- Atlanta, GA
- Votes |
I really need direction in businesses. The business that I will describe for you can be any business - it can be an ice cream business, or even an office coffee service business. Forget real estate for one second. Let's pretend this is office coffee we’re talking about.[/b]
The model or structure of the business:
My employee or partner, depending on what you advise, puts no money upfront for equipment or products that are used to sell and generate income. Every time a new account is set up, it will cost me about $600-700 dollars in general. I would pay that amount each time a new account is set up, unless I got a large account with unusuall set up costs involved. He or she, the business partner or employee, gets new accounts by making their own schedule, then sets up with equipment and goods to sell (paper plates, cups, spoons, sugar, coffee, etc.). I won't be getting accounts or visiting the accounts unless there was an emergency like my partner or employee went away on vacation or got really ill. Depending on the number of employees, this business partner or employee would get a $100 bonus for scoring any accounts with a user/customer base of 75 employees or more. After the account gets set up, any profits derived from the business would pay me off first, until I get my money back that I initially invest ($600-700). Now, This would take about 2+ months to get my money back I've invested. Any profits that come in after I am paid off would be split 50/50. They would need to get their own health/life benefits.
Here are the questions:
1. Should I have this person as an employee or would it be better off for the other person (and myself) performing the work to be a part owner? Would they get, say 5 % owership, 49 %, 50%, or should it be ever increasing to increase their drive until they reach a certain percentage (49 to 51 %)?
2. Do I pay this person cash? and if so do I 1099 the person or W2 them?
3. Do I 1099 the person if they are a partner or employee?
4. Same question but for W2?
5. Where do I learn how to 1099/W2 someone? Dumb question I know.
6. Is this an LLC, LLP, S-corp...how do you see it and why?
Exit strategy: Do little work, have someone running the business, and if I ever want to, maybe I can offer an option for my ownership stake or just sell the company off to a bigger company in the same industry to pursue other ventures.
Thanks for your review and input.