OT What should I do (business Op)
 

I was just aproached with a very interesting offer. I am not sure what I should do and I always get good insite from you guys so I figured I would shoot it out there.

I have been self employeed for almost all my life. I currently am running a high end audio/video store that is finally starting to take off and make me some money. However I was just asked if I would sell it and start up a new business with a customer of mine. He wants me to run his new AV devision of his business. He has proposed a very atractive offer and I am wondering if I should continure to investigate.

Have any of you guys been self employeed for a long time and found happiness working for others? What are your ideas?

Thanks
Jon

I haven't been in the position my self however, my father had a law practice for many years with a partner. His partner was egostistical and spent most of his time on image rather than work.

My brother owned a carpet cleaning business with a close friend. No falling out. My brother never gave the effort like his friend did and felt that it would hurt the business as well as the friendship. He bowed out.

Partnership is great if handled correctly, but get the wrong partner and all hell could break loose.

By the way, if your business is getting to a good point, enjoy it. Maybe you can find ways of partnering at arms length.

This doesn't sound like a parnership to me, rather a employee position.

I would suggest you look at your five year plan in your current business and see where you expect to be and make a five year estimate on the new offer and compare the two. Do not make the choice just based on where you will be today.

Remember, owning your own business puts you in control, whereas you are never in control working for someone else.

Good luck on whichever choice you make.

I've been in several partnerships and I'll never do it again. For the vast majority they DON'T WORK. If this is a partnership, think again, or better yet, consult a lawyer, they'll all say how bad they can get. If it's an employer/employee situation, you need to ascertain how viable the business is going to be because you're going to abandon all the hard work you've put into it.

On the other hand, I was in the same situation as you. I had dissolved my partnership and was on the upswing on the business end, but I chucked it in to get back into corporate life. There are benefits and drawbacks to both, but I was at the age where I needed some stability (not that corporate life is that stable anymore!!). I had some real highs and real lows during my solo career but needed to smooth out the curve. When I went back into corporate, I found that I could actually take a vacation (I took one vacation in 8 years in my own business) and the weekends were mine for the most part. Benefits were also better. In the end, I'm glad I made the jump. I learned a lot in those 8 years and it makes me a better business person now. And from what I know now, I could get back into the business if I wanted, but I have no desire at this point. Good luck and if you need some more ideas, I'd be more than happy to help.

I lost a life long friend from just that. A partnership never again.

I could never go to work for anyone ever again. 40 hours a week is just not enough time to get it all done. A boss would make me go home after 40, my wife would get sick of me, the kids would hate it, the dog would bite me, I'd end up getting divorced and give it all to my wife. Just sounds NON-cheerful to me

I agree with Too Old 100 percent. I am in that position now and not sure what to do about it:(

Is this the customer I met in Jan?

The following is assuming it is: Jon, you are a practitioner(sp?) by nature, and what this man will be looking for is a manager. The two are usually VERY VERY different!!! Most practitioners who get into a management role stop doing what they are good at, and start doing what they are not.

I predict you would get this division set up from an operational or technical perspective, and not be the best at managing it long term. This guy will have expectations you wont enjoy satisfying, and you two will end up parting ways, after you have established a foundation for his AV department. And it won't be that he takes advantage of you, but that he will need a different set of skills in his manager after it stops being entroupeanoural(sp!!!) and starts being corporate. I've consulted with too many businesses foundering at this key point, and usually the owner is the manager/manager, and not willing to step down as manager because of paternal emotions. In your case, the owner will be able to make the hard decision, and you'll lose.

What to do about it? Structure a arrangement where you get paid to set it up, paid to act as tech. advisor, and somehow get royalties on the division's sales even after a professional manager is brought in. You'll probably enjoy it a lot more that way.


And remember, you've got to work with this guy, so make sure he's someone you enjoy being around AND RESPECT.

If you want to talk further about this, give me a call.

Everyone has posted some good comments regarding partnerships. I'd go ahead and investigate it like you said, but think long and hard before jumping in.

Good luck Jon

if you do a partner make sure you do the proper paper work. it can be done.

if it sounds that good try it for a year. don't sell your place just hire sombody to take your spot. in a year see wear you are and then decide.

Treadwell

P.S. i did have a partner and got buried because lack of paper work. there is nothing like working for yourself. you only have to deal with yourself.

STAY ON YOUR OWN!! You can't beat being your own boss, That is unless your boss is an as#h*le:D . Sereously. I bought out my boss 8 years ago and it was the best thing I ever did. You make or break on your own talents, and when you make mone it's yours. Not the bosses. Thats my 2 cents.

This is not a partnership. It is me selling my business to some one else and staying on to work for them.

