Because he said how small the profits would be once all that was taken way, if i can't get a wage, what percentage should I ask for, and should it be profit or shareholder ?
Wage or % of Profits ?
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Because he said how small the profits would be once all that was taken way, if i can't get a wage, what percentage should I ask for, and should it be profit or shareholder ?
I think, and this is going back a while, shareholder rights would be defined in the company articles, they might say things like a shareholder with >10% holding can call EGMs. At the very least you should get a free copy of the accounts. In your position I would just worry that the owner would be able to do things like reduce profit by for example, paying himself a massive salary leaving you with a meaningless percentage of whatever is left. As others have suggested getting a minimum payment clause in the contract would be a neat solution.
I would turn this question around and ask yourself how much do you think is reasonable to be paid for the work you're expecting to do? £10k, £20k? Once you know that, when you find out the expected profit then it should be easy to work out
cool video, interesting concept!
What are the projected 1st year figures - he must have some idea?
What's in the business plan? What is year 1,2 & 3 expected earnings?
What are you putting into the business in cash terms? What is he putting in?
Do you have any other earnings elsewhere? Existing job etc? How much work/time do you expect to put into this job?
Far to many unanswered questions - sounds like the back of a fag packet stuff!!
What's in the business plan? What is year 1,2 & 3 expected earnings?
What are you putting into the business in cash terms? What is he putting in?
Do you have any other earnings elsewhere? Existing job etc? How much work/time do you expect to put into this job?
Far to many unanswered questions - sounds like the back of a fag packet stuff!!
Soldato
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well i think you got your answer as to what you have to go for but will you? if you take a percentage of small profit you'll be working all year for nothing. if you take a wage you'll be working all year but the employer doesn't think he'll be able to pay you a small wage so want so to pay you less then what you deserve.
The shop turns over around £750,000oa per year.
I'm currently writing the business plan, its not going to be finished until I design most of the website, database and sort out my share of the earnings/website.
He will be paying for the all the stock, delivery and payment charges. I will be paying for website hosting and domain for the first year.
I've currently in a full time job but would consider putting all mine time into the website if I could afford it or perhaps lower my hours in my current job (Tech Support/Web Design)
I apologise, is there any more questions
And Advice from the above guys?
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I apologise, is there any more questions
Demand a 'minimum' flat rate if you go for %. (So .. you give me the greater of 35% of profits or £24,000 per annum). If he has nothing to fear - he'll just say yes immediately. If he is going 'er .. no .. er .. dont think so' it means he doesn't think you'll make 24k. Simples.
He is only offering you the % gig because he thinks it will cost him less money than a salary. The 'it'll mean you care more about your work that you do' sentence simply stinks of complete BS. Any employer can demand an employee cares about his work without needed to offer a % of profits.
The issue is, I'm confident that I can create a good business, I don't want to deal with selling in just bulk, making a small amount of profit whilst he'll get all the discounts off suppliers (For his own shop too) and I want to make sure there isn't a catch when he talks about vat, delivery etc . . .
Also I want some form of share on the website, as the value of the actual website can increases depending on the traffic and how well the design is, how can I own half without it affecting his shop business that is joint with it.
He thinks he'll be spending the most and at the greater risk, when it comes to stock, tax, labour, delivery . . . How can I make sure he can cover the costs of these whilst making equal, fair profits. 20% of profits go directly on vat, how much % would delievery workout, could it be worked out in this manner to come to a fair agreement ?
If I can get equal profits with him and have some stake in the online business, I'll be happy, as I know I will be doing months of work before seeing any cash!
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Remember his salary is a COST to the business, before PROFIT.
So if he shares profit with you - he could take £100,000 salary before the 'profit' the company has made is decided.
You are being far, far too goodwilled about all of this. If I was a betting man - I'd put £100 on, in 6 months time, him giving you £4250 as your 'part' of the profits, then laughing heartily about how much 'free worj' he has got out of you when down the pub with his mates ... :/
So how could I go about putting this on paper to make a deal, what should I say ?
Soldato
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20% of profits don't go on vat as how can that be profit if it's still a cost to him? and besides the customer is the only one who pays the vat, not the business so VAT is not a cost to him any way but your customers.
it sounds ot me like he's saying we'll make large profits such as £500k to get you on board but instead this is the turnover, then he tells you he can't pay you much as he still has to pay the bills, and then overall profit will be much much less if he can't afford to give you a wage. why can't you do a half and half deal? go with a small wage but also say 10% of profits?
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Contracts are very easy to write .. certainly don't bother with a lawyer.
To be honest .. I wouldn't work using the word 'profit' at all.
He could do the following
1) Buy himself a alienware laptop 'for the business'
2) Pay himself £15,000 a month as a COST to the business
3) Buy himself a 'company' BMW 7 series 'for the business'
4) Decide he occasionally works from home, so take a % of his rent out of the business (out of the profit) (and gas, electricity, everything else)
5) Decide to sell his wife company laptops for uber-cheap .. destroying profits but he doesn't care and *really* the laptops are just becoming his
6) Simply not be a good business man, so the business doesn't work
7) After 6 months say 'er .. not quite good enough .. you're fired' just before the profits start coming in
8) Buy stock for the next 5 years, meaning there is no profit. Funny enough you leave because otherwise you can't afford to eat .. so he has had free labour for a year and now has a load of stock
And that's just me brainstorming.
If you really HAVE to do profit -- ask for SHARES in the company. This offers you some protection against just some of the above abuses. Ask for 40% of the shares.
But really, honestly, trust me -- go for a wage. Tell him you'll think about it again in a year's time -- but -- god -- go for a wage.
Will this affect using his shops stock on the website ? And how much share should I demand ?
How would OCuk deal with a % for me, if this was the situation for you?
This is also @ Ruper Lowery
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Maybe kemik or Pudney can comment more, but if you take a share, then I think that will make you a partner rather than an employee, which then gets you saddled with the risks and liabilities of the business, which you might want to avoid.