Home – New Forums Starting your journey Splitting Up the Imaginary Pie

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  • #991198
    Dan Lawson
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    Hi Soloists,

    In the last month I’ve stuck my neck out, followed my passion, stared down the risks and starting my dream business providing photography, filmmaking and photo booths for events to make them truly unforgettable.

    I have a question that I’m struggling to find succinct and simple answers for; but maybe that’s the point, its a difficult question.

    I have 2 partners at the moment, one for the marketing and sales side as well as one helping me with the videography and general creative side of the business.

    I would like to honour their participation with giving them a slice of the pie, at this stage considering a 10% share for both of them. I’ve invested $8000 of capital into the business at this stage.

    Do any of the soloists out there have an advice for me? There is only a small amount of money coming in at this stage so how can I offer financial awards that have value in the meantime? How do options work in small business, and have any of you explored this side of the business world?

    Any and all help will be highly appreciated! Happy to be pointed in the direction of any resources that may help.

    Thanks in advance!

    Regards,

    Dan

    #1180431
    bluepenguin
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    Others may disagree, but from my experience I’d say you should avoid giving away/selling shares of your business unless it’s absolutely necessary.

    It’s much easier to be the one person with the vision, passion and all the decision making rights, than to try and share that with others – especially when it’s your dream.

    There are definitely plenty of partnerships that work just fine, but if for some reason a partnership doesn’t work so well, the tension in the business can kill your motivation, enjoyment and damage relationships.

    #1180432
    MissSassy
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    You really should get some legal advice ASAP.

    In your post you firstly describe these people as your 2 partners and then you are saying that they are only worth 10% each.

    My Question is: What do they think they are?

    Naturally your business is new and not making massive amounts of money but what are the expectations from the people you yourself call partners?

    #1180433
    Dan Lawson
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    MissSassy, post: 210459 wrote:
    You really should get some legal advice ASAP.

    In your post you firstly describe these people as your 2 partners and then you are saying that they are only worth 10% each.

    My Question is: What do they think they are?

    Naturally your business is new and not making massive amounts of money but what are the expectations from the people you yourself call partners?

    Thanks Miss Sassy,

    Your post and embedded question was really valuable. It’s quite a confusing and treacherous subject to talk about and since your post I’ve thought about it further. You’re correct in saying that 10% does not a partner make but my issues were of capital investment, of which I am the sole contributor, and also the business was my idea to begin with.

    Then again, I don’t believe I’d have nearly as strong a business without these two partners and such I should reward them accordingly. At this stage I’m thinking of splitting the business up into three pieces; 50/25/25 or 60/20/20. I believe that is a fair deal, and the others believe that too (one was happy with 10 the other suggested the 60/20/20)

    Regarding approaching a lawyer, you’re right as well but I feel nervous about approaching the subject as there are so many unknowns. Also, at this stage I’m a Sole Trader but I’d like to incorporate and set up a Limited Liability Company. I don’t know which steps to take so I guess I’m a bit lost.

    Thank you very much for your help, there was some good advice in there.

    Regards,

    Dan Lawson

    #1180434
    MissSassy
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    Hi Dan,

    It doesn’t have to be difficult, one of the other members here http://www.legalvision.com.au specialise in small business, they will give you a fixed price for the work and will happily let you know how they can help you. Having a written partnership agreement needs to be a priority for you all so make that your first task. Speak to Ursula Hogben at Legal Vision she is very easy to deal with, very friendly and incredibly knowledgeable.

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