My concerns are as Chart has pointed out after a year of working for him he finds that he needs a different person and gets some one else. This could leave me in the position of having to take a job with another company at MUCH less pay with no real benifiets. That is the risk that I see that I am taking.

The pluses are that I have talked to a couple of his employees and they all say that he treats the guys that he likes very well. The initial pay that he has laid out is very good, at leaste on the surface. I am not sure what a guy like me is worth as there are really very few of us around that have the skills to do a job from start to finish. Lots of specialists but very few Jack-asses-of-all.

Does this guy realize that you will be spending at least 3/4 of your day on OSO while at work..:D

Don't sell. If things go bad money wise he may have to let you go, and then where would you be? I have been in business 11 yrs and every morning I have great expectations and hopes, then the headaches begin and by lunch time I am ready quit! Then I think about what I have, what I have built, and how well this positions suits my personality. I could not picture myself anywhere else, or working for someone else. If you want a change that's fine, sell your busines and move on, don't stay.

Look at it this way, after all the work you did to your boat would you sell it to someone and go on it as a co-pilot?? No way!!

Audio, from the way you describe it in post 12, I would stay where you are;)

sounds like way too many "what ifs" compared to what you "know" about where you are now.

Just my .02:)

Long story short...stay put;)

if your makign money and you see a turnign poitn (upward hopefully) stick it out. I also run my own lil $$ making operation nothign to substantial but enough to keep me afloat. I have worked for other before doignteh same thing and its a grind. When i am working for myself i can se my bussiness account getting bigger. When i screw up its all on me to make it right but when i suceed it know its all me :D

Its a gamble but i know i don;t get any satisfaction out of workign for others its just a way to get some green.

I say if you are gona sell it sell it out and be on to something else big or small. Can't see many positives of working for the new owner of your old company. Rag's

I've had my own business for the last 13 years, and I know I couldn't work for anyone else. I will succeed or fail on my own. I know if it goes bad, it's my own fault, and I'd much rather have my destiny in my own hands. Another thing is that someone may want me to do something that I thought was unethical, which I absolutely would not do, even if I had to quit my job. I haven't had a real vacation in 13 years, because if I'm busy, I don't have the time, and if I'm not busy, I'm out beating the bushes trying to get busy. The only regret I have is not going on my own about 15 years earlier. It's your baby, your nutured it and watched it grow. Stay with it to reap the harvest.

Some thoughts, knowing no background:

- It would be extremely hard for me to work for someone else after having worked for myself for the last 20 years.

- Knowing a little bit of the industry, I don't see a very bright future for a high end audio/video store, or for an audio/video store, period. There are always exceptions.

- Can you do both? Put someone in the store, and run that guy's AV gig. If it doesn't work out, there's always a fallback.

I would agree, a trial period would be nice.

You've worked hard to build something and now it looks like it might finally take off for you. Why hand that to someone else?

What happens if he sells the business? Are you a part owner? You really need to think about the exit before you enter.

He is interested in your company because he sees that it has potential. That's cool. He is hoping that with his capital that he can stand to make a large amount of money. That's fair. Unfortinatly, he's not able to run the company and thus needs you. Cool. The problem is that you'll become an employee. The advantage is that you'll have a steady income plus benifits. The disadvantage is that the margin goes to the owner you'll have to shift from being your own boss to having somebody else control your company. There are pluses and minuses, but be sure you really look at them because you might not like the minuses.

you will never F_U_C_K yourself, but someone will F_U_C_K you

Jon,

Lots of good ideas. Here is another. Consider him contracting your company to establish and then consult his AV division. He can also hire you as his exclusive installer. You may even work out a deal whereby if you "upsell" more equipment etc. you get a commission on it. I would remain solo for a while to ensure that you two will work well together. I think that if he has a manager run the store after they pay you to set it up, but they pay you to consult to them on an ongoing basis for systems, design etc., and use you as their "EXCLUSIVE" installation contractor it can be a win win win. You win by maintaining your indidviduality, he wins by having you as a consultant and installer, and the customer wins by having the best of both.

Be certain that you have an"exit clause" that is fair, equitable, and agreed upon and in writing prior to any business. This will ensure that if it is not good for either of you both of your interests are protected. Good luck.

Shane that was what I was trying to figure out last night. I am going to call up Chart this afternoon about the situation and see what his ideas are as this I think is right up his ally. If I can figure out something along the lines of what Shane is saying then I would be psyched.

Jon

Jon,

You have my numbers. I am on a conference call from 9-10 and will be here till noon. Then to lunch, back by 1 and here till 3. Then on the road to Skaterfest. Call me at the office or on the cell if you think I might be able to help.

