Pay Attention to This Before Starting a Culinary Business Partnership

Running a business, especially a culinary one, certainly requires capital or funds to start. However, sometimes capital becomes a hurdle for those wanting to start a business.

Besides obtaining capital by applying for loans from lenders or using savings, you can also utilize a profit-sharing system to build or develop the business you will manage.

For example, you want to start a culinary business but are hindered by lack of capital, which can become an obstacle. Your savings are insufficient, and you don't want to get into debt by taking out a loan.

So, what is the solution? The first thing to do is find a business partner to collaborate with in the culinary business. This way, you can discuss funding and profit-sharing systems with the partner.

Then, create a formal agreement to outline every term and condition for the investor and the agreed profit-sharing terms. This aims to prevent future issues.

This ensures that neither party feels disadvantaged. This also legally reinforces that the culinary business partnership is protected by law. For more details, let's look at the following discussion.

Find a Culinary Business Partner

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If you lack capital and don't want to get into debt with leasing companies or lenders (such as banks and others), it is better to look for a business partner.

Ensure that the partner is willing to become an investor in the business. This way, you will get help with the business capital.

Before seeking an investor, prepare a presentation and a proposal explaining the type of business you plan to build. Make it as attractive as possible with reasonable calculations.

Once the investor agrees to be your partner, don't forget to prepare supporting documents containing the agreed terms and conditions, complete with a stamp. This document is used to prevent future issues.

Culinary Business Profit-Sharing System

After establishing a culinary business partnership with an investor, the agreement document will outline the profit-sharing system that both parties will receive.

In a business partnership applying profit-sharing, there are three business partners involved, each receiving different portions of the profits.

Capital Provider (Investor) and Working Partner

In small business profit-sharing systems, you often find someone who doubles as a capital provider and a working partner. If there is such a person, they will receive two incomes.

The first income is a monthly salary as an active working partner, and the second is dividends as an investor or capital provider.

Dividends are net profits after deducting various costs, such as operational and investment costs for the next year. Unlike salaries, dividends are usually calculated annually.

Dividend distribution is adjusted to the percentage of capital each investor initially invested in the business.

Capital Provider (Investor) in the Form of Shares

This type of investor usually does not participate in the business management. The profit-sharing for these investors is only in the form of dividends and not based on capital ownership.

In this case, both parties agree on the terms and conditions, including the profit-sharing percentage based on mutual agreement, whether using a 50:50 or 40:60 percentage for the investor (capital provider).

Capital Provider (Investor) in the Form of Loans

This system is similar to the first type of investor. The difference is that the investor provides capital in the form of a loan.

Because it is a loan, the calculation includes the principal loan, interest, and repayment term. These investors are called creditors. Unlike other investors, if the business fails, the creditor does not share the risk.

Profit-sharing involves repaying the principal loan and interest within a previously agreed time. If the payment exceeds the deadline, the loan interest will increase.

Before deciding to use such a system, carefully consider it as each decision will affect the business.

Pillars of Business Agreements for Profit-Sharing Systems

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Before starting a business, you and your partner should understand the pillars of business agreements for profit-sharing systems. There are four main pillars you and your partner should know:

1. Capital Cooperation: There is Mudharabah (the investor provides all the capital) and Musyarakah (both parties provide capital).
2. Business Activities: Both parties ensure that the profit-sharing system is truly used for the agreed-upon business.
3. Profit Distribution Timeline: There is a timeframe for distributing profits to the related parties.
4. Profit-Sharing Agreement: There is an agreement on profit-sharing, applying one of the two principles: profit sharing and revenue sharing.

These are some important things to know and prepare before starting a culinary business partnership using a profit-sharing system.

This system will help you start a business, especially a culinary one, if you are limited by funds. By collaborating with a business partner, both parties benefit. The capital provider benefits from profit-sharing, and the business owner gets help with the business capital.