Best way to devide percentages/ profits

[SamC.]

My father owend a medical transportation business that he is now selling. I worked for my father for years and learned much until i left due to tension. After leaving i went into the hospital industry , and connected with tons of good connections to the medical transportation field. I decided to open up my own medical transport company a year ago and now that my father is selling his company i would most deffenitly hire my brother and giving him an oppertunity to work for our selves instead of working for some one else. I am looking for the best way to compinsate him. The best way i think is to give him a salary and a percentage of the company , but i do not want to give it away for free. The company is already established , i have set up the company legals, i am investing all the finances , and taking care of buying vans/insurance/ gas ...etc. The company is all set up and all i need my brother to do is start on september 1st when this new hospital contract that i have set up begins. My brother will be responsible for managing the day to day operations and working picking up patients as well. I will be responsible for thre financing , bringing new contracts in , and managing the business as a whole. My brother does not have the money to invest in the company but he can work well and i can trust him.

What us the appropriate amount he should recieve for bieng apart of the business ?

If he does get a percentage , should i also pay him a salary ?

I want to be fair but dont want to give anything away for free, because i did not get anything for free , please help any comment will do .

[Freelancier]

Pay him a salary. Pay him a portion of profits if he hits certain targets for sales/income growth. Over time you might grant him shares or give him options to purchase shares based on performance targets. I'm never a fan of giving away a piece of the business without getting either a cash/asset infusion or a large client infusion.

Your brother sounds like a great worker, but if he can't invest money or provide something unique to the business that will ensure its growth, he's not a great candidate for being given ownership. Earning ownership stakes, yes. But not being given it.

[vangogh]

I agree with Freelancier, however I'd add one thing. I get the impression you'd be doing this more to help your brother than because you need him in the business. It sounds like your brother will work hard and help the business, but I'm guessing if you didn't know him you wouldn't have to ask the question about how much to give him.

I have a brother. He doesn't need my help in business, but assuming he did, I would gladly give him more than he necessarily deserved to be a part of my business. I would keep control so at a later date I could change my mind, but I'd happily give him more than he might deserve, because he's my brother and helping him would be more important to me than the money. I'd keep controlling interest and make clear to him he'd have to work. I wouldn't mind the business supporting him, but I would mind him taking down the business.

The reason I say that is because I think your decision is less about what's fair to pay someone you're hiring and more about your brother.


Over time you might

You don't have to give him everything right away. You can pay him a better salary than he might merit. You can give him some of the profits. You can give him a small percentage of the business if you want. You don't have to start by giving him everything right away though.