Dear RRS braintrust,
I'm working on setting up an LLC partnership for small business ownership and I'm curious how anyone with experience doing this would approach the situation. Current plan is to limit it to just this one business and it will only be me and one other individual. We will be taking over an existing business in a field that is related to my current business, which will be closed and absorbed by the new one.
Based on numbers from the past couple years, I'll be bringing an additional ~12% of gross revenue from my current business into the new one and my partner will be bringing nothing. With that in mind I'm thinking an ownership share of 56% for me and 44% for him. Is this standard, or at least rational thinking? Should we be aiming closer to 50/50 with scheduled payouts to recoup my initial "investment"? Something else?
But wait, there's more... In addition to this, I have roughly 15 years of work experience in the field and 10 years experience running my own business in the field and a professional license while my partner will have 1 year of work experience in the field, no license yet and no experience running a business, though he does have some clerical/managerial type office experience that can translate minimally. How would you value this with regards to ownership percentages, if at all?
Simple round numbers to clarify:
New business gross: $100,000
My current/old business gross: $12,000
Me: 15 years field experience, 10 year business ownership, licensed
Partner: 1 year field experience, zero business ownership, not licensed
How would you structure this?
I'm working on setting up an LLC partnership for small business ownership and I'm curious how anyone with experience doing this would approach the situation. Current plan is to limit it to just this one business and it will only be me and one other individual. We will be taking over an existing business in a field that is related to my current business, which will be closed and absorbed by the new one.
Based on numbers from the past couple years, I'll be bringing an additional ~12% of gross revenue from my current business into the new one and my partner will be bringing nothing. With that in mind I'm thinking an ownership share of 56% for me and 44% for him. Is this standard, or at least rational thinking? Should we be aiming closer to 50/50 with scheduled payouts to recoup my initial "investment"? Something else?
But wait, there's more... In addition to this, I have roughly 15 years of work experience in the field and 10 years experience running my own business in the field and a professional license while my partner will have 1 year of work experience in the field, no license yet and no experience running a business, though he does have some clerical/managerial type office experience that can translate minimally. How would you value this with regards to ownership percentages, if at all?
Simple round numbers to clarify:
New business gross: $100,000
My current/old business gross: $12,000
Me: 15 years field experience, 10 year business ownership, licensed
Partner: 1 year field experience, zero business ownership, not licensed
How would you structure this?
