ServiceCo – ProfitModel

Profit Share Model

Key Definitions

OpCo (Operating Company)

An individual business entity within the group. Each OpCo generates its own revenue from its own market. Combined OpCo profit is the total net operating profit across all OpCos serviced by ServiceCo in a given month.

ServiceCo (Service Company)

The shared team entity — this is us. ServiceCo is contracted by each OpCo to deliver operational work. All team members participate in ServiceCo’s revenue. ServiceCo distributes 90% of what it receives to team members equally, and retains 10% for operational reserves and reinvestment.

Combined Profit

The sum of all OpCo net operating profit for the month — after operating expenses, before the ServiceCo service fee, and before corporate income tax. This is the base figure all calculations use.

Company Retained

Profit that remains within the OpCos and is not paid to ServiceCo. At each threshold, the OpCos’ contractual obligation to ServiceCo is capped — all profit above that cap is retained by the business for growth, reinvestment, and future development.

Combined OpCo Monthly Profit

R1,000,000

R50KR10M

Team Size (N)

4 members

–

Per Member / Month

–

Team Total

–

Company Retained

–

ServiceCo Retains

–

Monthly Profit Distribution

Team (split equally): –

ServiceCo retained: –

Retained by company: –

Money Flow

Combined OpCo Profit

–

→

Paid to ServiceCo

–

→

Team (90%)

–

ServiceCo keeps (10%)

–

How to read this model ▼

Pre-Threshold 1: OpCos pay 90% of their combined monthly profit to ServiceCo. ServiceCo splits this 90/10 — 90% to the team equally, 10% retained as an operational reserve.

Threshold 1 (R100,000/member): Once each member’s share reaches R100,000/month, payments are fixed at that level. The OpCos’ contractual obligation to ServiceCo is capped — all profit above the cap is retained by the business for growth and reinvestment.

Threshold 2 (R200,000/member): When OpCos earn enough that 60% of their profit (×90%) ÷ N = R200,000, payments step up and OpCos pay 60% to ServiceCo going forward.

Threshold 3 (R300,000+ /member): When OpCos earn enough that 40% × 90% ÷ N = R300,000, the final tier activates. Members receive a floor of R300,000 or 5% of combined profit — whichever is higher. The 5% ceiling only becomes active above R6,000,000 combined profit.

Downgrade rule: Falling below a T2 or T3 trigger for 3 consecutive months reverts to the previous tier. T1 reverts after 1 month below trigger.

Company Retained = profit held within OpCos + ServiceCo’s 10% operational reserve. Both remain within the business structure and are deployed for growth, new products, and reinvestment.

Threshold Trigger Points by Team Size

Team (N)	T1 Trigger	Per Member T1	T2 Trigger	Per Member T2	T3 Trigger	Per Member T3

5% Ceiling — When Does It Activate?

The R300,000 floor and the 5% ceiling are both per member figures. Setting them equal: 5% × profit = R300,000 → profit = R6,000,000. Team size (N) cancels out — the crossover is always R6,000,000 regardless of how many members there are.

Exception — N = 8: The T3 formula produces (40% × 90%) ÷ 8 = 4.5% per member, which is permanently below the 5% ceiling. For a full team of 8 the ceiling never activates — the formula itself is the operative constraint.

R3,000,000 profit

R300,000

Floor applies (5% = R150k)

R6,000,000 profit

R300,000

Floor = Ceiling crossover

R10,000,000 profit

R500,000

5% ceiling active (R500k)

“Company Retained” = profit retained within OpCos + ServiceCo’s 10% operational reserve. Both remain within the business structure for growth, reinvestment, and future development. At Threshold 3 with high revenue, the company retains approximately 60–64% of combined profit.