NorthCivil
Civil/Environmental
I work at a small specialty structural consulting firm. 2 owners, both early 60s. 3 employees. 2 smart young juniors, and myself, mid 30's. just been offered to take over from one of the owners who wants to retire.
We are in a HCOL area, in a niche business, right now the construction market is booming. Company is only 6 years old. for the past few years, books show annual profits of 700k before the bosses pay themselves. I'm being offered to buy the retiring partners half for 700k (initial offer).
My main concern is the nature of the existing partnership.
The partner looking to retire is the technical guru, day to day manager, who brings in all of our value clients and lucrative projects from his contacts and relationships.
The partner to remain owns a separate engineering company, much larger, that occupies all of his time. He is not technically skilled in our area of practice. He is not involved one bit in the operation of our business. Sometimes he will bring in work to our business - he will pitch combined engineering services to clients, in conjunction with his other business - but usually that work is not the kind of work that is good for our business. The two businesses operate at two different ends of the market.
That said, we do operate using the infrastructure of the larger company. Office, legal, admin, reception, IT, its all provided from the larger corp. Though it is tracked and we do pay for it - and not a discounted rate! quite expensive, actually. but taking care of those operational headaches though obviously has some value.
I do not know how this business partnership has propogated. it has become very one sided, in my opinion. I can visualize how it may have started as a partnership between the retiring partner who was a solo practitioner, and the remaining partner who already had a business - and then over time became lop-sided. The retiring partner is a very conflict averse guy, I'm imagining he just let things slide to where they are today. Prior to being offered shares and getting a peek at the books, I was under the impression the shareholding was an 80/20 deal or similar between the two partners.
I always visualized starting my own consulting company, with a partner of the same age, where we could together tough out the hardtimes and enjoy the victories. I am leery to get into a partnership where the other guy doesnt lift a finger. No load-sharing, so to speak. In my mind, I feel like the only way I could go forward would be if significant shares were stripped from the do-nothing partner. But I dont imagine such a conversation will go over well with dr do-little.
Am i passing up a good opportunity? any thoughts?
One additional fact: Maybe its just me being cocky, but i cannot see a reasonable alternative succession plan for this business, that could be carried out in the next few years, outside of locking me in. Specialists in our field are very few and far in between. The two juniors, though very bright, are just too young, inexperienced, and not licensed.
We are in a HCOL area, in a niche business, right now the construction market is booming. Company is only 6 years old. for the past few years, books show annual profits of 700k before the bosses pay themselves. I'm being offered to buy the retiring partners half for 700k (initial offer).
My main concern is the nature of the existing partnership.
The partner looking to retire is the technical guru, day to day manager, who brings in all of our value clients and lucrative projects from his contacts and relationships.
The partner to remain owns a separate engineering company, much larger, that occupies all of his time. He is not technically skilled in our area of practice. He is not involved one bit in the operation of our business. Sometimes he will bring in work to our business - he will pitch combined engineering services to clients, in conjunction with his other business - but usually that work is not the kind of work that is good for our business. The two businesses operate at two different ends of the market.
That said, we do operate using the infrastructure of the larger company. Office, legal, admin, reception, IT, its all provided from the larger corp. Though it is tracked and we do pay for it - and not a discounted rate! quite expensive, actually. but taking care of those operational headaches though obviously has some value.
I do not know how this business partnership has propogated. it has become very one sided, in my opinion. I can visualize how it may have started as a partnership between the retiring partner who was a solo practitioner, and the remaining partner who already had a business - and then over time became lop-sided. The retiring partner is a very conflict averse guy, I'm imagining he just let things slide to where they are today. Prior to being offered shares and getting a peek at the books, I was under the impression the shareholding was an 80/20 deal or similar between the two partners.
I always visualized starting my own consulting company, with a partner of the same age, where we could together tough out the hardtimes and enjoy the victories. I am leery to get into a partnership where the other guy doesnt lift a finger. No load-sharing, so to speak. In my mind, I feel like the only way I could go forward would be if significant shares were stripped from the do-nothing partner. But I dont imagine such a conversation will go over well with dr do-little.
Am i passing up a good opportunity? any thoughts?
One additional fact: Maybe its just me being cocky, but i cannot see a reasonable alternative succession plan for this business, that could be carried out in the next few years, outside of locking me in. Specialists in our field are very few and far in between. The two juniors, though very bright, are just too young, inexperienced, and not licensed.
