Sorry, should have made it more clear -- all of their billing is hourly (although they'd probably be much better off switching to daily or weekly).
In your $10 million of value example, what would you say is a reasonable percentage of that to charge? It would be a bit more difficult to measure, but I think this firm could probably bill on a value-added basis as well.
Someone above suggested 33%. Personally I think that is wildly optimistic for any consulting engagement unless you do all the work and billing. And the washing up.
It of course depends - doubling conversion for any company will be valuable, but they have done the hard work getting to this point and will rightly resent essentially an equity share.
A range of 2-5% would be something bearable, and probably more so if presented as fixed sums, and increasing along measurable KPIs so instead of I get 5% of whatever happens, something like 20k fixed per week and 50k if user conversion hits 3% for project X and 100k if it hits 4% across all user categories.
Essentially you need to have a clear idea of what they want out of the deal, a feasible number that you can increase by, and slice of 5% of that.
Also
If they would be better off switching to weekly billing, why not tell them. If younare just paid as a cog in their system thays how you will get treated. If you think you can do a lot better, why not reduce your and their risk - work for them at a low (bearable) fee - but you get to lead a project and get bonus payments on hitting clients business kpi improvements.
This way you have some safe harbour of salaried job but also are incentivised to go all out for the client
Comments
Sorry, should have made it more clear -- all of their billing is hourly (although they'd probably be much better off switching to daily or weekly).
In your $10 million of value example, what would you say is a reasonable percentage of that to charge? It would be a bit more difficult to measure, but I think this firm could probably bill on a value-added basis as well.
Someone above suggested 33%. Personally I think that is wildly optimistic for any consulting engagement unless you do all the work and billing. And the washing up.
It of course depends - doubling conversion for any company will be valuable, but they have done the hard work getting to this point and will rightly resent essentially an equity share.
A range of 2-5% would be something bearable, and probably more so if presented as fixed sums, and increasing along measurable KPIs so instead of I get 5% of whatever happens, something like 20k fixed per week and 50k if user conversion hits 3% for project X and 100k if it hits 4% across all user categories.
Essentially you need to have a clear idea of what they want out of the deal, a feasible number that you can increase by, and slice of 5% of that.
Also
If they would be better off switching to weekly billing, why not tell them. If younare just paid as a cog in their system thays how you will get treated. If you think you can do a lot better, why not reduce your and their risk - work for them at a low (bearable) fee - but you get to lead a project and get bonus payments on hitting clients business kpi improvements.
This way you have some safe harbour of salaried job but also are incentivised to go all out for the client
Just a thought