Forums: Discussions for entrepreneurs and small business.

Hello, new member here.

I am currently putting together a "cooperative local theater company". I intend for this to be my main business, as general director and founder. The other people involved will do so on a profit-sharing basis after expenses on each theatrical production we put on. This is a step up from typical volunteer based community theater. I have no capital to enable me to make this a professional group with salaries, nor is the market here are large enough to support that. Thus, there may be no profits, there may be small profits or there may be large profits. We will be looking for sponsors to cover our production expenses in exchange for good publicity. In that fashion, all of the tickets sales will be profit and will be shared.

I see three levels of profit-sharing. Those who simply work performances, such as stagehands and technical assistance people will be at the lowest level, since they have invested the least amount of time. The next level will be those who have put in more time, including actors and ticket sales people and such. The third level will be administration, including the stage director, marketing and publicity people and the like. The principle being amount of time invested. Is there another better model I should consider? How shall I present that to the team? (And I have already assembled a good basic team who love theater and want to be involved.)

This is still not so clear to me, though. If I were to work with a time clock, I`m not sure that the person doing the marketing is putting in any less time than the stage director. Practically, it`s probably the opposite. Nonetheless, it is generally assumed that the marketing director is higher administration, while the stage director is closer to the performance staff. And where do I, founder and general director, fit in? I worked up one scenario where the "day workers" would get 2.5% of ticket sales, the highest level administration get just under 4%, and I would get just under 8%.

I don`t know how this works legally. I was thinking of simply creating a basic work agreement with the compensation being the percentage level. It will be impossible for me to know exactly how many people will be involved, so I can`t, at this stage, determined precise percentages. But I want to have some agreements signed already, both so it looks professional and creates a sense of obligation. My dilemma is how to phrase it, and how to define it.

One other aspect is decision-making. I believe in democracy and in hearing all views, but do have certain vision for the group. Not everybody in the group may share that. I`m not opposed to compromising, but at some point I may want to make a clear call. I think it is important to do so every so often, because otherwise the group may not be fulfilling for me. For example, which musical should we put on? Is that selfish or is that right if I veto a popular choice?

To summarize, does the percentage breakdown seem fair? How shall I create signed work agreements? How to balance group consensus and my personal preferences in decision-making? In other words, in what sense am I in charge of the group and in what sense should I be just a part of the group?

Thoughts and inputs eagerly awaited! Thank you.

Why not make it a not-for-profit, get charitable donations (that can be written off), and make sure all income is disbursed toward materials, costs, production, and your own salary?