There's a lot of confused-sounding statements in all of that, Cyrus. Backing-up, there may be a definition problem here, but I'm not so sure - it looks more like you understand the words but think you are entitled to something you are not. Earlier you said this:
Cyrus said:
% of all revenue generated from patent ideas I come up with, which I think is a very good alternative.
Which implies to me that you
do know the difference between revenue and profit. But just to make sure:
Revenue is the money receieved from the sale of goods and services.
Profit is revenue minus expenses.
Googling, it looks like the terms are sometimes used interchangeably, but if you look up the definitions in the dictionary, those are them and if you google "revenue sharing", you get "profit sharing".
The quote from you above implies you want
revenue sharing. As Vanadium and I said, true "revenue sharing" does not exist, as it would put companies in a position where they could be giving their employees bonuses while going out of business because they are losing money. The company's interests always come first - and rightfully so.
Profit sharing is what you'd really want to ask for.
Figuring on Vanadium's exmple: if your company grosses a million dollars in sales next year at a 10% profit margin, that means it has $900,000 in expenses and leaves $100,000 at the end of the year in profit. Typically a partnership would have the partners getting together at the end of the year to decide what to do with that money. Ie, you might keep it in the bank to save for a rainy day, use it to buy new equipment or as a way to hire another person and expand...or you might split it among the owners/partners as a fraction of their equity stake in the company. Ie, a 20% equity stake would get you a $20,000 bonus. Or another non-equity based profit sharing agreement might exist or the owners could simply decide to allocate a fraction of it for bonuses out of the goodness of their hearts.
The chart on this link (http://legal.uncc.edu/policies/ps-7.html ), that is under the section: "E. Revenue Sharing"
I'll have to come back to this - I'm having an internet problem that is preventing me from accessing a bunch of websites right now.
There is a huge difference between an 80 man, and 3 man company. In an 80 man company, I don't disagree with what you're saying. An 80 man company is worth several million dollars, and 1-2% of that is a fair amount of money (Assume each person makes 65k at that 80 man company. The net worth is at least 5.2 million. That means 1-2% is roughly their salary/company net worth - exactly what I said at the beginning).
No. By that math, you're talking about
revenue, not
profit. Year-end bonuses are calulated on the
profit in any sized company. Here's how the analysis really looks (and this is somewhat speculative, but based on what I know about my current firm):
-An 80 man engineering company with 60 production workers and 20 administrative staff operating at an average billing rate of $100 an hour and 80% billable takes-in just under $10 million a year.
-The average administrative worker makes about $40k and the average production worker makes about $80k. Company expenses directly tied to the workers may be another 30%. That's $7.3 million in salaries.
-Other overhead in the rent, utilities and insurance might be another $1.7 million (trying to keep the calculations round).
-That leaves, at the end of the year, $1 million in profit, or a 10% profit margin.
So at the end of the year, the 45-year-old junior partner or "shareholder" with a 2% equity stake and profit sharing gets a bonus of $20,000, assuming none of the profit is reinvested in the company.
3% of a 3 man company that has low net worth, is not equivalent (assume for the sake of the argument this company is worth 3-500k. Then 3% share is 15k.
If a company has only 3 employees, obviously you wouldn't give out 3% shares. Perhaps a junior partnership would be 10% or 20%, but recognize what I said previously: most employees of most companies do not get equity shares and for a young employee to be given one would be highly unusual.
You're in your mid 20s, right? Again, I will freely acknowledge that I don't know what your company does or what you do, but what you describe is
*highly* unusual, both in your position in the company and what you are thinking about asking for. Perhaps you are a talent of extrordinary rarity, but I'm just playing the odds here in betting that you are not. More to the point, it is highly likely that you have a higher opinion of yourself than your bosses do of you. Again, I'm just playing the odds: that is nearly universal among young workers. The idea that an engineer in his mid-20s, with only ~5 years of experience could be so critical to an operation that he is irreplaceable and needs a high fraction of no-risk profit sharing to keep him, at a time when unemployment is 10% is, to put it midly, very difficult to accept.
