View Full Version : Splitting the profit

07-31-2019, 12:17 PM
We started a business, it's been just the husband and I working. We got in with this guy that keeps us super busy, but really no money comes from it. At first we did things hourly, but then this guy decided to try and split profits per job with us. Problem was he always bid low to beat competition, he never spent time on a site to actually see if only X amount of work needed done, or if behind X there was always Y and Z. For example, a customer would call and say they needed a new roof, he would jump on Google Earth and estimate size, give the customer a quote and then send us out to replace the roof. But what he would miss is the rotting below the shingles, so then we would have to spend more on materials and more of our time to repair everything properly.
Finally when we told him we no longer could make ends meet on a personal and business level, he thought about switching things. He said we would run everything through our business and pay him half of the PROFIT. But he still wants labor from us to be free. So if my husband goes to a job with his helpers, we subtract the helpers labor and job materials from the total budget, but nothing to compensate my husband's time on the job. Then we would split the profit 50/50...
And we were always told to pay ourselves first...
Question is: should we be paying my husband for his time on a job out of the budget BEFORE figuring the profit share? Because he is technically an employee to the business and does 90% of the work. OR should we do the 50/50 profit split and then pay our overheads plus my husband's pay?
Thank you in advance for any advice!

09-10-2019, 02:02 AM
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04-04-2020, 12:03 PM
Splitting the profit is really good. It is simply a very basic thing to do right there. - Phillip Elden (https://phillipeldenoregon.com/)

12-15-2020, 04:05 AM
I would definitely make sure he gets paid first. Then he is at least guaranteed some income, instead of you having to rely on the differing profits, where you most likely will get very different payouts from job to job. It would make it a more reliable solution for both you and your husband.

02-22-2021, 04:23 AM
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02-23-2021, 12:12 AM
Some companies split their profits equally, while many others pay each partner a salary and then divide up remaining profits. Begin by deciding the roles and ownership of each partner and their assigned salary and expense accounts. After that, you can discuss your profit splits