How to Share Profits in a Business Revenue Sharing System

Starting a business certainly requires no small amount of capital. For those who have business savings, capital is not the main problem faced. But it is different if you have not prepared everything and have limited funds. If you are one of those who have these problems, working with a profit sharing system can be the best solution. In the profit-sharing system, not only you get financial assistance to build a business, investors will also benefit in return.

There are three types of capitalists in this system, each of which has a different profit sharing calculation. These investors include:

Financiers as well as Colleagues

Capital and How to Share Profits in a Business Revenue Sharing System The first system that you can find is the financiers as well as colleagues. If you do a joint venture with a friend, this system is very likely to occur where your friend gives you capital as well as being an active colleague. Keep in mind that active coworkers are also employees.

Therefore, he is entitled to get two income, namely dividends from the given capital and salary from his work. Dividends or net profits are obtained after deduction of future investment and operational costs. Profit sharing is also adjusted by a large percentage of capital invested at the beginning by each capital owner.

The profits obtained by investors will be accumulated and given once a year. The second right that must be given is salary for performance so far. Different from profit, this right must be given every month, it can be at the beginning or at the end of the month depending on the business system adopted.

Investors in Stock

Capital and How to Profit Sharing in a Business Profit Sharing System Capital that finances a company in the form of shares is often referred to as an investor. An investor usually only gives capital and is not involved in operational activities.

The method of profit sharing in this capital system is the manager gets a monthly salary and dividends. While investors get income from dividends. Before starting a business, the two parties must first make an agreement on what percentage of each share.

Investors in the form of Debt

Capital and How to Share Profits in a Business Profit Sharing System This type of capital can also be called a creditor. A creditor is almost the same as an investor in a business, which is simply giving capital. But the difference is that capital from creditors is given in the form of debt. Just when you owe with institutions such as banks and others, in a debt agreement there must be a principal, interest and maturity.

Capital status is debt and there is no bond between the business manager and the creditor. So that the repayment is done in accordance with the initial agreement and however much dividend obtained does not affect later debt payments. Likewise, when a business collapses, creditors cannot be involved and business managers must continue to undergo the obligation to pay debts. You must still pay according to maturity. If it has passed the agreed tempo, then the risk of increasing interest must be faced by business managers.

Therefore, before deciding to take capital through a creditor, you must calculate in detail the amount to be borrowed, the ability of the business to obtain money, and the time period for you to be able to return the borrowed funds. Do not let the numbers you release are unrealistic and burdensome when you have to pay.

Those were the three forms of profit sharing that are often encountered when establishing a business. Whatever the system above is fine, but you still have to pay attention to a few things. Specifically for capital from investors, you can make a clear agreement on whether capital is only obtained from investors or from both parties. You must make the agreement as clearly as possible so that problems do not occur in the future. For all types of capital, partners must know the development of the business, the time limits of sharing of revenue must be clear, and what is the model of the distribution of profits.

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