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Business question

Discussion in 'Off Topic Threads' started by wireguy, Oct 14, 2010.

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  1. wireguy

    wireguy TS Member

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    I know there's people on this site who are business people. I am creating a website as a money making proposition. If this works, and I believe it will, big bucks outdoors advertisers are going to want a presence on this site. I've talked the guy who built and maintains my gun clubs website into doing mine. You can see his work at

    http://www.lemongrovegunclub.com/


    I want this guy to have a % of the business for his end. I've never done anything like this and I have no idea what his end should be.
    It's my idea, my concept, and I will be doing the day to day monitoring.
    I'm thinking 10%. Am I anywhere near on target?
     
  2. kfbagt

    kfbagt Member

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    depending on the complexity of your site, you may be better off paying someone to initially program the site and set it up. Once established, its pretty easy to update a website and plug in new advertisers banners. i would save giving away a percentage of my business as a last resort. however; its hard to answer your questions about whats fair without knowing how complex and what type of site you are talking about. websites can cost anywhere from a few hundred bucks to a $100,000 to set-up depending on what youre doing. so your question about what to offer is like saying "hey, im building a house, what should i pay to get it done"
     
  3. wireguy

    wireguy TS Member

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    It will ultimately be heavily interactive with lots of photos and reader submitted material and commentary. Divided into broad areas of interest.
     
  4. kfbagt

    kfbagt Member

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    well if its a discussion forum sort of like this one the set-up is pretty straight forward. you can do it for free by yourself but its complicated if you have limited knowledge. you can get a really nice turn key solution for about $3500, to me that would be better than giving a percentage away
     
  5. birdogs

    birdogs TS Member

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    The question you must answer is how much time and attention will the tech guy give yoyu for a specific percentage? The next question is how do you get out of your deal if he does not live up to his part of the bargain?
     
  6. wireguy

    wireguy TS Member

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    That's why I want him to be an owner birddogs. I want my tech guy to have a vested interest.
     
  7. wireguy

    wireguy TS Member

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    As I expected, some great insight here. Thank you.
     
  8. kfbagt

    kfbagt Member

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    i think you missed what hes saying, if he is only a 10% owner you will want to make the decisions since you own 90%. but if hes the only guy who knows how to do the work and doesnt like your ideas, then it may not get done. do you see the problem there?
     
  9. kfbagt

    kfbagt Member

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    i think you missed what hes saying, if he is only a 10% owner you will want to make the decisions since you own 90%. but if hes the only guy who knows how to do the work and doesnt like your ideas, then it may not get done. do you see the problem there?
     
  10. g7777777

    g7777777 TS Supporters TS Supporters

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    There are millions of web sites - what would make this one a money maker over the others?

    Web sites are web sites are websites unless your name is Google

    regards from Iowa

    Gene
     
  11. Frank C

    Frank C Well-Known Member

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    When you make your first million, do you really want this partner to get his 100K cut for making a website???
     
  12. dverna

    dverna Active Member

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    Knowledge is power.

    Your 10% "partner" will have control if you are not careful.

    You need to see an attorney now; or you will be seeing one later. This is especially true if you are correct, and what you have becomes a "money maker".

    You are better off finding a kid to design the website for under $1000 and seeing if the boat will float. You can always upgrade/enhance at a later date with the money you are earning.

    Don Verna
     
  13. BFJ201

    BFJ201 TS Member

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    Remember Equity Financing is more expensive than debt financing. If you are doing what you are saying that is equity financing. To really determine what ownership percentage selling him in exchange for services you should do a cash flow analysis and determine a value of your business based on these cash flow forecasts and discount it back to present value and give him a percentage of that present value that his services are worth. If he won't do it for that percentage you are better off paying him cash for his services vs giving up too much of your ownership percentage. For instance if you plan for free annual cash flows of 50,000, 100,000, 200,000, 350,000, 500,000 and 5% growth thereafter with a 30% cost of Equity the present value of the business is $1,011,466.69. Giving a 10% ownership would essentially be paying $101,146.67 for services. Of course I have no idea what your projected free cash flows are or your cost of equity but this a demonstration of cost of giving away ownership.

    James Allen
     
  14. otnot

    otnot Active Member

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    I own and manage my own website and I would if I were you learn to do it your self. If you have to take a class at a community college in website design do it. I use a program called Dreamweaver to manage my site. It is pretty straight forward piece of software. There are plenty of ready made templates out there that all you have to do is add content to it and your up and running. Start reading webmasterworld.com and you will be up and running in under a year. Buy your own domain name and host it on a reputable server. Good luck.

    Jim
     
  15. halfmile

    halfmile Well-Known Member

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    Green Bay Wisconsin
    AI would no more give a piece of the action to a website crreator than I would give an electrician part of my store because he wired it.

    Pay for the job and get on with it.

    HM
     
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