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Good day,

My wife and I are starting a restaurant and bar seach website for our city. Developing the web site would cost about 8-10k.

We got a partnership offer from a computer company. They would pay and take care of all the technology aspects. We worked about 100 hours on gathering the information and we will meet clients so that they become members on the site and get priority placement on the searches. We should make about 4-8k 1st year then 15-20k a year going forward.

I was wondering what percentage of the profits should the computer company get.

Thanks

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It really depends on the deal. If they own equity in your venture, then they get whatever percentage of profits, based on their equity stake. If you work a partnership deal, then they can get a royalty from sales or you can pay them a lump sum or whatever you want.

It looks like they are willing to do $8-10k in work up front. So, think of that money as an investment. If you put in 100 hours, at say $100 per hour, then you put in $10k. If they put in $10k and you put in $10k, then you both put in 50% of the equity. Now, that's a little simplistic since you had the idea but it's a starting point.

Moving forward, you need to figure out how much work this partner is really doing. If all they do is maintain the site and do some updates, that's not a lot of work. So, you should figure out how much that maintenance would cost as well and that might be a good starting point for profit sharing.

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