Sole Proprietor to Partnership? Or sell shares? Form a corporation?

[hggirl]

I have owned and operated a small company for the past five years and invested around $45,000 into it. It has a strong profit margin but earns a modest annual gross income...around 40,000. To expand I have been approached by people who can program and could expand my website and monthly magazine. I am wondering how to move forward without going into debt for it. Profit sharing? Partnership? Shares?

[vangogh]

Do you think the people who approached you can help your business. Does your website need to be expanded and do you really need a monthly magazine? I get a little suspicious when someone approaches you to help you expand. I'm not saying those things can't help you. I don't know. Just making sure these are things you want and not things someone else said you should have.

Assuming you do, the next question is to ask yourself is what the expansion is worth to you. How much of your company are you willing to give away? It sounds like you aren't thinking about hiring these people to do the work. Is that an option? As for the three possibilities you mentioned, I would choose a partnership if you're planning on exchanging a large percentage of the company to bring these people on board. If you're thinking of this more as hiring these people to do a specific job, I still don't think I would go with profit sharing or shares. I'd probably offer then a percent of future profit until some threshold was reached. The threshold should be more than what you'd normally pay right away, but it shouldn't be so much that years from now you're still paying for the work.

I'm not sure I'm being all that helpful. Do you mind providing more details about the business and what these people will be doing? How exactly will they expand the site. Feel free to share a link to your site. If you do, your post will probably be sent to moderation because of the link, but I'll approve it as soon as I see it.