payment for new site over time

would you do it, and--if so--how?

[zollerwagner]

A new potential client is seemingly broke. They have a business that supposedly has been doing worse lately, because they aren't getting as many good leads. Their idea is to bring in more clients from the internet.

They want to pay via some sort of percentage money paid by the internet leads. I don't see any way to verify that.

But, if I were to host the site, I could keep track of the number of emailed inquiries (via a form and php routine). Then I could bill an amount for each one, to be paid monthly or every other month. I might put in a cut-off, where I'd no longer bill.

I've never heard of anyone billing for a site like this. I assume that's because it's risky. But it does strike me that it could profitable because you're basically charging interest on a loan. Following the loan metaphor, I should probably require a "downpayment".

Any thoughts?

[edited by: zollerwagner at 2:00 am (utc) on Jan. 12, 2005]

[deejay]

If they can't market and sell effectively 'in the real world'... how well do you really think they will fare in the virtual world?

Sounds like bargepole material to me, as in "I wouldn't touch it with a ten foot...."

[steve40]

sorry i wouldn't touch it
they may very well be using the internet as a last ditch way to survive with you providing the funding

the internet is not the answer to all business probs
sorry a nono i reckon
steve

[zollerwagner]

Thanks for the feedback.

The idea of moving away from an hourly wage and becoming more like an investor is tempting. If I become a partner (and I would be since I'd be investing in the firm), I'd be entitled to on-going share of profits over the long haul. If there is a long haul!

Of course, good venture capitalists would carefully determine the likelihood of getting paid. Maybe you're right that this client isn't the right one to try it on.

What if they were a well-to-do business? Would you consider accepting some form of residual payments? What would it look like?

[steve40]

yes if client is good and you believe you can add value to their business its a good plan and over a longer term earn more

but I would still run a credit check on any company or person that you are effectively providing a loan to

steve

[diamondgrl]

You need to assess whether the business has a good idea/execution plan or not. That's a tricky position to be in, because you probably aren't as good as venture capitalists in determining likely return.

But if you feel confident in their product/market and team, go for it. Just provide yourself a fairly rapid "out" from the contract.

[zollerwagner]

That's an interesting comment.

A "rapid out"? Would that be something like the following?

"If two unpaid monthly bills go unpaid, the site will be taken down and replaced with a message for the owner to contact the webmaster. The contract will be void and the full remaining amount due will be payable immediately."