How do you determine how much your investor gets paid?
Posted by admin in Finance Monday, 28 February 2011 18:48 3 Comments
I’m considering opening a little BBQ restaurant but i have no money. I have someone that would fund it but I am fuzzy on how they get their cut. Do you work out a percentage of sales? percentage of gross income or net sales? and how often, every week, bi weekly, monthly, yearly??
or are all these things something that can be negotiated with the investor?
I’m basically just looking for what the norm is with this kind of situation.
Please don’t give me a “biz” website to look at.
It’s like this, if a man invested in you, and your doing pretty well share the love. If not, give enough to let them know that your glad the invest, but not to much to bankrupt you. In other words, enough that you can afford easily.
You should set a salary or hourly wage for yourself, probably lower at first. Then if there are profits left over after you pay all the bills and yourself, split those 50/50 with the investor.
If I were the investor I would want a percentage of sales say 7%. I would want it at least monthly and I would like some input on how to run the business if sales should begin to falter. I would also want to look at the books every month.