Business Advice Please!?
Posted by Thomas | Posted in questions | Posted on 26-09-2009
Tags: Advice, Business, Please
1
OK So a startup company which I have been doing some freelance work for (I’m a designer) have offered me a 2% share in their company in exchange for occasional work. This startup company is basically a website which sells computer peripherals, much like Misco and Dabs etc. This 2% (non liable) will pay a yearly dividend at the end of every tax year.
In exchange I think they are looking for me to create the occasional banner advertisement and generate a weekly HTML email (Not much work once you have the basic template designed) and to consult them about improvements to the site including rankings, search engines , anything for promotion etc…
I’m wondering what business heads advice to me would be, I’m thinking it’s a good idea although I could end up losing out on time if it doesn’t take off. Looking at the profits of Misco and Dabs etc though there is a big market for what they are doing!
They’re coming back to me with a full proposal about the work they want me to do this week, and I said I’d get some advice first, so if anyone’s got any pearls of wisdom, do tell! 
Cheers
There’s simply too many unknowns in your question to give a specific answer. A few questions you need to answer yourself:
How much is 2% of the company worth?
2% of Microsoft would make you mega-rich
2% of Joe’s Widget Sales might get you nothing at all
So, the question to ask them is: what is their annual sales volume, profit margin and expected dividend payout? Only then can you know (or estimate) how much money you’ll get per year.
How much is “occasional work”?
A few hours a week/month is likely doable in your spare time.
In the many freelance projects I’ve done though, “a few hours” very easily turns into much more. Projects that look like they’ll take a weekend end up taking a month (not kidding here). So, how much effort are you personally willing to put in to get that 2%?
Once you have a (good) estimate of how much you’ll make and how many hours you’ll put in you can then decide if the project is “worth it”.