Competition Money

BrewerDJ

BrewerDJ

Knows what a fatty is.
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We are starting this year into the competitions. I was wondering what you guys do with the prize money. I'm not really expecting to get any calls this year (I certainly hope:becky:) but in the case we do I should be ready and at least have a plan.

Does it get split up with the whole team? Do you just buy the team dinner & drinks? I mean since I'm the one who owns the equipment & lays out most if not all the cash for supplies, meat, gas & fees.

Just curious...for now.
 
you aren't going to get one answer it is going to vary greatly from team to team. I do think that most however deduct any contest expenses before any distributions are made.
 
We deduct all costs first (entry fee, meat, rub, etc - we keep a chart of cost for each contest) and then if there is anything left (which has never happened! :grin:) the agreement is that we divide it evenly among the whole team. If you are funding the whole thing and doing most of the work I don't think it's out of line to say you keep the money. For us 2 of 3 fund the team, but we all work evenly at the contest.
 
We set up the team as an LLC, and all the prize money goes into a team account. It is used to defray current and future team costs. Its important to keep track of everything because one needs to file taxes for the LLC.

Prior to forming the LLC, all team winnings were split among the team members, and reported on individual tax forms as hobby income.
 
Scottie said:
Whatever you do. Have it figure out before your first contest.
Click to expand...

Exactly... and all involved know what the deal is ahead of time. You don't want to be standing there with a check (or hopefully checks) and have people start asking about when they are going to get their cut...

And if you plan on keeping that money for yourself, make sure any team members who may have laid $$$ out get reimbursed first.
 
I would be more concerned with how you are going to split expenses. Even winning $500-$600/contest is going to leave a couple hundred dollar hole for every contest. And unless you are getting the last couple of calls in a category it is tough to put together $500 in checks on a consistent basis. At a lot of contests 4 top 10 calls might not even put $500 in your pocket if you take 4 calls from 6-10. Even if a contest has $10k in prize money.
 
I usually take 3-4 friends with me. We divide all the expenses up front. We've only done 2 contests, and still have a lot of equipment we would like to buy and haven't won anything yet. Our agreement right now is that if we win anything, we will divide the money equally and those that want to do it more often have the option of putting it into a group account instead of keeping it to help cut down on future up front expenses.
 
Last year, we started to used the winnings to evenly offset our expenses for that comp. As the winnings overcame the per-comp expenses, we paid off the expenses and then split the money evenly.

This year we setup a no-fee checking account from which all consumable purchases and fees get paid. We each deposit equal amounts of money on a schedule or to cover things. Any winnings will go back into that account to fund future competitions. Whenever we decide to part ways, we will liquidate the account and divide it evenly.

I naturally like to account for things and ensure that they are equal, so it's easy for me. Others might find it overkill. It'll also come in handy come tax season next year. It does require some trust since we all have withdrawal access to the account, but that account ledger provides legal evidence should some one forget morals....not that I ever plan on that happening with my team.

dmp
 
Our team is just my father and I. He is the money man and I do a bit of the cooking. Last year was our 1st year and when we walked, he kept the money to help with costs. He offered me cash but I didn't want to take it unless a profit was made. I was able to get cash a couple times when we made money....but I am doing cause I love it, not to make a quick buck.
 
The money stays with the team.
At least cover the entry fee of that contest first before you put it on other items such as meat and supplies. I think you'll find you might not have much left over. Hopefully you do but average you're just looking to cover that contest.
 
You could use the "crab fishing model". All expenses come out of the team account and all winnings and sponsorship monies go back in. At the end of the season if there is anything left, a certain amount will be held for the next year and the rest will be disbursed based on the number of "shares" each team mate has.
 
Everything we win goes into the team account and then is used on the next contest or saved up to pay entry fees.
 
Good topic and a tough one.

I had a partner but not a full partner, I paid for all the equipment, and the variable cost, the fuel and the spices for the rubs. I did all the practice and there was a lot of cost thrown down the drain to get the recipes and techniques to where we could start winning. In one season the funds started exceeded the individual cost of the event, we allowed for some travel expenses but not everything. The funds went for fuel costs for the cookers as well as some other costs that need to be addressed.

This causes some friction but when I laid out the total teams cost the issues was quashed. However now our winnings and sponsorships are starting to reduce our equipment cost which I retain and that is creating another issue of who owns the equipment.

We are now considering a LLC were investment in gets investment out with the team owning the equipment. (now we have to address personal use of the team equipment) we will work it all out somehow, however as mentioned above the smart thing to do is to have your agreements upfront so nobody misunderstands.

Sometimes it like playing in the park and the one kid takes his ball home, which I really don't care cause it's my ball.

Now address who gets the trophy, that’s even tougher
 
I own all the equipment so that's not an issue. All comp fees and expendables are split evenly between the two of us and all winnings are split evenly between the two of us. This keeps it simple. I own the LLC and all the gear so the trophies stay with the LLC. Teammates have to be willing to shoulder some of the financial risk if they want a share of the rewards. The first 4 contest we ever did came completely out of my pocket and I kept all the prize money. At the end of the year I took the 3 guys that had helped out for a steak dinner. The next year I offered up shares of the team and one guy took me up on the offer the others were content to help occasionally and drink a few beers and eat some left overs. It's worked out pretty well.
 
I pay for everything. I keep all the money. My wife (the one and only extra team member) I reckon gets to share in the money indirectly. If we have a good year, it usually helps pay for a vacation or something.
 
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