Had to choose between a flat fee and a revenue share for our first big agency partnership

We went with the revenue share on a $50k project with a design firm in Austin, figuring upside was better than a guaranteed check. Three months in and the client keeps delaying launches, so we're sitting at zero payout while covering our own labor costs. Has anyone else regretted taking the variable cut over the sure thing?

2 comments

2 Comments

milaprice10d agoMost Upvoted

Learn from my mistake and get a floor on the revenue share next time. Something like, "If the client hasn't paid out by 90 days, we get X amount as a minimum guarantee." I had a similar deal with a kitchen remodel company that kept pushing back their launch dates, and I ended up eating three months of labor and material costs because I was too trusting. You can still get upside with a cap on the share, but keep yourself covered for delays. Also, nail down specific deadlines tied to the payout in the contract, not just the project completion.

xenagarcia10d ago

Did you have any language in your deal about what happens if the client drags their feet? @milaprice is spot on with that floor idea, I've been burned the same way. We finally started putting in a "time value" clause that kicks in after 60 days of no launch, basically a small monthly retainer that converts to a credit against future revenue share. Makes the client actually care about hitting their own milestones when there's a ticking clock on their end too.