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Starting a Graphic design Business

Hi,

 

Me and my best friend are graphic designers and we want to start our own graphic design firm from home. I have a question regarding the share of profit that each of us will get from the business. Actually my partner will mostly be involved in finding clients(both online and otherwise), getting works from them and doing business dealings with them. And I will mostly be doing the actual work, that is, making the designs for the clients. So my question is how are we going to share the profit between us? Will it be fifty fifty share? Will I get more as I will be doing the hard work(designing) and my partner get less as he will be doing the soft work(hunting for work and business dealings). To be precise, how shall we divide the share?

Please help.

I didn't find the right solution from the Internet.

References:-
https://bit.ly/2KKz72m
Motion Infographic Animation Company

Thanks!

Hi,

This is something that you both need to decide, but it can be very difficult because 1 partner may put in more time and the other may put in more money.

If you believe that both of you will meet in the middle, then a 50/50 may seem fair. However that has never been my experience in any startup I've helped work with or in any business I've had partners.

One usually works harder, and one usually puts in more money.

Also, if one person is more of the driver of the business.. it may make more sense for one person to have just a bit more equity like a 52% ownership.  This means that you'd have more advantage in decision making.  You will also need to make it clear that either of your shares could be reduced if you brought in another partner or found a capital investor.

All great questions for a lawyer as I'm not a lawyer and cannot provide legal advice... but I'm hoping to give you things to think about.  My advice is to definitely agree upon a shareholder agreement/partnership agreement before starting the business.  As cleaning up the mess after the fact can be a very messy divorce and money can make people crazy. 🙁

A great tool to use to analyze time invested vs money invested is a tool called the Pie Slicer.  Watch the video on their webpage HERE.

I wish I found this tool earlier on in previous ventures. It's a very awesome way to track time or money invested where you can allocate or earn shares based on performance or money spent. You should both be tracking your time right off the get-go.

Hope this helps. 🙂

Jolene

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