise. They visit an attorney since that says in all the books to do. Most books about franchising are, at least in part if not whole, written by S2D2s (lawyers: S2P2s; Self-Serving Parasites of Planet) anyway, so they take that advice and visit an attorney. The S2D2 explains the MUD and helps by charging them a good chunk of change; $35,000 to prepare a boilerplate document which is so complicated they could not do it on their own without years of study. They give the S2D2 (scoundrel) the money and they look at the document and start asking questions. They do not ask him about the price gouging laws that their state has after all the flooding from the remnants of Hurricane Ivan, although they feel severally violated in the outrageous costs to prepare the documents. After all there is some new shop equipment they need to test cars to stay in compliance with the latest smog certificates and they are not cheap either. So they ask some typical questions instead of why they had to pay so much.
A Secret To Extraordinary Accomplishments
I sat watching a documentary on U.S. Navy SEAL Team Training on the local exercise channel. It showed young men, mostly in their early 20's, enduring grueling ocean swims in near-freezing water. It showed these same young men forced to swim underwater (holding their breaths) until a major percentage of them passed out and had to be rescued by their instructors. It showed weeks of grueling training in which ordinary men are transformed into incredible machines with wills of steel and unshakable discipline.
Lessons Learned from One Entrepreneur on Vioxx
For the past ten-months, I tried every drug from the popular Vioxx, Celebrex and Aleve, to the long-standing Percocet, Ibruprofen 800, with some other fabulous ones like Fexeril, Ulltram, Naproxyn, and Antevert. (And, this is my short list).
Walt Disneys Failures Could Inspire Entrepreneurs
You are a struggling entrepreneur and sometimes it feels like you are pushing a 3 ton boulder up a steep hill. Costs keep mounting and you are considering giving up. Well before you do, check out these 10 setbacks that Walt Disney had, some were financial nightmares that put him millions of dollars in the red:
How A Woman Became A Successful Bill Collector In A Mans Industry And How You Can Too!
I have worked in the credit industry for over 17 years now. When I first started out, I only knew a very few women in the industry. That number has grown over the years, but not by much. Being a bill collector has always been categorized as a "man's industry".
The 7 Major Reasons Businesses Fail and How to Overcome Them
This year, over 800,000 of the approximately 2,000,000 start up businesses will fail!
Pre-Money vs. Post-Money Valuation
When a company decides that it must raise capital, a key question that must be answered is how much the company is worth. For example, if the business needs $500,000 to get started and/or grow, how much of the equity in that company should $500,000 command? Once this question is answered, the company will go out and try to find investors. When doing so, a key question often arises as to whether the valuation is "pre-money" or "post-money."
Four Steps to Entrepreneurship
As more and more people start or consider starting their own business, it is important that they understand the core steps that are required to launch successful ventures. These steps include spotting, assessing, selecting and executing upon opportunities.
Making the Financial Transition
Making the financial transition from paid employment to earning a living on your own is probably the single biggest challenge facing many would be entrepreneurs. For most, the mere thought of financial insecurity holds them back from even trying. But if you have the vision, persistence and the ability to respond to market feedback the financial rewards will soon follow.
Profile of Women Leaders
Leadership is based on two words, "pressure and support"and that the leadership is the power to influence people to move in a direction that you believe in your heart is a good direction for most people" (Fennell, 1999, p. 267). Adams and Yoder noted that "evidence from contemporary studies on sex-roles and leadership indicates that men and women, with similar education, career aspirations and training, have basically identical scores on measures of psychological masculinity and femininity." In other words, the traits we assume are important in good leadership can be found among people of both genders.
Realism vs. Optimism in the Business Plan
The most important function of a business plan is to create interest among investors so that they write a check. In achieving this goal, business plan writers are often challenged by determining the proper level of optimism in their plan. That is, they must create a compelling story to investors while maintaining credibility.
Be Where the Pucks Going To Be
The "Great One" said it best
Youve Found Your Guru, Now What?
In my last article, "Follow That Guru", I told you about the one (1) simple technique I used when starting my home business, "A Name".
Financial Strategies for Transitioning from Salaried to Solo
7 Financial Strategies for Transitioning from Salaried to Solo
Street Smarts Vs Book Smarts, What Does It Takes To Be An Entrepreneur
The latest series in "The Apprentice" features 2 distinct groupof candidates. One group, who are only high school graduates aretermed as "Street Smarts" by Donald Trump whereas, the othergroup are all college educated with some having MBAs and advanceddegrees. They were termed as the "Book Smarts".
A streak dating back more than three decades came to an end at midnight on New Year's Eve. For the first time since 1972, as America rang in 2005, "America's Oldest Living Teenager" was not in Times Square to count down the dropping of the giant ball. The 75-year-old host of ABC's "New Year's Rockin' Eve" was in the hospital, recuperating from a stroke suffered a few weeks earlier.
Start a Business Selling Government Surplus
Did you ever wonder what happens to all that government equipment that is purchased each year by federal, state, and local governments? They don't just throw it away! By law, all unused and out-dated equipment must be sold back to the public at a public auction! That's right. Everything is available to you and I the American taxpayer. There are primarily two ways that the government does this: on-site auctions or online auctions.
Build Your Own Board Of Experts
The most successful entrepreneurs rely on their advisory boards to help spot new opportunities and potential pitfalls.
Cut to the Quick - What is an Entrepreneur? The Inside Story
Enjoying the title of entrepreneur is a hollow feeling.
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