View Full Version : Budget for several people
03-02-2003, 02:40 PM
I run a small software company that has recently become Limited.
The four people involved (including me) are used to working individually and therefore budgeting the expenses for the overall company, and how to split the hourly rate we charge into actual wages and future investments I feel I'm guessing at based on 'what sounds ok' which I know is a bad precedent.
Could anyone point me in the direction of a useful source of information concerning this - it would be most helpful.
04-02-2003, 10:03 AM
This is a very sensitive area that if done correctly can work very well for the life of the company or if done at haste can cause major personal problems for each individual or the company at later stages.
As you have just become a limited company, can you advise me on how the shares have been distributed amongst the four people? This will help me to guide you further.
The reasons behind becoming a Limited Company are also important as this really should form part of the overall strategy for the business within your business plan. The basis of this information, should help you to decide the right direction forward for you all.
You can choose to go in several directions but I certainly agree that 'what sounds ok' is a bad precedent to set now. The best thing to do is to look at your overall aims, your business plan, what each person wants from the collaboration, the strengths and skills of each individual etc. The outcomes of these discussions should form the basis of an agreement on whether to pay equal wages, define job roles, confirm level of investments and therefore benefits per person etc. Once this is all done, I suggest you formalise it in a shareholders agreement which can be done reasonably cheaply through a good solicitors. This will remove any cause for doubt in the future.
I would be happy to help you further as this is a subject that I have personal experience in and is a vital area that will either make you enjoy running your own business or hate it.
I look forward to hearing from you
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