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Help with Profit Sharing

Discussion in 'General Business Forum:' started by andi_rahmat, Feb 15, 2016.

  1. andi_rahmat

    andi_rahmat New Member

    So, we're in the middle of our preparation to launch the business (design service). I'm still confused to determine others roles, should I call them co-founders, and how to compensate their participation in the business.

    I had the original idea. But with little money, I knew the only thing I could do was to recruit several friends and build the business together.

    So one day I invited A, B & C for a meeting:
    - A has a strong will, can work full-time, but not so skilled.
    - B is skilled, has a strong will, but can't work full time.
    - C is not so skilled and can't work full time, but has knowledge in another field that might be useful to the business.

    I told them about this idea, how it could benefit us, how we shall run the business, how to compete in the market, what differentiate us with competitors, what features shall we had, and other things related to the idea execution. I explained to them that we would split the profit and saw if within a few months we could have enough cash flow to change it into salary. We then gathered again several times to prepare things. I did most of the branding, logo, website, promotion and marketing. They were also excited, putting in full efforts and helped me with several things.

    I pay for all of the business expenses. I'm also the most experienced person in the industry with connection to potential customers. My plan is to when we launch, I'll handle things related to marketing, direct them at work, and build relationship with customers. While A,B & C work and focus on the designs, and help me if we are about to do door-to-door promotion.

    I would appreciate any advice about how much should I share the profit to each person? I also plan to include a "marketing budget" in sharing the profit.

    Or if you have any other idea about how should I compensate them, it would be great too. Thank you.
  2. Levi

    Levi Moderator Staff Member

    In my opinion that makes them your employees, you're basically acting as an agency for ABC.

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