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How to Share Project Earnings When Partners Live Across the Globe
Im looking to collaborate with someone - ideally another indie maker (if thats you, email me at [email protected]). Im currently building an analytics tool specifically for landing pages.Â
Foreseen one main discussion (the revenue split) How to split revenue in a straightforward, cost-effective way without forming an LLC or a dedicated business bank account.
Foreseen one main discussion (the revenue split) How to split revenue in a straightforward, cost-effective way without forming an LLC or a dedicated business bank account.
I plan to start many similar projects, so it seems not realistic to set up an LLC for each one. One idea is to use an affiliate style system ( routing payments through Tolt and splitting the revenue ), but this isnt ideal.
Ideally the solution should allow for only the revenue after costs be distributed. Affiliate apps can approximate this setup, but I want to know if anyone knows another solution.
Ideally the solution should allow for only the revenue after costs be distributed. Affiliate apps can approximate this setup, but I want to know if anyone knows another solution.
What methods are people using to split revenue in a transparent, inexpensive, and largely automated?
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More detail is needed here - what exactly do you want the business partner to do for their share of the revenue?
Pretty much pay for some tools, help me develop the application, contribute with ideas for distribution
A partner as in work together, not just an affiliate
Yeah so an affiliate program doesn't make any sense in this scenario. What you are describing is a true business partner that deserves equity in your business. This is not a contractor scenario either as you're describing tasks with very little upfront direction or guidance on exactly how to get the thing done.
Create one single LLC for all of your projects and write up an agreement that states your business partner will get X% of revenue/equity/whatever you decide for Y projects under the LLC. And of course consult a lawyer when dealing with this kind of stuff, they can help you draft the operating agreement.
I get that you want to save some work or something like that when you say that you don't want to create a business bank account or LLC, but you really do want these kind of structures in place when you are operating a business with multiple partners involved.
its not about operating a business, rather develop and launching an idea
Stripe Connect through multiple payees can some what cover this scenario - thats the only provider I found.
stripe.com/en-mx/resources/moâŠ
If anyone looking for a startup idea this is it because I literally couldnt find another provider
I have no idea what you're talking about anymore. Your original post mentions splitting revenue that will be generated. The entire point of business is to generate revenue. This is pretty clearly a business.
But despite all of that, you now seem to be convinced you're not going to be operating a business with this person involved despite the fact that they're doing what seems to be 100% of the work to get the business off the ground to include paying for tools that will be used by the business, so I don't know what to tell you.
Anyway, paying some % of revenue to 1 person (do you really need more than 1 person to build a MVP?) does not require Stripe Connect. Connect is for marketplaces where you have a million different parties involved. All you need to do is send this one person a bank transfer with PayPal or directly via ACH. Use Wise if international.
Dude please chill. What I meant by running a business was all the nuance involve in actually operating an established legal entity like an LLC not the day-to-day work itself.
All I was asking was if someone knew some automated tool to split revenue.
Iâm calm, Iâm telling you that your approach isnât making sense to me and that youâre asking the wrong questions.
I donât get the aversion to forming a business. Itâs designed for this kind of scenario.
In any case, you shouldnât need more than 1 partner for this kind of thing, so paying them out doesnât require any fancy automation. Use Wise and set up a recurring, scheduled transfer for the amount theyâre owned. This should be backed by an invoice.
If that amount changes every month, you should ask them for a custom invoice of that monthâs work.
Custom amount or not, paying 1 person out is about 5 seconds of work per month, so itâs not something I would optimize or waste time automating upfront.
Business entities are kinda designed to solve this problem.
If you donât want to go that route yet, I would just draft up a simple agreement that lays out what you want. You operate the business under your name, and your partner sends a monthly invoice for their share of the profit. Their invoice will be an expense for you offsetting your taxes so it all works out evenly in the end. After filing your tax returns you will get the 100% accurate number which you can use for any adjustments that need to be made.
It does require a high level of trust, but I think thatâs the cost of saving money on not setting up a proper structure.
Once the business gets going and the model is proven, you can set up a proper entity.
If you donât have the trust to take this informal approach, then I would reconsider becoming business partners. If you still do, then you definitely want a proper company structure with all the protections it provides you.