Re: OT What should I do (business Op)
 

Keep at it, and here is the answer posted by a wise man.
Rules of business:
1. No Partners
2. No employees (or the least possible) contract everything

Shane don't hurt your back with that schedule, five hard hours!:eek:

Jon,

After you do this deal, why don't you invite your in-laws to move in with you and then have cousin Eddie take up space in your driveway with his RV, and then maybe you could do a running belly flop into a briar patch follwed by a nice cool alcohol bath...

Shane's got a good idea, that might just be doable. I'm not fond of you becoming an employee. I just don't think it'll work.

Oh NOT to worry my Canadian friend. I will certainly be sleeping during those meetings! Remeber, tehy said that they wanted me to attend, they said nothing about paying attention.;)

My Dad always told me "Sink or Swim by yourself". Too Old hit it on the head with his comments. Partnerships are a big pain in the ass no matter what, proper paperwork or not.

I know some folks who were in business together as partners and believe it or not the two guys got along great, it was the WIFES that felt the other one was getting jipped.

"How come he got a new company car"
"How come he got 4 more vacation days than you did"
"How come he got to go on that golf outing"
"How come you go into the office earlier than he"

ETC, ETC, ETC

The wifes *****'d so much that it got to the husbands and the partnership broke up.

Having him contract with you is a good start. You are still on your own and can do what you want. It will tell you a lot about how the other person acts.

Jeff

Jon;
In your post you stated that the buisness is just now starting to make you some money. This would lead me to believe that you have paid your dues and made plenty of sacrifices to get to this point. It also tells me that you have the skills, technical and business, to make your business successful.
I would stay the course and reap the benefits that you have earned.

Tell me how you really feal :D:D You always crack me up :D:D

Keep it coming I am still reading all the input. I have gotten just what I expected from this site. Some positive reinforcement and some great questions that I will be able to ask them at the interview (actually before that when I am at this guys house putting his projector back together for him.

Jon

stay put , just look at the KE deal. the best boss is being your own boss, period...:fish:

And you just know ''Cousin Eddie'' is gonna have himself some great big ol`dogs too!:D

partnerships only work in odd number less than 3

Equity Ownership
 

To win at the game of wealth accumulation means you have to be in positions of equity ownership. 70% of the millionaires in this country own their own business. The rest are professional athletes, senior corporate executives, entertainers, and professionals (doctors, lawyers, engineers).

As a individual person running and owning a business you will eventually max out what you can produce with your given resources. One way to expand your revenue generating operations is to allow others to do tasks that contribute to revenue generation. Sometimes this means you need a partner to expand your capacities.

In this case it seems that this other person values your skills and believes that with you he can generate additional revenue for him. The question is will this arrangement allow you to increase your capacity to do the same. Will he brings additional high end clients, get discounts on your supplies, provide skilled assistance, etc. If so, there are reasons to look at partnering.

In an equity partnership, you own some percentage of the business. This includes the expenses, liabilities and profits that are generated.

At some future point if it does not work out, you take your customers that you brought to the business, settle up on expenses, liabilities, and share in the profits incurred while there. You then sell your piece of the ownership and go on your way.

It is a complicated business arrangement, but it is done all the time with great success. Clear expectations and a good lawyer will protect both of you and your present and future interests.

Good Luck,
Doug

I once had a partner and it literally tore me apart...caused me incredible grief over the years and other people still blame me for bringing him into the inner circle.

He was always talking away, grinding people for a better price, running out of fuel with his boat, checking the engine oil with the engines idling, ran around Newport with his fenders hanging out, trailered his boat down hill with the brakes on and flames shooting out from his wheel wells, hung out at sleezy gentlemens clubs and had five girlfriends with the name Michelle.

I am still trying to get on with my life but I am having no luck!!!!

DMan

Hey Jon...find a partner in Southern California and come live where all the winning sports teams reside!!!! Oh yeah!!! Go Ducks!!!!

Ron I was wondering what you were going to write. I did know it would at leaste be interesting :D:D

Jon:

Your doing the right thing by considering the offer and getting advice from as many different angles as you can. Chart’s post was awesome. Sounds like you know him well enough to spend some time on the phone testing ideas – I would strongly recommend leaning on him as much as he will let you.

Having met you once, my read was you’re the creative type – the best part for you is probably listening to the clients desires and giving birth to their dreams. The flip side to that typically is you probably chafe under the nuts and bolts, bureaucratic, bookkeeping, etc, functions of the business world. Unfortunately the beginning of waterbum’s post is a fundamental truth of finance. If wealth accumulation is your goal, you need to be an owner.

If this guy has something you need (maybe capital) to help you move towards your long-term goals, Shane’s idea sounds damn good. If your allowing his offer of an increase in current income to stampede you away from your long-term goals – you probably wont be satisfied in the future regardless of how kewl this guy is!

Good luck!

p.s. Dman, not a single smilie face :confused: :confused: