Today, I was going over the idea of the shared income business structure. My concern was to handle:
- Dividing up the income
- Figuring how to handle salaries when not enough has been received to pay all of them
- Employees who no longer work for the company but still earn a share of residuals
- Applying a factor based on the length of time a person was worked for the company, there should be some benefit time invested
I think I have resolved those issues, but it will require more thought at a later time. Here is what I have so far:
The business profits will be divided up as:
10% - Charitable
10% - Rainy Day Fund
20% - Marketing
20% - Residual Fund
40% - Salaries - (Includes all expenses related to salaries)
While the plan does not allocate a large amount for marketing, some usage of the Rainy Day fund could be used when needed.
The 40% is divided up with a cap of $126,000. If there is a surplus, it should move into the Residual Fund. If there is not enough to meet payroll, the balance will be taken from the Residual fund (or Rainy Day fund if available). If there still is not enough, the salaries will be less and the balance paid back from the Residual fund when available.
Every month a person works, they will accrue 100 Time Investment points (TIPs). If there is not enough funds for a full salary, the TIPs will be factored in to ensure those with more TIPs receive more towards their full salary.
The primary purpose of the Residual Fund is to share the profits with those that no longer work at the company. They still earn residual income up to 25% of the current Salary rate factored by the TIPs and the age of the company. For example, if a worker is with the company for 10 years and the company is 10 years old, they would earn a share of the Residual Fund Income for that month (not off the balance of the fund) up to 25% of the current salary. If they only worked five years, then they would receive 50% less as their TIPs are equal to 50% of the company's age. They will not earn anything if there is a negative balance in the Residual Fund.
The focus is making sure everyone receives equal pay while employed and the possibliy for residual income for the rest of their life for their time invested.
Another aspect of this model, it allows people to be hired when there is not enough to pay the full salaries and pay them over the future from the Residual fund as long as the company stays a alive. It would have to be clearly noted that the debt would be canceled if the business folds. Additionally, if a person leaves with a balance owing on their salary, they would still receive payment for that balance from the Residual fund until paid in full (which would mean the Residual fund would carry a negative balance until they former employee(s) was paid in full.