I'm getting involved with a small business in the food truck domain as an investor. I've agreed to purchase equipment ( fryers, tents, grills etc... ) as well as fund event fees, rental equipment. The actual truck may come later in the form of a monthly or weekly rental but for now its just spots at events like fairs, foodie events and large parties ( Canada Day etc... ). I give them advice on what type of events to attend, where to buy supplies and equipment etc... How should I structure the money I put into this business and how should I take out my portion of the profits after each event? Any advice would be appreciated.
Hi,
The problem with small businesses is that profit is totally under the control of the operator. Lots of personal expenses can get buried in the company to lower taxes.
This is why you don't want to be a minority shareholder.
This deal should be structured as debt.
I do these deals often and wrote a book about it in 2014 called Invest Local. You can get it from Amazon and it's on Kindle and audio formats.
Hope this helps.
If you'd like to discuss the specifics of your case, just arrange a call.
thanks
Answered 6 years ago
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