Everything in business is eventually going to boil down to money. Any marketplace is all about dollars and cents, and your success as a businessperson hinges on your ability to make more money than what you put in. This includes a wide range of expenses, especially your business partners. The type of arrangement you have with your partners is an important thing to consider.
It might seem relatively simple when you stop to think about it. After all, if you’re planning on setting up a business and need a business partner, things are going to be a 50/50 split, right? Well, not so fast. Who says that this partner gets 50%? Did he or she contribute equally to the business? Did this person invest more than you but the business was still your idea?
There are many aspects here to consider, and that’s just talking about one business partner. Now imagine that you have two or more business partners that you have to worry about paying. Things can easily get confusing, and if any partner feels cheated or slighted, then the relationship can dissolve and the business can crash.
It’s also important to approach paying business partners carefully due to the amount of money you may have to invest and even the amount of money you’ll be earning in profit if and when your business is successful. For instance, if you took on a business partner to get started but are barely making enough money to keep afloat, then how can you and your partner both live off the money?
There is a logical way to go about this, no matter what the situation is. When you’re first starting your business, you’re going to write up a business plan that maps out your expectations and everything that needs to go in the business. You should also do this with any partners you take on. Map out each person’s involvement with the business.
By doing this, you’ll figure out the fairest pay scale imaginable and no one will be slighted. Pay attention to who does what, who wants to do what, who invests what amount, and any other factor you can think of. Then, like a basic math class, figure out who is vested more in the business and then who should subsequently earn more as a result.
This has to be ongoing, too. Your business will have to be constantly maintained, so you can’t expect to pay your partners salary if he or she abandons the business after it’s up and running.
After the business really gets going, you have to treat your partners like employees – they’ll do the same to you when it comes to money – and only pay out for what you put in. Business is not a charity, so be sure you do the right thing when paying your partners.