Family owned, partnership father and son

You sound too emotional to discuss this properly. You are only guessing at most things and don't have a real handle on business, itself. You don't have any facts about what you're family is gonna do, just guesses. When you have more information, then maybe some of us can help or make suggestions. Otherwise, just keep on keeping on, until something concrete starts to happen.

 

Any other siblings in the family? Do you live with your parents or on your own. Do you have a family.
Is your father old and do you think he is going to pass it on to you. Maybe he, your father, thinks you can survive with your sticker business after he sells the business and ends up with a chunk of cash since everything is paid off.

 

If it were me, I'd just walk away from it all... Nothing of this sounds good...The money, the relationship dynamic...nothing. You sound like you'd be successful on your own...

 

Yea but he is only 15 years old!

 

As with any business transaction, things need to be clearer and in writing if possible.
Planning the rest of your life on a maybe will not do your blood pressure much good.
At the minimum there should be a timetable and a clear understanding with both parties the % of the business you will get.

That having been said, myself and 2 other family members now run the business my father built over the years.
Nothing was in writing but everything was pretty clear on when we would take over the business.
There are other ways to increase your salary indirectly, for example you could work it out so that the company pays for your health care premiums or maybe a company vehicle.

A lot of it depends on the attitude of your family. Are they building up the business for their family to inherit or do they plan on selling it so they can retire in Cancun?

 

Having a family business myself that I started and brought in my dad and brother, the family dynamic is a tough one. If you can't segment your life, prepare to lose relationships if you become partners. We have struggled with direction, growth strategies, equipment, clients, etc. Unfortunately, we lost our dad to cancer in 2015 before he could see the company become self-sustaining.

This forced me and my brother to make a decision, this is a business and put all effort in or this was a hobby and find a job. We continued on.

My only advice is to examine if your relationship is strong enough to withstand a hurricane of disagreements, anger, resentment, frustration, and fear and also to not make a decision based on assumed financials. You have a sales employee making barely over minimum wage, yourself is not making much in wage and the business is only doing $300k/year (assumed) which means cash flow will be tight and will make growth rough until you can increase free cash. Look at the financials and if the equipment gets paid off does it open up your free cash to build a cushion for growth risks.

My .02 take it for what it's worth.

PS: if you continue on in your venture and you leave your company, are you prepared to buy all your own equipment? Since you are using company equipment to make your products you will be losing that.

 

Have a business broker value the business and set up the deal.

 

lol, love the username, btw.
Just a thought here: your "side business" lacks overhead, such as equipment/benefits. you're making money, because you've got zero investment, zero liabilities, and not most likely not paying taxes on your income.

honestly, you have no room for negotiation here. Fair would be whatever is offered, and the fact they're trying to include you in their business is a blessing.... but you have to make the business GROW, before you should expect to benefit from it. if you think you've got it better on your own, then more power to ya, but go get your own gear.

 

i would stay on,but you need to structure the business as a corporation with specific parameters. partners are for dancing.

 

You might be better off finding another job. 55-60 hours per week for 37k means you are just about working for minimum wage. You can still have your sticker business on the side as long as "Pops" doesn't mind you using his equipment and shop space. Once you have to pay for all that yourself, you may find the sticker business less profitable.

Note: the sticker business is notoriously unprofitable for small business owners. Companies like Sticker Mule offer easy ordering, shipping to the customers door, reliability, and low prices. I refer my sticker customers to Sticker Mule (I do, however, offer my design services).

 

Do you know your annual sales? Do you know if the business is incorporated? Giving you a percentage of the company might not mean anything until the company is sold either to an outside buyer or you. If you buy it from him, the company would still need to be valued by an outside firm (not your dad) and then you would need to pay your dad the percentage he still owns. The sale could be structured many ways but most common would be you pay him a monthly amount for a certain amount of years but the business would need to remain profitable. If you don't have the same business chops that he had and the business tanks, it won't work out for either one of you.

 

Hes giving you something that he built up and worked for, debt free with assets and you're hung up on wanting to keep 16k in sticker orders? Seems a bit selfish to me. You're not traveling the world on $16k a year and if by some miracle this sticker side job made enough to do this, you wont have the time to travel much of anywhere.
Id take a good hard look at what you posted and really analyze what you said. Then ask yourself if your father is hard to work for or if the faults fall more on your side of this equation. Then decide what you want to do.

 

I would binge watch The Profit this weekend then make your decision.

 

I agree to a point on the side business part but not the rest. Somebody who is working that many hours for the core business at that kind of gross income for SIX years HAS ALREADY added plenty of value to what is a family business. What kind of wages and benefits would the parents need to be offering to get equal productivity from a non family member?

If this business is as profitable as most and he and the other employee are doing the lion's share of the work, the parent's have already eased back quite a bit and are making a nice income off the son and employee's efforts. He didn't share much of the details of what equipment, property, printers need to be paid off and how long any of its been owned or in operation, but I'd say that his parents have been living pretty well on the backs of their son and one low paid employee.

We struggle here with this very issue because we're trying to compete in THE most expensive county in one of the most expensive states in the country when average wages and benefits are factored in. Most of the other shops in our area are family run businesses employing spouses, multiple teenage children and adult children. My wife works here and is a 50% partner, but I guarantee you that her income isn't at the expense of what we pay our employee and she does so much more overall for the sake of the business than any employee we've ever had. We don't know exactly what the others pay everyone, but having worked for several family businesses over the decades and tracking the starting wages most around here offer when they advertise seeking non-family to hire, my guess is the situation with most is similar to what the OP is describing.

I once worked for a family business that had a brother in law and one son working there. The brother in law and son were integral parts of the business as was I. After several years of not receiving any kind of raise, the brother in law bailed leaving the son and I to pick up the slack with the promise from the dad of building "sweat equity" ( code for I'm going to extract all I can from you until you wise up and leave) so the business would be handed to us when he retired. Five years later and no raises, other perks or clear path to a transfer of ownership, I bailed for greener pastures as well.

Frankly, I don't see when this guy sleeps and travels around the world. If he's working that many hours during daylight hours AND doing $1,350 worth of moonlighting per month on average, that doesn't leave many hours to live a life away from work.

 

Unfortunately, the demographics have nothing to do with this OP's predicament. At the moment he doesn't know any of the particulars, so he's not capable of making an educated decision about anything. He has only one loyal employee to worry about who has been working for peanuts, which would most likely change, unless that's a part-time salary. Owners and close family will always work for less, as they feel an obligation to make the family business a success. Employees are not always that obligated. However, this OP needs to find out much more about every facet of the family business before he can just make an emotional decision, based on a buncha I dunno........??

We all have.... and know of problems that can come about or be prevented, but there's no sense in spinning this whole thing around without any given facts.

 

You say your mother and fater are the boss. Then you say there is one other employee. You also state your "boss" lets you run your sticker business out of the shop. Is the "boss" the other employee and makes less than you or the "boss" is your Pop.
This whole story sounds like a Dickens story, where you work long hours for small pay and use your other business money to travel the world, or is that from watching the National Geographic channel in the room under the stairs.

 

Nat Geo souns better than actually traveling. After watching "Hotel Impossible" I'm nervous about all beds now