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Out-Of-The-Box
10-24-2005, 01:55 PM
We are a brand new business in our development stages. We need a lot of flash, web, and technical work done. Some of it we cannot do ourselves and need to outsource.

We have found someone who is willing to help us out and do it as an "investment", in other words; he will do the work, keep track of what he does for us and that "dollar" amount is what he is investing in our business. We're doing this because of limited funding, obviously.

Any suggestions on what we should offer him as a return on his investment? Double back, 150% back, etc. etc.??

Thanks for the help

BusinessMan
10-24-2005, 02:15 PM
Personally, I'd be a little wary. I have seen these things come back to haunt: service providers later claiming that they were fundamental drivers and demanding ridiculous settlements.

I'm not saying that is the case this time, as obviously I have no idea, but I would suggest caution.

I would tend to agree the details up front, so that both parties fully understand exactly what will be payable later. This could even be subject to several scenarios. I'd also DOCUMENT the understanding.

I know... it doesn't sound too friendly.... but it is supposed to be business after all, and clear understandings can prevent major headaches later.

Out-Of-The-Box
10-24-2005, 02:19 PM
Absolutely, we wouldn't do it any other way. Everything will be fully agreed upon and documented ahead of time as well as some type of a "cap" on the amount.

I'm just not sure what is fair for a ROI...

Maverick
02-02-2006, 04:34 PM
I suggest visiting elance.com. Here you will find many web designers, consultants, writers, and etc, will to BID on your project. The GREAT thing about this service is they have an eBay like feature of client feedback and even show how much income a specific client has made through their system.

It's free for you to post and they will serve to collect the payment, take out their fee like eBay, and pay the agreed balance to the service. Works similar to PayPal collecting the $$, serving as a middle man, and paying the consultant.

These people do quality often work for very cheap!

Check it out.

pahagwl
02-18-2014, 11:39 AM
Before accepting any sort of investment, I would recommend you to have a clear agreement with him with regards to terms of investment. The agreement should be completely free of loopholes which the other party might exploit later on. Now coming on to the subject of return to him, I would recommend that you should agree only to give a percentage of profits to him and not talk in terms of percentage of the original investment because sometimes the business might run into a loss, and it would become very difficult to give him that return on his capital. I can not recommend an exact percentage because it depends upon the amount of capital he has invested and the amount of work he is willing to undertake.

sdsnook
02-18-2014, 11:46 AM
Sounds to me like you have worked everything out and I am sure it will work out just fine. I myself have helped people like this and it works out well as long as there is a mutal understanding of expectations. It is a good idea to have a written agreement as well. Good luck!!! Hit me up if you need more help, i like helping!!

crimsonghost747
02-18-2014, 01:20 PM
Your business is not even running yet, there is very little chance of calculating a realistic ROI. Two ways which I would consider: He writes down what you owe him and you pay it to him when you can... with a certain interest rate.

Or option number two, you give him a small percentage of the company.

mikka254
02-18-2014, 04:19 PM
We are a brand new business in our development stages. We need a lot of flash, web, and technical work done. Some of it we cannot do ourselves and need to outsource.

We have found someone who is willing to help us out and do it as an "investment", in other words; he will do the work, keep track of what he does for us and that "dollar" amount is what he is investing in our business. We're doing this because of limited funding, obviously.

Any suggestions on what we should offer him as a return on his investment? Double back, 150% back, etc. etc.??

Thanks for the help

This type of agreement can get tricky really quickly. I would suggest to you to save more money and professionally get the job required done without any strings attached. These type of agreement usually start as mutually beneficial but then become very damaging to your company once a little success is on the horizon.

delusional
02-19-2014, 07:37 AM
Just have a lawyer go over the contract and look for anything that would put you in a bad spot. I don't think it would immediately mean he is trying to scam you guys but just to be careful...
Also try to track his hours yourself. You don't want him claiming he worked 25 hours/day afterwards.

owesem75
03-20-2014, 11:51 AM
Your business is not even running yet, there is very little chance of calculating a realistic ROI. Two ways which I would consider: He writes down what you owe him and you pay it to him when you can... with a certain interest rate.

Or option number two, you give him a small percentage of the company.

Why I always find your comments so timely? now I am a fan! I am very impressed with your comments and posts. why I say that? I actually just started my own website and I am working with somebody (who is a friend by the way) and asked him to do the online marketing through facebook. Although I have given some figures on his commissions etc, we never had in writing YET. I will be on a short break from my work and will study it further and see different pay or income sharing schemes that would be suitable in our setup. I just hope it is going to be fair and the partnership long lasting. wish me luck!

scandal89
03-21-2014, 07:20 AM
wow it s realy tru

pahagwl
03-21-2014, 02:04 PM
Just have a lawyer go over the contract and look for anything that would put you in a bad spot. I don't think it would immediately mean he is trying to scam you guys but just to be careful...
Also try to track his hours yourself. You don't want him claiming he worked 25 hours/day afterwards.

I cannot possibly stress enough on the importance of due diligence in these deals. As delusional points out it is very important to that you get a lawyer and have him go over all the points mentioned in the contract. This is due to the reason that the interpretation of law lets off a lot of loopholes. And these loopholes, if not taken care of can really harm you and your business interests in the long run.

DomDom
03-21-2014, 04:46 PM
It depends on the potential of the company. Its important to have an iron clad contract so you know what to expect.

mikelouis
03-22-2014, 03:06 AM
He should just be paid to work on the website. It will be hard to know what exactly he owns in terms of investment. Personally I would just give him the money for developing the site and end his contributions there.

useruseruser
03-24-2014, 11:45 AM
Yes you could definitely get that done. There are options out there. You could even try to work out a deal with local contractors in your area. There are people in this sort of situation all of the time, you could even ask to set up a payment plan.

centralnetwork
03-24-2014, 02:10 PM
Let me share my own experience with a guy whose startup business with similar requirements needing to hire a server admin, webmaster, designer, content provider and so on, but running on a tight budget he was unable to pay for all.

We met in the crossroad where he was stuck with no money but to pay for the server and some administrative business-side expenses, and I was seeking an opportunity to learn just about everything wanting to be a successful webmaster and future business owner.

He gave me the opportunity to play with his server and learn, then becoming the one-man band doing web design, writing content and even advertising the business. With his advice and support, I was able to master different business areas in a win-win relationship; he was saving money because I was not receiving a wage or monetary return, but I was earning experience and building a network of contacts that later helped me to go through with my own business.

While most of us really need money, sometimes there are people needing opportunities above all. You might find someone who can do the job in exchange of a little financial enticement besides the golden opportunity to grow as a webmaster, server administrator, web designer or any position you actually need to fill with the right candidate... Or at least you may try it.

DomDom
03-24-2014, 03:27 PM
Yes you could definitely get that done. There are options out there. You could even try to work out a deal with local contractors in your area. There are people in this sort of situation all of the time, you could even ask to set up a payment plan.

Good idea, local contractors can really help you out if your plan is good enough.

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12-08-2019, 06:29 AM
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