How to split profits in a Design/Development company

[louiswol94]

My maths must be failing me today. What happens to the other 10%?

I reckon you probably just keep it in the bank account...?

 

[Spacerat]

Be VERY sure you and your partner have the same outlook in life wrt work, spending money etc.....

 

[Idiosyncratic]

My maths must be failing me today. What happens to the other 10%?

Costs... Something that is completely unavoidable in business. While 10% might, in this case, be a little too much - the extra money can serve as capital for future expansion.

 

[Idiosyncratic]

^This. Partnerships of inequality rarely work. There's always going to be someone who feels they were short changed by doing most of the work and getting the least amount of pay for it. The only way I'll do something like this is if each one gets the pay for their work.

For those who are saying that it should be 50/50 -I think that the developer will feel short changed when he sees that from a monetary perspective, his value is more than his partner. Developers generally earn more money than designers.
I'd agree with you, Swa, that it would actually be best if each one gets the pay for their work, but they seem to want to work on a profit sharing basis. Someone will have to do bookkeeping, CRM, etc... If each gets the money from their own work they might as well each start their own business and share clients, offices, etc. Ok, not exactly, but you get the picture. Chances are there will be more work for the developer than the designer (particularly if the developer has a strong knowledge of design like many do nowadays). This will create disunity.

 

[Swa]

For those who are saying that it should be 50/50 -I think that the developer will feel short changed when he sees that from a monetary perspective, his value is more than his partner. Developers generally earn more money than designers.
I'd agree with you, Swa, that it would actually be best if each one gets the pay for their work, but they seem to want to work on a profit sharing basis. Someone will have to do bookkeeping, CRM, etc... If each gets the money from their own work they might as well each start their own business and share clients, offices, etc. Ok, not exactly, but you get the picture. Chances are there will be more work for the developer than the designer (particularly if the developer has a strong knowledge of design like many do nowadays). This will create disunity.

I'm getting that it makes sense to work together because their skills complement each other. I hope they can reach some compromise.

 

[rward]

For those who are saying that it should be 50/50 -I think that the developer will feel short changed when he sees that from a monetary perspective, his value is more than his partner.

I'd be pretty pissed if I were a designer and spent a week or 2 on a project and the developer spent 5 days and I only got 50% or less..

The design may go through many revisions before the client is happy, this all takes time.
Only once the design is approved does the developer have to start working and the Final version. The developer only has to do things once where the designer may have to redo screens multiple times.

In this situation, saying that the developer deserves more isn't quite appropriate..

 

[Swa]

I'd be pretty pissed if I were a designer and spent a week or 2 on a project and the developer spent 5 days and I only got 50% or less..

The design may go through many revisions before the client is happy, this all takes time.
Only once the design is approved does the developer have to start working and the Final version. The developer only has to do things once where the designer may have to redo screens multiple times.

In this situation, saying that the developer deserves more isn't quite appropriate..

I don't get how people can say that developing is more valuable than designing. It requires skill. If anything you can get a monkey coding from a book but not everybody is good at designing.

 

[rward]

I don't get how people can say that developing is more valuable than designing. It requires skill. If anything you can get a monkey coding from a book but not everybody is good at designing.

Yuuup

 

[_kabal_]

If anything you can get a monkey finger painting with poo, but not everybody is good at coding

 

[Idiosyncratic]

I'd be pretty pissed if I were a designer and spent a week or 2 on a project and the developer spent 5 days and I only got 50% or less..

The design may go through many revisions before the client is happy, this all takes time.
Only once the design is approved does the developer have to start working and the Final version. The developer only has to do things once where the designer may have to redo screens multiple times.

In this situation, saying that the developer deserves more isn't quite appropriate..

I completely agree, but not all web design projects are equal. Nowadays, many companies don't even do mock-ups, and I'm of the opinion that PSD to HTML is dead. Gone. While many hasn't become aware of this fact because we haven't received invites to its funeral - times are changing. Developers are better paid than designers, regardless of how much work is inputted. For example, a miner likely works harder than any developer (or designer), but doesn't get paid as much... This is real life, and life isn't exactly fair. Eventually, in a partnership like this, the developer will see a job opportunity elsewhere, and leave.

