On Mon, 2009-02-09 at 21:57 +1300, Craig Cochrane wrote: > As a business owner I am shocked that someone would offer a % on turn > over. Turn over does not mean profit. You can turn over 20k per month and > only make 2k profit or no profit! Then to give away a % of turn over is > very generous indeed.
Paying a % of turnover can work if you have a very clear idea of what your expenses and you know that those expenses aren't going to change by much. Business owners usually would much rather pay a % of profit. However, a % of profit can be risky to an employee because they have no control over the expenses. I've worked with companies where the directors would waste thousands of dollars on overseas travel, expensive "business" meals, buying unneeded items all claimed as business expenses etc. Even though turnover was high, profit was very low. Before accepting a % of profit offer I would want an agreed list of expenses with some clauses about unexpected large expenses being independently reviewed etc. One advantage of % of turnover is that it's extremely easy to calculate on a monthly basis. % of profit often has to wait until the end of the financial year. I've been on both sides (employer / employee) of this situation and it can work very well but make sure you have a very clear contract. --~--~---------~--~----~------------~-------~--~----~ NZ PHP Users Group: http://groups.google.com/group/nzphpug To post, send email to [email protected] To unsubscribe, send email to [email protected] -~----------~----~----~----~------~----~------~--~---
