Am I ready to buy out the company I work for? 4

[Sparweb]

Hi

I have worked for the same consultant for over 10 years, and we still work well together. Now he's retiring, and offered the company to me. This offer follows several events, good and bad. Firstly, I got my mortgage paid off last week, so I'm suddenly debt-free. Not a lot of savings, but a year's salary give or take. I'm pretty young for this stage in life, and I have my wife to credit too (for having a higher salary than me all these years).

The other important event is a rather big screw-up, my fault, and the boss crucified me for it (the same boss making me the offer) and then he figured out how to put it aright for me. I've had a couple of recent mistakes like this one, so I'm very confused as to where I really stand. It shake my confidence in my own decisions, and yet here's the business offer, still on the table.

Since the boss will retire no matter what I do, I may be out looking for work sooner or later. I can take on the business, which is not just consulting, but sells a profitable product that pulls in 400k. Two other full-time employees and a part-timer make that happen. I've always been more concerned with the consulting side, but I'm proud to be the one who designed this major product in the first place. Company goodwill is still strong because the clients who buy the product need the consulting service, too. I could easily value the company above 400k. Borrowing is difficult in the US, but here in Canada, I could borrow the money, and buy him out next week.

Problem is, I've been soul-searching... why have I been making mistakes lately? I think back to what I was taught in college, and what the old boss has shown me along the way. There's no reason for me to have screwed up the things I did, if I had just taken charge of my situation, and the client's, more professionally than I did. I have this pretty plaque on the wall now, but I don't think I'm living up to it.

Everybody screws up from time to time, but I'm about to shed the one guy who will go to bat for me when I do!

Does this sound like anyone else's experience?
Am I just letting the nerves get the better of me, or does it sound like I'm not ready for the big step?


PS - If I set up my own practice, then whoever buys my boss' company would kick my a**.

PPS- If I get a job at another company, it will probably be in another city, meaning my wife would have to choose if she should leave her job. Which pays more. Probabaly more than any future job I could get.


Steve


STF

 

[ajack1]

It may seem obvious but the first thing you need to decide is do I want to own a business? There are certainly many benefits but there are also the downsides, extra work and numerous problems and it will certainly put added requirements on your social and family time.

If you do decide you want to go down that route, you need to look at this offer as a business person, is it a good business deal, are there better deals to be had elsewhere or am I just considering it because it is the easiest option? Taking the easiest option is seldom good business sense.

I do find your comment “If I set up my own practice, then whoever buys my boss' company would kick my a**” a little bit worrying, why would you think that? If you have the skills and drive to run a business why do you think you could not make it starting out on your own? Of course you would not have the initial income but the start up costs would be far lower as well.

Some of the above advice is very good, the idea of getting your current boss to stay on for a transition period would be essential in my opinion, in fact I thought it was pretty much a given when buying a going concern, also make sure he signs a non compete agreement that he cannot start another company or work anywhere they may have a conflict of interest for as long as possible.

As mentioned above make sure you can see all the books over a period of time and have them looked at professionally and valued by at least two independent parties. I am not suggesting that your boss would do anything underhand but if he has been running a business for a good while and you are totally new to it I am sure he could pull the wool over your eyes, you would not be the first person to have this done to them.

Basically if you do want to go into business this will probably be your first business decision and probably the biggest one you will have to make for a long time, make sure you think about it as a business man and you are not just taking an “easy” option because it is there in front of you.

Good luck whatever you decide to do.