But yes, I do agree with your sentiments.

 

[Swa]

If anything you can get a monkey finger painting with poo, but not everybody is good at coding

Difference is the finger painting will still look like poo. The point is you can teach coding and most people growing up in the digital age will understand it. Try to teach art, and by that I don't mean the way universities do, and see how good most people's "artworks" are.

 

[mic_y]

I would say that the approach that makes the most sense is as follows:

Both the dev and designer have their individual base rates that they charge for their work.

The partnership/company marks up these rate by 15-20% to cover for the costs of running the business, etc. Each professional gets paid for their work at their rate, and if there are any profits remaining after all expenses and tax, these are split at the ratio of each owners shareholding.

 

[crackersa]

It might have been said, but you are starting a business with someone which should mean 50 / 50. You think he will be all happy and all that if you are taking in the dough? Your commitment and your allegiance is to the company that you want to set up to make it a market leader.

 

[Zarkon]

U did not mention if this will be your fulltime job or start out as part time. And u did not say if u plan to get more employees onboard and grow the company in the future.

U should be the sole owner,there are plenty of designers/illustrators many freelancers and small business designers doing such work. There is no need to bring on a designer if it's just going to be the two of u.

If your friend and u plan on doing this as fulltime ,he can quote u on designs for every new project . If u plan on growing the company later on u can offer him employment or get another designer working for your company.

 

[NullHypothesis]

A wise man once said: In life there are two ships to avoid a sinking ship and a partnership

Seriously though, depending on where you currently at, I would first start out independent and send work to each other before starting with any formal agreement. Then see how things go etc. Even if you want to start a new company rather first do it alone and use the agency model (outsource what you can't do or is not good at).

But if you are in love with the idea of a partnership and want to share marketing expenses etc. or for whatever reason. The fairest option is for each one to be paid for the amount of work they put in on a project-by-project basis. Use a hourly billing system. With a set split there are so many things that can cause friction (if you both did the exact same thing it's a different story) and unless you know your partner very well it may not be the best idea.

 

[Stian]

Difference is the finger painting will still look like poo. The point is you can teach coding and most people growing up in the digital age will understand it. Try to teach art, and by that I don't mean the way universities do, and see how good most people's "artworks" are.

The argument btw coders and strictly designers is very old into this industry.
But at the end of the day a developer usually make more money than a simple designer that's just the way it always been.

However I do agree that you can't teach creativity, coding however it simply a skill set whilst
creativity at the other end of the spectrum it part of your personality, part of who you "really" are as a person.

Further more, as an employer, given a choice between two young trainee one being a simple coder and the other being strictly extremely creative, I will always pick the creative one!
From experience I've noticed that creative minded individuals when taught well often become AMAZING coders.

 

[Thor]

The argument btw coders and strictly designers is very old into this industry.
But at the end of the day a developer usually make more money than a simple designer that's just the way it always been.

However I do agree that you can't teach creativity, coding however it simply a skill set whilst
creativity at the other end of the spectrum it part of your personality, part of who you "really" are as a person.

Further more, as an employer, given a choice between two young trainee one being a simple coder and the other being strictly extremely creative, I will always pick the creative one!
From experience I've noticed that creative minded individuals when taught well often become AMAZING coders.

Bs

 

[Stian]

Bs

Reality buddy, if you don't know that a creative mind it a plus into programing then maybe you should consider the fact that you don't know as much as you think you do.
I didn't mean any disrespect, sorry if it hurt

 

[Thor]

Reality buddy, if you don't know that a creative mind it a plus into programing then maybe you should consider the fact that you don't know as much as you think you do.
I didn't mean any disrespect, sorry if it hurt

Okey oom Stian

 

[_kabal_]

The argument btw coders and strictly designers is very old into this industry.
But at the end of the day a developer usually make more money than a simple designer that's just the way it always been.

However I do agree that you can't teach creativity, coding however it simply a skill set whilst
creativity at the other end of the spectrum it part of your personality, part of who you "really" are as a person.

Further more, as an employer, given a choice between two young trainee one being a simple coder and the other being strictly extremely creative, I will always pick the creative one!
From experience I've noticed that creative minded individuals when taught well often become AMAZING coders.

You should have stopped after the first paragraph