I’m in the planning phase of a new, 3-person business partnership. The idea is to split all investment and profits equally. That means all three of us will share the workload, share in the cash outlay, and share in the profits at an equal 3 way split.
We agree on the “principals” of our agreement. What I’m unclear about is how to plan the logistics of revenue sharing.
My questions are:
After we reach our break-even point…
Should we define a set monthly salary for each partner, with the remainder going back into the company? If we see larger profits than expected, then we pay out bonuses at a planned date.
Or should our monthly share be a percentage of profits? For example, each of the three partners gets 25% of profits, with the remaining 25% going to the company.
What would be a good rule of thumb on deciding what percentage of profits gets reinvested in the company? What percentage should be budgeted for marketing?
Just looking for general guidance, examples, etc. If you’re a business owner and involved in a partnership, I’d love to hear about how you structured things for your situation. What works? What doesn’t?
Thanks in advance…