New to doing business. How should we cut the percentages?

Bloodfart

So we run a small kindergarten/English training thing in China someplace. We have lots of experience with the kindergarten school systems, our own business model which is running fairly smoothly by this point, and enough years of teaching experience ourselves to understand quality.

Now some people that have a bottom floor of a primary school (likely big because its in a big city) want us to come have a see and possibly work with them because the people themselves have no idea how to run a kindy.

Originally they offered for us to rent it from them but the rental costs are far out of our current finances and too high to risk starting up a new school and losing our life-savings.

We think they may now be interested in splitting profits. Making them a major investor and nothing more by letting us run a kindy in their building.

What we have no clue about is how to reasonably cut a deal on profit percentage.

Whats the going rate for doing all the work and the other party just owning property?

RadicalTurnip

No idea about that exactly, but on farms it's usually 50/50 (if one person owns the property and the other person does all the work tilling/planting/harvesting/selling). My dad owns some land, and a guy stops by once a year to give him a check for the "profit" he's made (after expenses).

I know it doesn't relate exactly, but owning the property, at least in this case, accounts for a lot of money.

Deebaser

Bloodfart wrote: »

What we have no clue about is how to reasonably cut a deal on profit percentage.

Whats the going rate for doing all the work and the other party just owning property?

A relationship like this is very situational.

What % of your anticipated monthly revenue is the rent that they quoted? They are probably looking for a number close to this.