Developer & Marketer Partnership Challenge!

[behrooz66]

Hey guys,
My best friend and I have registered a business which for me it will be a second job and for him, in fact a third one!
What we are going to do is providing IT consulting and solutions, including development of web apps, online reports, mobile apps, database, etc. for other businesses. As I am new comer to business (my friend is a more professional), I feel like I am in a disagreement with his view on how to share work & profit, and that is why I feel like I need some help.

He is a marketer, no IT knowledge, he is the one making connections and finding the projects. I am the one with all the development, coding, maintenance, technical support, server setup, etc. knowledge. So obviously given that each IT project can vary between 50 to 500 hours of work (A to Z) and needs ongoing technical support afterwards, the amount of work each of us will do is not even comparable. For example, so far he has had a few meetings trying to make connections, not exceeding 10 hours and I have already done around 200 hours of work setting up servers, developing a first small project, researching the best practices, etc.

Now his idea of sharing is out of a projects profit, each person takes "some" money based in the number of hours of his contribution, and then there will be "some" money left which goes to the business itself, on a 50-50 basis; which leads to question 1: Shouldn't the part that goes to the business be also shared on a contribution ratio basis, rather than 50-50?

Question 2, if I myself find a connection, get a project, and deliver it, am I entitled to the 100% of income of that project?? if not, why?

There is also some small ongoing income, which we will earn out of hosting some projects. As I am the only one providing the technical support and maintaining those servers and projects, I am entitled to that part of the profit?

My partner insists on a 50-50 partnership as he thinks that is the only way "it works". Is that a fair expectation given the situation?

[Harold Mansfield]

I agree with your partner. You both bring different skills to the company and without each neither can do it all. Also, you've gone into this thing together. both taking risks. If you don't trust him as a partner already, or trust that his contribution is worth just as much as yours then you shouldn't be going into business together.

The way a successful partnership works is that both people give it 100% and have each others back with the motivation of what's good for the company. All money brought in is company money. Not your money and his money.

If you nit pick which week you spent more hours than he did on a project and which week he spent more hours on one, you're partnership and your business will fail.

You need to stop thinking like an employee and start thinking like an owner. Owners don't nit pick hours and who brought in which account.

It doesn't sound like you guys have any of this on paper or else you wouldn't be asking these questions.
I highly recommend that you hash out the details or your partnership, the company, and the money and get a lawyer to make it official.

[Fulcrum]

Harold is right on with what he said and I'd like to add that it appears that your mixing up profits with wages.

If you both need to draw a wage than come up with an agreement before hand (hourly, set $ amount, commission) and write everything down. Even if you don't take money out as a wage it might not be a bad idea to track time/commission and pay that out once decent cash flow is established.