Business Partners

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Fern9do

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So i'm starting a business and the whole thing is my idea and i did most of the groundwork.
Only problem is i need to bring in some partners. I was wondering how do you decide how much shares a particular partner will recieve.
Do you split it equally?I think i should get more seeing as how it is my idea, although we will be doing everthing together(bussiness plan, investment etc)

can i claim a bigger cut because it's my idea?
 
cashmoney said:
So i'm starting a business and the whole thing is my idea and i did most of the groundwork.
Only problem is i need to bring in some partners. I was wondering how do you decide how much shares a particular partner will recieve.
Do you split it equally?I think i should get more seeing as how it is my idea, although we will be doing everthing together(bussiness plan, investment etc)

can i claim a bigger cut because it's my idea?
Click to expand...

It depends, if you came up with the idea, maybe a technical solution, but you are not really business development inclined then I think 50/50 is fair.

It depends on a lot of factors, but you already on the backfoot as you realised that you need them and not the other way round. That is the way of business unfortunately.
 
Depends on the idea, and how much money and effort and skill will be required to lift it off the ground.
Because money and effort and skill each have their own negotiable value.
 
You should split the shares according to your capital contributed imo, and then if one works more or has a degree for example just pay that partner a better salary and maybe up the interest that he will earn on his capital. Your choice. Just my 2c
 
I just think its kind of unfair to go 50/50 seeing as how they would not be doing it if i haven't approached them.
Its not a technical/invention type idea.
Just want to know if i can go maybe 60/40 with the partner.
 
cashmoney said:
I just think its kind of unfair to go 50/50 seeing as how they would not be doing it if i haven't approached them.
Its not a technical/invention type idea.
Just want to know if i can go maybe 60/40 with the partner.
Click to expand...
You can go 60/40 but there are also other ways of doing it if you want, like I said you could stipulate that you will get the better salary or higher interest on capital etc.
 
cashmoney said:
I just think its kind of unfair to go 50/50 seeing as how they would not be doing it if i haven't approached them.
Its not a technical/invention type idea.
Just want to know if i can go maybe 60/40 with the partner.
Click to expand...

It is a negotiation process, but if all else fails, split according to capital contribution, as Just_Ice said, which could be not cool for you as have the Intellectual capital, and need their money (I'm assuming there).
 
Know all the reasons why you need the partner and have a number of options. Don't let them know that you need them and make it quite clear you are looking for a partner but you are not selling your soul.

Generally I would think long and hard about taking on a partner just for quick money, especially when I have to give them a part of my idea.
 
Always retain ownership of your business, i.e. you keep a minimum of 51%.
 
If you only need partners for money, use the banks...
 
A sports shop.
I mainly need them for the money...maybe i should try the banks first. Lets see if they will give a 22 year old a chance.
 
Thanks just ice. Im tired of working for a boss.
Is it rare for somebody to start a business on his own?(Without bringing in partners)
 
Share split depends on various things -

1. What does each person bring to the business? Is it the original idea, or a particular skill, or capital investment or a network of connections or just simply their sweat equity?

2. Do you want to be BEE compliant (if you are not, I would suggest you should for more business opportunities)?
 
blunomore said:
2. Do you want to be BEE compliant (if you are not, I would suggest you should for more business opportunities)?
Click to expand...
Not if its such a small business surely? Maybe if he expands but to start up and be BEE compliant wont make much of a difference, and besides he isn't offering a service but rather selling a good so its not like he will even be able to use it in a tender.

Cashmoney, leave the BEE stuff for now, try get a loan first otherwise try get a partner and negotiate from there, if your partner(s) is/are black its just luck that you will be a BEE compliant business from the start. It isnt required though :D
 
Just_Ice said:
Not if its such a small business surely? Maybe if he expands but to start up and be BEE compliant wont make much of a difference, and besides he isn't offering a service but rather selling a good so its not like he will even be able to use it in a tender.

Cashmoney, leave the BEE stuff for now, try get a loan first otherwise try get a partner and negotiate from there, if your partner(s) is/are black its just luck that you will be a BEE compliant business from the start. It isnt required though :D
Click to expand...

Do not mean to argue with you, but if he e.g. wanted to supply any business with equipment, the legislation surrounding procurement would oblige him to be BEE compliant IF he wants to win a tender/contract.

Also, banks would much rather give funding to businesses who are BEE compliant. This is reality.
 
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