How to become a partner

[DrThink]

I have been working in a small structural & MEP consulting company for about 7 years, and I run the structural side of the business which is me and two other newer people. I feel like my boss needs me more than I need him. I don’t want to just train people to do my work like he wants me to do.

How is the best way to go about approaching him to make me a partner? He is pushing 60 years and may retire soon. Any suggestions?

And how is this usually done, do I slowly buy shares?

 

[aspearin1]

I would think one of the first things to do would be to befriend him and express an interest. This should show a very strong commitment on your part to the well being of the company as well as show a confidence in the company's services. Expressing this interest could open his eyes to something that never crossed his mind. He may say "no" at first, but he'll at least take notice to your work and know that you're serious. At the very least, it's a flattering gesture, and it couldn't hurt your relationship. But approach in a positive light. Don't concern the conversation with your dissatisfactions. Show that you love the company and wish to have a higher stake in it.

aspearin1

 

[JAE]

Agree...but keep in mind that if your boss is the sole owner of the company, then his retirement options are:

1. Simply retire, close down the business, and send everyone packing,

2. Sell the firm to another firm where you would become part of the new firm and under its management,

3. Sell the firm to in-house employees (such as yourself).

Option 1 gives your boss nothing financially...there is value in any firm - existing clients, reputation, goodwill, etc.

Option 2 happens a lot - but this gives you no improvement in your position but might open the door to a management position in the firm and lots of potential....even part ownership in the buying firm.

Option 3 also happens to a lot of firms but the big roadblock to this is money. Usually, a firm has slowly built a reputation and value over the years and individuals within that firm many times do not have the cash to realize the full value of the firm. The owner may wish to get all he can from the firm and selling to you vs. Option 2 above may not be attractive.

Usually, firms look ahead and plan for leadership and ownership transition (good firms anyway). You should first talk to your boss an discuss his whole vision of which option he is considering (or you might find out he's not thinking of anything - which would be a bad thing).

 

[DrThink]

Thanks for the replies,

1. I dont think he is going to do option 1. I hope not.

2. This may happen but I think he would rather do option 3.

3. I was thinking since I run the structural and there is another guy that runs the MEP side, that maybe he would let us buy into the company for 24.5% of the shares each. And he would be able to retire and retain 51% of the shares. That way he retains ownership but doesn't have to actively be a part of the company and can still maintain income. Then we would slowly buy him out. Is this how option 3 usually works?

Thanks

 

[abzpdl]

There's only two business reasons to get a partner, as I see it. 1) To obtain a special labor or talent that we can't afford. 2) To gain the financial strength (money) that we so not have. Gaining a partner, remember, means giving up a piece of ownership (control) and a chunk of profits. You'll need to consider the goals (financial and quality of life) of the owner. Answer to yourself - why would the owner want to let you buy in? Maybe when he's ready to retire he'll want to sell to someone (you) he trusts to keep his legacy going, and not just the highest bidder. Can you start your own company...just a thought.