A silly question? May be!

Seeker

Seeker

Vouchers Hunter!
Apr 13, 2009
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Hi Guys,

Recently, we (my friend and I) have bought a website from Flippa, we paid the price 50/50.

My friend is not on the Internet business at all. I found the website, completed the deal and I will host it, maintain it and do all the marketing.

Now my question is that: What would be the fair profit share?
50/50, 60/40, 70/30 or what?

I just would like this to be fair for both of us.

Your advise is appreciated, thanks.
 


You really should have talked about it beforehand.

Just like you should talk about it now. Hopefully you have a fair ratio expectation in your head, so does he, negotiate where both of you are happy.
 
you're going to have to explain to your friend that marketing will be the soul of the website. You don't have it, the website dies. Since you're the one who will provide the marketing effort, you're entitled to more. However, good luck explaining this to someone who is not aware of this business.

Word of advice: NEVER involve a friend (that you care about / don't want to lose) in your business - or in general, where's money to be made. Shit can get really ugly.
 
Garrett said:
If the original agreement was 50/50, then 50/50 is the fair one. :food-smiley-010:
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as for this: they paid the initial price of the website 50/50, he didn't say they agreed on anything about the profits generated afterward.
 
A word of advice.

Dont fuck over your friends. If the agreement was 50/50, honor it.

Who cares if they are useless, they are your friends for a reason. Do it to hook them up. I'm sure you have a ton of shit in the pipe
 
Garrett said:
A word of advice.

Dont fuck over your friends. If the agreement was 50/50, honor it.

Who cares if they are useless, they are your friends for a reason. Do it to hook them up. I'm sure you have a ton of shit in the pipe
Click to expand...

why, of course

I wasn't suggesting to screw him over. If the situation is as how he explained it, then he in turn must explain it to his friend. However, if they agreed to 50/50 profit share (as per how much they each invested), then it's only fair to stick to it. It's the OPs fault he didn't think of this before purchase and it would be a lame-ass move to demand more ;)
 
So he just made a financial investment and won't be doing anything else except collecting a check when you go into profit?

If that is the case I'd advise you to go for a few beers and discuss this VERY carefully. Make him aware of the extra work, time that will be putting in and any other expenses that you may incur.

Then offer him 1% percent of profit and tell him to negotiate and convince you why he should get whatever it is that he thinks is fair. Don't screw him but by offering only 1% to start with you are putting yourself in a much stronger bargaining position - you may shake on 70/30, 60/40, 55/45..... whatever. Just make sure that it's all agreed to in writing and not just a handshake buddy deal.
 
60/40 split... of course though it is a thing that you both agreed on at first. putting this in to prospective... you knew the risks.... offer to buy him/her out... go from there.
 
So it sounds like you only used your friend to leverage his money. If that's the case, pay him back his 50% with 10% interest and be done with it. Just explain to him that there's going to be a shit ton of work and you feel it's best to just pay his money back with interest. Take him out for a beer and life go's on.
 
AllBizNiz said:
So it sounds like you only used your friend to leverage his money. If that's the case, pay him back his 50% with 10% interest and be done with it. Just explain to him that there's going to be a shit ton of work and you feel it's best to just pay his money back with interest. Take him out for a beer and life go's on.
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This would be the easiest solution by far. (Since you have already done this. Otherwise, like others have suggested, DON'T do business with friends or family!! Things DO get uncomfortable in these arrangements.)

On the other hand, if your friend is wanting to get into the business or you think that you might be needing his money or skills in the future you can modify this a bit.

Pay him back his 50% for the purchase price of the site and offer him say 5 or 10% of the site profits in perpetuity or for a set period of time. Be sure he understands that "profits" are AFTER all expenses. (Which includes the value of your time on the site to keep it up & running.)

This way he feels that he helped you and got his money back with a continuing bonus. Check into "Silent Partner" arrangements if this might be more than a one time situation.

If you are starting a site that could rival say Amazon, then you have some serious thought to put into this.

If it is just an Affiliate site to add to your stable you can afford to be more flexible with it.

It's really tough to give you good & accurate advise without knowing all the details. Such as, how close a friend is he? What is his personality like? (Laid back or a little high strung?) What is the future of the site? Was this a one time thing? Are you looking for a business partner?

You get the idea.

Glad you were able to purchase the site & hopefully you get this sorted out in an equitable way that keeps you two close.
 
Garrett said:
If the original agreement was 50/50, then 50/50 is the fair one.
Click to expand...

It depends if he's gonna do more work on the site. Obviously if it just site there the distribution would be 50/50, but I think the OP is saying that he's going to do more promotion, monetization, etc..
 
AllBizNiz said:
So it sounds like you only used your friend to leverage his money. If that's the case, pay him back his 50% with 10% interest and be done with it. Just explain to him that there's going to be a shit ton of work and you feel it's best to just pay his money back with interest. Take him out for a beer and life go's on.
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A perfectly logical suggestion but still one that will most likely end up with seriously strained (if not wasted) friendship and resentment. One side doesn't get to unilaterally dictate terms to a partner after the deal has gone through.
 
You need to quantify what your work is worth and provide tangible evidence that you're actually doing the work.

Offer to buy him out outright, or let him buy you out.

Or, outscource all of the work and split the additional cost 50/50.
 
It is in his interest for the managing partner to get a larger share, as this will encourage the guy doing the work to maintain and increase profits.
 
One method you can take is to ask him how much he thinks he deserves/wants. If he says anything above 50% on his, I'd be careful on far you work on this into the future with him.

However, as others said this should have been discussed early before the purchase was made.
 
Seeker said:
My friend is not on the Internet business at all. I found the website, completed the deal and I will host it, maintain it and do all the marketing.
Click to expand...

Basically your friend was an angel who provided half the revenue for the website. Yeah, the big mistake here was not asking him before he gave you the money, "What do you want out of this?"

If you're basically running the site and doing everything, then it's not a fair deal to go 50-50 here.

I'd tell him that unless he is willing to do something productive for the business at some point, your goal will be to pay him back maybe twice his investment so he has no complaints. So if his cut was $5000 for the site, give him back 10K over time. See how he responds. If he demands 50-50 on everything, tell him you made a mistake, and ask him to buy out your half which might scare him into realizing he's fucked if you're not at the helm.

Because you have no agreement in place, you're in a position to really call the shots IF the url is ultimately under your name. Be prepared for a loss of his friendship or future help if you go the aggressive route though.
 
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