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  1. #1
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    Ok, Here is my dillema. I started a website a couple months ago, my idea and investment, and asked a friend if he could help me out. I told him when the site gets up, he is guaranteed a good job. Now that the site is up and running and making some money, he tells me that he is working just as hard as me and he deserves 50/50. What are you thoughts on this?

  2. #2
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    Questions:

    How did he help out?

    How many hours did he put in versus your hourly input?

    Why are you opposed to giving him 50%?

    How much did you invest?

    When you told him he will have a job, what description, pay and job title did you promise him?


    Just because you came up with the idea does not mean you get more ‚Äď hell we all come up with all kinds of ideas, but if it requires another person to make it a reality you need to compensate for there expertise!

  3. #3
    Affiliate Miester my2cents's Avatar
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    he is correct..... you left yourself open... by not defining how you would share the profits... (pay your friend)

    We all make this mistake.... because we dont think into the future..

    it's a common rookie mistake...

    YOu need to decide whether you want to risk loosing a friend and getting a direct compeditor who know your "secrets" by not now making him a full partner...

    Personally, I would share 50% till it equaled a full paycheck.. and give him 25% of the company.

    once you are able to pay wages... I would move to a time for wages mode...

    many new startups use this model to get going...

    Joe
    ++++++++++++++++++++++++++++++++++++++++++
    that's my2cents, 'cuz I'm a legend in my own mind....

  4. #4
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    Thanks for the quick replies. Answers to your questions.

    First He helped with coding the order page, editing some of the code.
    I probably put in 300 hours he probably put in 80 hours. Now I live eat and sleep with my business, he only contributes maybe an hour or two a day.
    Why am I opposed to 50%, well I believe just because the man at mcdonalds works 99% harder than the owner of mcdonalds doesn't mean he should get 99% of the company, just his hourly wages.
    I Invested probably $1,200 at about the whole summer, He worked about 20 days.
    2cents, When I told him he had a job, I told him he had an easy job paying $10 or 15-20% profit an hour working for me. I told him he'll answer support mails and make new sites.

    "Personally, I would share 50% till it equaled a full paycheck.. and give him 25% of the company."

    Not a bad idea, I've been trying to come up with something like that. Either Pay him weekly, give him a percentage, or fully pay him, and let him buy his percentage of the company?

    You guys are awesome, especially with the fast replies and great input. Also more ideas will be well appreciated.

  5. #5
    Affiliate Miester my2cents's Avatar
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    if you willing to sell 49% of your company... I would certainly offer your friend an additional 24% if he wanted to buy it....

    just remember you need 51% to control the company...

    if your only have 50% you would need your partners approval on all desisions... with 51% you do not!

    Joe
    ++++++++++++++++++++++++++++++++++++++++++
    that's my2cents, 'cuz I'm a legend in my own mind....

  6. #6
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    Joe (my2cents) could not have said it better good advice!

  7. #7
    ABW Ambassador Jane's Avatar
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    This is why it is always better to pay people up front for their work. Doesn't look like you promised to pay him for back work though. You just said he would have a job. Why not pay by the hour?

  8. #8
    ABW Ambassador darkstar7's Avatar
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    Read up on creating a corporation and sub-chapter s corps. I would create the sub- charpter S corporation then sell the company to the corporation. Split the sale price with your buddy. This should allow you to kick him out of the company. Corporations are treated as individual entities via the IRS. You would control the corporation and their are advantages to having it be a corporation.
    Luke
    Have you promoted your brand name today?

  9. #9
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    Thanks for the all the input.

    Jane, I am going to pay for back work, probably a really good lump sum. And then I planned to pay him by the hour, I believe what happened is I shared acess with my account, he seen the funds, and now he wants part of the company. I planned to give him $8-12 an hour working with a friend and having some fun. I think he has gotten a little greedy. We never really argue, but I should be a little more bold. I wish I could just stick to the plan and pay him for his work and future work. Maybe I can work something out, but so far it seems to me I may be losing a worker and a friend?

    Darkstar great ideal, I hear good things about S corps, and the advantages to an S corp would greatly help me. And hopefully doing that will lower my taxes? I don't know how some of you deal with the outrageous tax rate. what is it 43%?

  10. #10
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    I am still losing sleep over this. I still need some opinions on this. and some ideals how to work it out.

    Steve

  11. #11
    ABW Ambassador Jane's Avatar
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    Does that wage include you paying taxes and insurance? Even so a good coder is worth more than that. Doesn't sound like you ever promised him 50/50 so offer him what you can and if he doesn't like it tell him you will have no hard feelings if he turns down the offer.

  12. #12
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    Taxes and Insurance gives me goosebumps jane. I will first subtract taxes and insurance and invest and pay wages with the profit. Yes a good coder is worth more than that, He really isn't the best worker, he knows basic html and C++, but has no creativity and not quite diligent. But Besides that Customer support and maybe some quick webpages is what i need.

    First how would I pay someone by wages or salary, by answering customer support and make/updating webpages. Especially when he goes back to college in the fall? I could maybe check how many emails replied to, set a price for a webpage, and add in a set fee for checking his emails every so often. Add that up every two weeks and send him a check.

    Sorry If I'm asking for a lot of help here. I don't know where else to go for help.

    Steve

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