Forum Moderators: LifeinAsia
Would you work for a salary or would you want a percentage of the online sales or both? The retail store in question is a surf and skate shop and is something that I know a great deal about. I would like to turn this into a possible career so I'm thinking about a partnership. Would 30% of online sales be a realistic number since I'm doing all the labor? Also, I've known this guy for 20 years and he's a good guy.
What would you folks do? Thanks in advance.
If you do go ahead and do it anyway (and yes, it is possible for things to work out, but history shows it's more likely not to work out well), make sure you have a very good partnership agreement with everything spelled out, especially what will happen when you get "divorced."
Thank you
Jim
My suggestion would be to charge a setup fee (to cover your development time) and then a percentage of online revenue to cover your maintenance time. Another suggestion would be to add some bonuses for performance milestones (e.g., $1,000 bonus when online sales hit $500K)- plan for greatness, you just might achieve it!
If for some reason it doesn't go anywhere (or it turns out you don't like it that much after it becomes a "job"), then you at least got paid for the development part and your friend wouldn't be any worse off than if he had paid someone else to develop the site.
If it does take off, then both of you will continue to be motivated to continue to make it grow.
... The retail store in question is a surf and skate shop and is something that I know a great deal about. ....I've known this guy for 20 years and he's a good guy.
These two things make me scream "go for it" and go for the long-term commitment of a salary PLUS percentage of internet sales. Let me give an example on the other end of the spectrum . . .
I have one customer that loves my work, in the Renaissance I guess you'd call him my "patron." :-D Several times he has asked me to partner with him for a percentage. Great guy, checks are always good, but his site is a complex topic that I know very little about. He points the way, I write the programming. This, and this alone is the only reason I have to decline a partnership.
But something you know and love, something you know the market for, something you're not likely to grow weary of - heck yeah, draw up that contract and talk turkey. :-) You will be motivated by your love of the topic and this will make both of you a fair living.
If it's your friend, charge him a modest flat fee to set the site up, show hom how to use the CMS, introduce him to some basic seo techniques, adwords and such and then get out.
I'm just looking for business advice on here. The guy I'm going to be working with doesn't have real deep pockets so I can't quote something crazy like $75 per hour. I don't want to bid myself outta a job. That's why if I go something like $20 an hour plus 30% of online sales... it's a little easier to swallow. I was also thinking of performance goals... like once we reach $150,000 in sales... I get an additional 10% of online sales. What do you folks think about this and is there anything else I should be looking for? I was going to draft up a contract and have a s.c.o.r.e. rep look over it.
Thanks everybody.
He says I would be better off doing the affiliate thing.
He's got me thinking. Any thoughts?
I have been immersed in the surf and skate culture for 20 years and it's a part of me.
This, and the fact that you know and trust the guy, are strong reasons to go for it, I'd say.
Do think about what happens in the future if you want to exit the business, it'll be helpful to lay this out up front in writing.
hth, a.
PS an alternative angle: set up a new company, owned by you both, to do online sales of skate/surf goods. That way you can share the equity ownership, without the whole thing being tied to his store.
Ha! I just got off the phone with an old friend who has quite a bit of partnership experience and he's telling me not to do it.
lazy_guy you're living up to your nickname. :-) You're going to have to go with your gut instinct on this one.
Alternatively, can you get **really** drunk with this guy and spend an evening in the jacuzzi with him, or spend a weekend in a hotel room and not come out hating each other? Basically you're entering a marriage, like it or not. If you can be tied to it for a better part of your life, therein lies your answer.
Anyways, I'm going to meet with him today and talk about a few things. Is there anyway of finding out what some other surf/skate shops are doing financially... especially in ecommerce? I'm being told that the industry is hitting some hard times and I'm not sure if this venture would be worth it. How many of you buy clothes, shoes and what not on the web?
Thanks,
Jim
Is there anyway of finding out what some other surf/skate shops are doing financially...
Here in the UK you can request the accounts of other companies from Companies House (the government body that deals with corporate registration), maybe there's something similar where you are?
best, a.
