iPom

Just about to register my business name etc for launching a new brand ... hopefully very soon (trade show in September so full speed ahead)

I have a business 'partner' who is excellent at the books side of things and knows the Australian business side of things inside and out. I on the other hand, own the intellectual property of the business ... It's completey my idea, my research etc.
How, therefore, should I split the business, profits etc?
She wants to keep to the business side of things whilst I do the promo and marketing etc.

My inclination is to go for a 60/40 split but I am not sure what is standard. I ran a business with my hub in the UK, so I did a 50% split on that of course.... but it's not the same here.

She is happy to store our goods at her place, plus she is happy to put money in to help start up the business and is giving up her full time job at Christmas to put 100% into this with me.

Opinions? Ideas?

cheers

iPom

walaj

A lot depends on her input and especially what risks she is taking:
putting money in - is it a loan (is it secured on any assets) that she expects repayment/interest on? If so, she is getting her (or some) return there. If the company folds, does she lose the money.
storage - there appears to be no special skills there - just a saving on renting a place out to store your product
books side of thing/local knowledge : you could pay one off fees for these. Is it advice she is giving or will she be making decisions and if so will they be operational or will they be strategic.

If you are not profitable, her time/knowledge comes cheap. But if you make loads of money , it is your idea, and this is going to be a major ingredient if the business is going to be sucessful.

I don't know how much time, effort, money, or your plans of how big you want your company to grow, but the exact agreement needs to be done professionally so you don't get stung at a later date financially, or your professional relationship breaks down affecting the business.

moneypenny20

Would you not be better off, sitting down with her and a legal advisor type person and discuss together. You could draw up a list of what you are bringing to the business against what she is and have the expert help you work out what each "bit" is worth to the business.

Good luck with it all.

iPom

The money is savings not secured no anything. If the company folded, yes, she'd lose the money.

Very good question - I hadn't thought of that.

It's a new Australian brand that's going to be sold through the Myer group (I have confirmation on this from Myer already) plus internet ordering and another large chain across NSW. There is the possibility of going completely Australia wide. The bank seem keen to lend us cash on the basis of Myer's interest.

Therefore, who do I see professionally to sort out this?

Thanks for the ideas.

walaj

just gone and lost the reply I did, so I will try again.

Ok unsecured amount, but need to differentiate between it being a loan or buying part of the business, as this will carry different risks for her and thus the return she should get.

As I am from an accounting background, I would have to say see an accountant. Their knowledge and training covers a lot more than just being able to produce a set of accounts or a tax return. They can give advice, but it is up to you to make the decisions. I suggest you make appointments with several accountants (I assume it will be similar to UK where initial meeting will be on no fee basis, no comitment - ie more of a sales pitch, than you getting all the advice you want for free!!) You want an accountant you can get on with and trust, find out what there clientele base is, do they specialise in certain areas, what services they think will be relevant to your business, basis of their fees etc If you have not already sought advice on the set up of your company some advice now could save you money (eg tax planning)

All the best

iPom

Thank you .... great points. I'll let you know when we launch ... (if we do!)