Are you willing to share the risk if it also means sharing in the potential reward?

As many of you know, I run a web design company (www.webbreez.com) and one of my largest clients was just sold to new owners. They have approached me about staying involved with this organization but with a completely different structure.

The agreement till now has been they paid for their web site and they pay a monthly fee for hosting and management. The new owners want a completely updated look, more functionality and they don’t want to pay for these improvements or for future updates. Instead, they are offering a percentage of the profits from these upgrades.

Basically, they are asking me to trade a regular monthly payment for potentially a great deal more (and potentially a great deal less). If I can drive more traffic to their site and increase the percentage of visitors who turn into buyers, it becomes a great deal. If I can’t do these things, it means I spend time and money and don’t benefit.

Those of you who know me, and those of you who have been reading my blog can probably guess my response to this request. In my mind, the real risk isn’t that I can’t drive the traffic or that I can’t convert the traffic to buyers, the risk is that I’m somewhat dependent on this other organization to create products the customers will want and to provide proper fulfillment. It’s always a bit scary to be dependent upon others but based on this companies reputation for quality, to me, it’s a no brainer.

So now the question for you. In your business, are you willing to share the risk if it also means potentially sharing a much greater portion of the reward? Or, would you choose to take the safer road?

The other question is, would you be willing to share greater rewards if it means no risk to yourself? For example, if you are selling a product, would you pay someone a portion of your proceeds if they were able to greatly increase your profits? Most astute business people would be agreeable to this type of arrangement. If you are, then go out and find someone who will work with you, who will assume some or all of the risk and create a winning situation for both sides.

It’s actually a lot easier than you might think to create these winning situations, just be willing to share some of the increased profits and when everyone benefits, people will be willing to work with you.

Have a great day!

Lawrence
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