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How to Institute a Profit-Sharing Program

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This story appears in the December 2014 issue of Entrepreneur. Subscribe »

You'd think such a gesture of goodwill would be easy to implement and would inspire greatness from your staff. But in my experience, profit-sharing can be a tricky piece of business that requires caution—and a seemingly never-ending list of questions to answer, ranging from what, exactly, you are rewarding (net profit, overall customer service, quality?) to whom you should include (everyone, or just the team that earned it?). Here are the main points to consider.

illustration © Paul Wearing

How much

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