After years of ideas and ‘maybes’ I settled on one and it’s expanding quicker than expected. How do I manage the money?

I’m sure I’m not alone, but I’ve spent years thinking up ideas and side hustles to help boost income, keep me active, or help create life outside of my soul crushing job lol.

That being said, I finally stuck to one a couple months back, and even still didn’t think I’d jump. As I was building and thinking of jumping, I gathered some interest amongst my little tribe (super intimate friend group - we do everything together).

2 of them were so interested that they just wanted to help, and we went into it thinking it would be a slow long haul until we saw progress especially in the face of covid.

While initial investment was minimal, we’ve made it back in about a month - and now have about the same amount in pure profit.

Problem is I have NO IDEA what the best move is. I want to pay them for their work, and I want to take a portion to reinvest back into it.. as well as setting aside some for taxes and things.

I don’t mind not paying myself currently. How do I best divvy this up?

Thanks for your input!

Quote Mark

Best Answer

Talk to an accountant. Be careful transferring your money just like that, the cost could be high.

Plus business is first, if all of your are “investors” in some way or another everybody or no body gets payed. Grow company today, get money tomorrow.

Other points

A few thoughts, after reading the other replies, too... First off, educated Accountant here, not a CPA, but have an MBA and my resume ranges from Corporate Accounting, Treasury, and Sr Financial Analyst to Sr Finance Manager now...

First, Reddit overestimates the ability of most Accountants. If you’re talking about a small amount of business so far, around $50k/yr or less, I’d say at the very least you should have a personal CPA to help you manage the taxes. If you’re closer to $100k+ then you might want one who can support your books and taxes. In terms of managing your books, you can do it with software like Quickbooks for a while and give an accountant access. So books and taxes, that’s all the CPAs are for.

One big item is ownership. From the sounds of it, this is your business 100% and the third parties are involved but own nothing. If this is correct, then I would suggest setting up an entity with a lawyer and making contractual agreements with these parties for how they can track time and how much you will pay them for that time. Make sure there’s an approval process so you don’t get fleeced and lose a friend! If you give them part ownership, then I’d say any distributions of cash that you make are in line with ownership. You have to be careful not to dilute yourself - don’t contribute all of your cash while they give nothing. Because of that, I’d recommend the first approach of paying them an agreed hourly rate and you own 100%, if possible.

These aren’t sexy but they come with costs and are worth taking care of if this business is really going to work. Once those are done, you’ll have 4 objectives for your cash in this order: 1. Positive margin - hopefully this is done, selling for more than you pay, 2. Sell more - put your marketing skills to work and get more business for those margin gains, 3. Reduce costs - both variable costs you pay for each sale and fixed costs like bills, rent, whatever. You can’t get it to nothing, if course, but if you made some investment could you save? And remember - your time is money, saving time is a reduced cost! Lastly, my favorite, number 4 - get paid. What’s the point if not to make some cash, you don’t have to have the other things perfect to start paying yourself, but for as long as you’ve gone some wins within reach, I’d reinvest all you can afford into the top 3.

I hope this is helpful! I don’t know what you know and I appreciate when others are thorough with me, so this was my best effort. If you’d like, I’d be happy to help more, but have hit the limit of what I can offer based on what I know. Feel free to DM me, if you’d like, I’ve been spending this time trying to help small business however I can in the Finance department.

You need to firstly figure out what your tax burden is going to be. Missing on taxes is a painful process.

Are your employees working for free right now? What are your options for reinvestment? What rate of return can you generate? What is the next big expansion point of your business and how much cash will it take?

I’d recommend being cautious with unnecessary spending right now. Having cash on hand is always a benefit to any company regardless of the size. There will always be something to spend it on. Don’t have holes in your pockets. --- Yes. All of these are questions I have too. I’m looking into taxes, and anticipate putting 20%/month aside.. I figure that will be a bit more than needed but I have no idea how much we’ll see at the end of the year and just want to be covered.

‘Employees’ - partners I suppose... are working free currently but we’ve logged all hours spent working.

I have all receipts of every expense.

Reinvestment currently would just be supplies and tools to continue producing, packaging supplies, and maybe some ads - though currently I’ve only spent from my personal money for ads so I think I’d continue that (and I’ve spent just under $30 with a good turn around in my niche.. we’ve tripled sales week after week for three weeks now. I’m sure that’ll start to slow but it was a big boom we weren’t expecting.

Return rate... I really have no idea currently. It’s very new, but I hope to crunch numbers this week.

Next big expansion currently isn’t needed. We can continue to grow as is for some time now. The only thing I can think would be next would be to maybe hire another person down the road - and only low part time (2 days a week maybe).

It would be great to get a bigger space of course, but I have no plans to jump that far in yet.

Question asked by



May 7, 2020, 10:15:25 AM

Related Picture Note Cards

Product market and target customer

The process for a process to gain access to market


A product must gain access to a market and then bought by a customer who is comparison shopping in a safe place. The market validate the quality and safety of the product.

TeenSharks steps to startup

Three Steps to Startup


A startup involves a personal journal, and the first start, which typically ends in failure. But this is the real first time learning.

Steps from an idea to a merchandise

Steps to turn an idea into a product innovation

What are the steps to turn an idea into an innovation? there are at least the following steps. The idea must be turned into a product, and the product must enter the market. In the market, the target audience will examine the artifact - if they buy, then the product becomes a merchandise.

Why startups fails for the first time

Startup failures - why they fail?


A first time entrepreneur always under estimate the difficulties. Each voyage is a ship with 2000 holes - each hole is only visible when the boat is in water.

Jack the entrepreneur needing motivation

Jack the entrepreneur is a creation of TeenSharks Startup School


Why is motivation important for entrepreneurship? because it is very hard.

