Is Bringing In Revenue Equal To Doing Task Work?
Business

Is Bringing In Revenue Equal To Doing Task Work?

financial literacy

Interesting topic I thought this was. Two people I saw were having a debate in terms of starting up a business that specializes in printing such as business cards. Now both of them want to get into the same industry, but interestingly enough both of them lack the skill that the other has to start one. Essentially, one person has the necessary technical skills to handle the actual backend work but lacks any real funding or sales skills. The other person has a good amount to invest and is good at getting customers. The technical person brought up how that is like a perfect partnership and that they should start a business together where he would handle all of the physical and technical work while the other person would handle the finance on top of bringing in customers. Basically, it would be a 50/50 partnership.

To me personally, that is completely unbalance in this type of a situation as I would have to say the ownership would have to be something like 90/10 in favor of the person with the actual funds. I’m almost inclined to say it should simply be the guy with the funds should open it himself and just hire the other person as an employee. The thing is too, I have had these types of discussions before with people who are more used to being in a traditional employee working environment and I always find it kind of surprising how many feel like in the above example that it is definitely an equal effort from both parties and so a 50/50 seems fair.

The way I see it, if you are talking about something in terms of say a team objective environment where everyone has a task, then in most cases I would agree that a person that say brings in the customers is simply doing his part as without the other person making sure the product is good there will be no business. But when it comes to actually starting and owning a business, I would have to say that the person who actually funds it or is the one who is solely responsible in bringing in revenue outweighs a person who would be mainly doing the physical or creative work only. I guess in my view, if the person doesn’t want to be responsible in anyway in bringing in revenue or is not willing to invest his/her own money in the beginning that he/she is mainly like an employee with little risk compared to the other person. Unless the person had like a skill that no on else in the world could do or was extremely rare, then that would be different.

2 Comments

  • joewatch 8/17/2007

    I don’t think there is a right answer to this question as putting a value on a skill is not easy.

    You mentioned that the business person should own the company and basically hire the technical person as an employee. Obviously, if the technical person doesn’t want to be an employee, he could hire the business person as an employee and sell percentages of the businesses to private investors, or take a small business loan from the bank.

  • Alan Yu 8/17/2007

    If the technical person actually did want to invest some of his own money or raise capital in some way as you mentioned then I would be inclined to say it would be more even as basically with your example he does want to get involved with the finances in some way. The scenario though is that the person basically doesn’t want to do anything financial/revenue related nor does he want to invest any kind of money and just wants to do technical/creative tasks.

    I personally just can’t see how that can be an equal thing when it comes to starting a business unless as mentioned the person’s skill is that unique for some reason. It’s always interesting to see how people break down what type of contribution one should have to do to make something equal to others.

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