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How much should I pay an employee?

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ivan i

Retiring at 25
Read Millionaire Fastlane
Mar 4, 2018
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Canada
So I'm running a design business for over a year now, by myself. School has been getting so much in the way, that the other day I realized that I probably need to hire someone. But I've been having a dilemma, which is why I need your guys' help. I really don't want to hire someone who's cheap but does a piss poor job, and yet I don't want to give up a majority of my income. I came to another designer the other day saying I'll throw him consistent work for 25% of the cut of the job. It seems to me like he actually got offended by me saying that, which makes me think maybe I'm pricing things wrong.

If I charge $60 for a job for example, and my worker finishes it, should he receive the majority, the minority, or should we split the cut 50/50? How would I go about pricing this, and where would I even find someone who does a good job for this type of price? I need your expertise guys, thanks a million.
 

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Real Deal Denver

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Jan 13, 2018
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In my field, real estate, they start new agents at a 50/50 split. 80/20 is considered very good, with some very experienced agents getting 90% or 100% but they pay a monthly "desk fee" which is a portion of the overhead.

I think 75% is a good split - but not right away. There is going to be a training/ramping up period, so I'd start at 50% if it were me, and move up to 60% in 6 months - and 70% in a year.

If they want more, they can run the show, which, as you know is a lot more work than just designing.

I'd stop at 70% myself, and throw a perk of 5 or 10% for a particularly good job now and then as a bonus.

Be sure to get a noncompete clause for your customers they will be working with.

A good deal is a two-way street. Don't cut yourself short.
 
OP
OP
ivan i

ivan i

Retiring at 25
Read Millionaire Fastlane
Mar 4, 2018
36
140
124
Canada
In my field, real estate, they start new agents at a 50/50 split. 80/20 is considered very good, with some very experienced agents getting 90% or 100% but they pay a monthly "desk fee" which is a portion of the overhead.

I think 75% is a good split - but not right away. There is going to be a training/ramping up period, so I'd start at 50% if it were me, and move up to 60% in 6 months - and 70% in a year.

If they want more, they can run the show, which, as you know is a lot more work than just designing.

I'd stop at 70% myself, and throw a perk of 5 or 10% for a particularly good job now and then as a bonus.

Be sure to get a noncompete clause for your customers they will be working with.

A good deal is a two-way street. Don't cut yourself short.
Thank you, that answered my question. Super helpful!
 

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