salary question?

if you were 10% owner of a pizza/bar and you were to recieve a salary and bonus what would be fair as far as bonuses? i will get $800 week salary and will be in charge of entire store 3K sq.ft. other owner silent and owns building.he wants to pay a bonus since i will be there 90 hours a week which only comes out to $8.88 accountant suggest % of gross sales due to the low hourly wage. what would you guys suggest ,gross ,net, what % bonus? the thought was 5 % of gross sales .i also dont want to run the business in the ground if the bonuses are to high and there is no money left.20K a month bonus is 1K. is this impossible to take that much. any help would be great thanks.

Take it off the profit not the gross. You can run great sales all day long but if your costs are out of line…ummm…well there won’t be any money for a bonus. There is no reason to keep things in line as long as sales are good…doesn’t make much sense to me.

I would do 10% salary increase (permanent) when sales are up 10% and all the costs are in line for a consecutive 6 week period.

Definitely off of profit.

But from your post, it looks like the place is doing 20k per month? And you’re getting an $800/wk salary?

That’s over 17% right there without any additional labor.

Edited to add: 10% owner or not, you’re not making nearly enough to justify 90 hours per week. The only way I’d do that for that amount of pay would be if I owned the entire place. Ask yourself how long you can do 90 hour weeks. It sounds like no problem to start; by week 3 you’ll be miserable. I personally think your 90% owner is asking for way too much.

I suggest that you insist that you go off salary and switch to hourly. If you are really a full charge manager, (hiring, buying, scheduling, pay bills, payroll, marketing) you should get a wage with overtime for hours over 40 and a profit based bonus. Not knowing where you are located, the wage is hard for me to say, but if you were doing that for me you would earn $15 per hour plus 10% of profit for the manager role. If you also owned 10% of the business, you would get a dividend of 10% of profit after all wages (inlcuding yours) and expenses.

Looks to me like the 10% ownership is just work comp avoidance though. If you do not have good health insurance, I would insist on being included in the work comp policy despite your ownership stake.

the 10% is what im able to put toward friends owns building and is spending 200K on constr. and equip everything i put in 20K low we make money he gets back his 200K the larger my ownership.when he gets back 180K i become 50% owner with the option to buy business and liquor license.that why i offered to take 800 week plus bonus. i figure if i had my own place i have to put out all the money and may never see a paycheck for i dont pay rent it will look like rent as hes paid make it easier to understand we will have 2 business in one building i have the pizza he has the bar.his wife is running the bar ill oversee the entire store.if it goes bad i take what i bought for the 20K and can go sure ill lose something like signs,advertise ect that i paid for the rest will be items.we even have it set up if bar doesnt work i still can run pizza place. i have excellent health ins and retirement .seperate from business.if this changes your answer for who responded i would like advise thank you.

i would like to add my two cents to this equation of part madness. i am not a pizza biz surgeon but one thing i have learned, while you and your partner/friend are still FRIENDS, please pay an attorney whatever it costs to spell everything out on paper- PLEASE! Do it for all of us! :smiley:

Consider that majority owner is getting his investment paid back (while probably getting lion’s share of profit), and you are still working huge hours for below-average pay. I am not saying it is a ripoff deal, just that there is a real consideration to be values in the labor/sweat-equity the working partner will bring to the table.

The dual business with other partner having a bar is a whole added dimension. While it may add some good business to the pizza place, it will very likely add sales to the bar in kind. The value of your labor to the business is possibly more than $800 a week plus a 10% bonus. (I’d cheer for $800 without bonuses to be honest) Heck, your ownership share would suggest 10% of profits. So, all that said, I still agree with Bodeghawy that bonus be based on net profits . . . and 10% dividend for ownership after all that is figured.

I’d be inclined to complain about the arrangement, but I also know that having to have a financial investor is a reality where you give up profits and autonomy to make a reality come to pass. When you get to the 50% partner stage, it should be a much smoother ride. ATTORNEY was a great suggestion by Y-yo. What happens in the case of accidental death of one or the other? Bankruptcy filing by one partner? cash windfall and one partner wants to buy out the other? Don’t let state laws make those decisions for you.

As others have said, get an attorney to write up this agreement, don’t use the napkin at the table.
It’s really your decision, but the bonus should be off the profit each month. Hopefully you have a bookkeeper that will do this for you ?? Also - if you can swing it - put your bonus into your buy-in amount, that way you are getting paid as manager and your bonus goes in as a down payment. (have your attorney work with you on this) If your partner asks why you need an attorney - then rethink this relationship - they should have no problems with this.


thanks guys very helpful . i dont do any business today without my attorney or friend also insist on attorneys and contracts . i didnt say anything i guess i figures it was automatic to have an attorney.i have been in the contracting business for 21 yrs had a partnership first 7yrs with a hand shake (imagine that today) and were still best friends got lucky.

also everyone is saying $800 isnt much for my labor but did you guys get 800 a week when you started your own place and how much debt did you guys have the day you started probably more then 20K.i know when i started my business i had 60K in debt and didnt get a paycheck on a steady basis.sometimes not at all.also i didnt state the pizza and bar revenue is paying back the 200K not just me and pizza .the main thing in this whole deal my friend is offering me an opportunity to do what my passion is and its to feed people i just love it.but i still do need to be careful.thanks again everyone sorry to keep going over this but you guys are a great the hours shouldnt be to bad i work 14 hrs a day/night now 6hrs day ,8 hrs night until place opens.been doing it for 2yrs.

Big Joe still around? How is it working out for you?

I am in a somewhat similar situation. Owner is opening a second shop that I will fully manage about 80 hours a week. 10:30am -10:00pm every day. I will not be sharing any ownership though. Currently I work on average between 35-42 hours a week making $14 an hour with usually two hours of OT a week. Generally take home 900 every two weeks. Made $28,000 gross last year. We have yet to work out a confirmed deal on pay. I am thinking maybe just keeping my wage at $14 an hour with no OT would be fair? That would put me at roughly $56,000 gross. Basically, double my hours and double my pay.

IMO which is a general opinion, I don’t see how no OT is exactly fair :? :smiley: Why not just be salary then… and for the working of 11 to 12 hours a day every day, get 4 weeks of paid vacation, health, sick days etc etc etc

I was in a lopsided partnership a few years back…3 partners with equal shares but I was the one that was putting in all the hours…I was not on the payroll, however, all my time was recorded and I was paid for that time before any profits were shared…It was an arrangement that worked out well for all parties…

wow, 200k invested and your only thinking your gonna do 20k a month, thats 5 k a week… there wont be any profit… I would think that you would have done some sort of study and have a idea of what your number will be in the area your in… However if I was your friend and Im not trying to be a a$$hoe but I would hire a few people, because what happens after a few weeks, A. you get worn out. B. You Press him for more money because you know he needs you… C. Something happens to you.

Would love 4 weeks paid vacation, but who runs the shop when I am gone? You are right though, doesn’t seem fair to not have any OT at all and just keep the hourly wage the same while doubling the hours.