Hi there, I'm not sure if this is the right forum for this, so apologies if not!
I’m in need of some advice as I’ve been offered a profit share in a business and don’t know where to start when it comes to negotiating rates and what would be considered fair.
Here is some background:
The company is building an online application (already well progressed) for businesses.
I will provide the following expertise:
- Providing User Experience Testing and Feedback to help the engineers polish the tool
- Developing ‘Unique Selling Points’ for marketing messages and other promotional / informative content
- Help to write/develop knowledge guides, FAQs and supporting documentation and content for the tool
I will not be providing coding, engineering, infrastructure or other services. My main focus will be on user experience, testing and creating supporting guides.
The business owner has offered me a profit share and has said ‘Name your terms’, he will then review my offer and I imagine we will negotiate from there.
I will produce a request for information from the business owner and will ask for the following:
- Projected turnover and profit, year by year
- Price point for the product
- Evidence of his other business successes
- When will this product be launching?
- How soon does he expect to turn a profit?
- Will I get shares in the business or just a profit share?
I have three main questions:
1. What other information should I be asking for to help me make a choice?
2. On what should I base my request for profit share?
3. What is a good starting point in terms of negotiations?
I should stress that I know this may be risky, but I also want to be realistic in terms of what I could earn, and clearly if the product does well, I would want to do well too.
Any advice would be *very* much appreciated!