I have a question about how to go about using profit sharing to help finance my business during the first 2-3 years.
The person I have chosen to develop my ecommerce site said that he would be willing to take 50% of his fee up front with a back-end profit sharing package in exchange for him handling all of the web related work for our ecommerce site. My first thought is "yipee" because it frees up the rest of my capital for marketing, advertising, and admin costs. However, how do I develop a package that isn`t too generous but also adquately compensates him for his effort. Is there a going market % rate that is offered in these cases? Also, how common is it to negotiate a cap on how much he an earn?
FYI - I am in the online bookselling business if that helps your responses?