Jack the Entrepreneur: deciding how much to sell idea

Jack the Entrepreneur: trying to decide how much to sell his idea


Is an idea worth any money? Jack the Entrepreneur is trying to decide.

Jack the Entrepreneur trying to pick hat

Jack the Entrepreneur deciding which hat to wear - CTO or CEO


An entrepreneur is a Jack of all trades - he must be able to build, sell, and manage.

Jack the entrepreneur building prototype

Jack The Entrepreneur: Jack trying to make a hardware prototype


Jack the Entrepreneur is trying to build a prototype of a hardware product.

Related Quote Cards


July 17, 2020, 1:24:51 PM

Chang Liu

Veterans take risk, newbies take chances.


July 17, 2020, 1:24:37 PM

Chang Liu

Startup success is based on preparation, which is based on failure


July 17, 2020, 1:24:26 PM

Chang Liu

Recklessness is assuming you may win, leap of faith is assuming you may fail.


July 17, 2020, 1:24:11 PM

Chang Liu

Entrepreneurship is learning valuable knowledge that no one will teach

Startup Lingos To The Point


bold vs stupid

Bold is do the right thing that no one agrees and hard. Stupid is to do the wrong things that a few agrees and impossible.

business plan

business plan

A business plan has two parts, the aspiration and the traction. A business plan is about two parts: how the business runs, and how to start that business.

business plan

business plan and exit

The plan to reach the exit, including unknown uncertainties that will surely happen.

business model

business model

How to turn an interest into a money maker. How to attract people, how to stimulate people to pay, how to make profit, how to make relations, how to keep relations.

value proposition

value proposition

How much do I have to give my audience so they can pay me something in return? What do they value? what problem do they search for answers on your own? I want to solve that problem.



You may like your dream, but if you have to suffer tremendous set backs to realize your dream, would you give up?



You may like to startup, but you may not the business you startup


due diligence

VC or investor check. Include standard items 1. Did you quit your job; 2. Did your cofounder quit his job; 3. is your sales validated.



Protect and provide. And gets loved.



When you finally connect what you love to do to what a lot of people love to buy. When you can focus all you want and still have unlimited work and fun.


founder and CEO

A founder is not a CEO, until the company is making money and profit enough to stay alive on its own.



After you have a sale or a market hit, you ran into all kinds of accidental discoveries that you never knew exist.


Marketing vs. sales

Marketing makes the first sale happen. The sales department work on the rest.



A general or CEO or founder who is tolerant and generous. Someone who recognizes own mistakes. Someone with big heart for hiring people better than him.



Brand means name recognition. A lot of people knows what your company does and what you stand for. Brand is result of long campaign of consistent value provision and media cultivation. Brand helps a company reduce marketing cost.



Whether there are buyer willing to pay or not. For that to happen you must provide extreme value. The entire startup process would be based on guess before the validation. Validation happens in a market, not on the street.



Value is what you give customers beyond the price you charge. Value is effective solution to a problem. The price your customer pays reflects whether the problem is big for them and whether your solution is uniquely effective. Value stems from quality and detailed work.



Marketing means bring your product to the market and bring your message to your customer. Marketing is not salesmanship. Marketing is to penetrate the world of commerce through many barriers and existing networks.


Widgety MVP

A "MVP" wanna-be that is still at the widget stage. Lacking ability to demonstrate effects, only projected effects.



Minimally viable business, or MVC, minimally viable company. A company that scrapes by, full of guess and hope and no traction and sales. When you give your customers things for free they all take it. But they never pay and you can never rent a table at the market.



Minimal viable product. A full artifact of a real product. Something that works ALL THE TIME. You can demonstrate the real effect on real people - not to sell hope. The MVP may not have certain non-essential bells and whistles, but it needs to have appeal value.


Customer is king

A business lives at the mercy of its customers. You provide your customers 10 dollars worth of value and they pay you 1 dollar, not knowing that your company only costs 99 cents to provide the item. The value is not the item - the value is what is attached to the item.


Cash Flow Is King

A company needs to have daily activities to keep employees busy and engaged. Otherwise the good ones will leave.


Company culture

Company culture is based on a company making money. Once your workers are paid, they need to have a mission and aspiration so they are not bored everyday and make trouble in the work place.


Take a stand

Tell people what you stand for, clearly and loudly, and those who like you will come to your stand. Others will walk by and shake their heads.



Veterans do things their way, because they know all the naysayers are just beginners and by-standers.



When you find a full universe within a grain of sand, a life time of work to do by focusing on one thing. There is enough people behind you to support your living and cause.



People's reaction when they know you have done something they could never do And they know this is not accident because you have done it a number of times.


Company valuation

A company valuation is cash investment divided by the percentage. As long as your story is good, the valuation will keep coming, and the investors will keeping falling into the line.


Return on investment

Investors are either behind family fortune (never work with them) or for rich clients as investment vehicle. Both need returns 2-3 times better than stock market darlings.


Due diligence

A thorough validation of everything you said.



Someone wanting to build a lean startup by projecting, offering, and test.



Having found what people want, not just what people may need. Your offering and their acceptance is sure, no longer a guess. You can provide it for profit, and you can indeed making living on it. Traction is sometimes called validation. You are no longer a theater. You have touched nature, and found cash vein.



Natural love.



Things to make sure the founder will not fall into despair, boredom or get distracted during the long execution even in face of repeated setbacks.



Insanely high value/solution to price ratio



Ability to walk long distance in the dark.



A complete shift of the supply chain and value provision.


Game changer

A new value provision that causes supply chain to move and customers getting more value for the same price.



Mission is how to beat loneliness during startup, mission is why your employees get up in the morning.