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First: Principles - Shared Success Agreements

Could creatives, artists, and freelancer use Shared Success Agreements in their industry to improve t
First: Principles - Shared Success Agreements
Could creatives, artists, and freelancer use Shared Success Agreements in their industry to improve their businesses?

The first version of a shared success agreement that I heard about was from Lambda School.
They’re a coding school that requires no up-front cost to attend, and you only pay back the tuition if you get a job that pays a certain amount of money. At that point, you only pay a certain percentage of your income for a set amount of time.
In short - they only get paid if it works!
How Income Share Agreements (ISA's) work
How Income Share Agreements (ISA's) work
A few months later, I saw a post online about shared success agreements as a way of funding startup and tech companies without “dilution” - giving up any ownership equity in the business to the investors.
Basically, again, the investors only get paid if their investment works.

When I saw that site, I immediately wondered how creatives and freelancers could use the same structure in their client work to make more money.
Think of it this way:
Version 1:
You’re a videographer. You present an offer to create a marketing video for a client for $10,000.
You make the video, they pay you, end of story.
Version 2:
You present a shared success agreement with the client. You say that you’ll only charge a percentage, maybe 25%, up front to cover your hard costs.
The remaining 75% is paid over time as the video is used to drive sales.
You get a percentage of their revenue from that video - say 5%.
You get to make money from that video as long as it runs.
So over the next year, it drives $250,000 worth of sales for the client.
You get $12,500 plus your initial $2,500.
You just increased your revenue by 50%.
And the next year it does another $100,000. That’s another $5,000 for you.
And on and on.
Sound great in theory, but does it actually work?

Testing The Theory
When I started Craftsman Creative, the goal was to help creatives learn the mindset and skills to succeed in their creative businesses.
But it was also to create something that I owned. To make the move from a vendor to an owner.
I opened the site up to other course creators back in May, I wanted to try the shared success model.
I would produce, film, edit, and host the courses for no up-front cost, and then we would split the revenue on the backend.
But would it work?
The important part is to know what kind of numbers you need to make it work.
For me, that was about 100 sales of the course during the first month in order to make as much as I would normally make if I were to charge up front.
To get that many sales, I knew I needed to work with a creator that had a platform of her own.
The first course was made with Hayley Barry, who at the time had just north of 11,000 followers on Instagram.
In her first week, she enrolled 82 students, and the course made more than $10,000 in five days.
The model worked!
And what’s great is that now we’re both aligned in our interest to keep marketing and selling the course, rather than me moving on to the next client and forgetting about that project forever.
What About You?
If you do client or project work, how could you use a shared success agreement? What kind of numbers would you need in order to make it work?
What could that mean for your business if you were to increase your revenues by 10, 20, 50, or even 100% using this model?
Don’t know? Use the new Benchmark App to quickly understand the numbers that make your business work, and learn how to fix and grow your business so that it supports the work you love to create.
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Daren Smith | Craftsman Creative

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