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Thoughts on SELLING OUT!

TheSellOut

TheSellOut

New Member
I have been in talks with a major client of mine about the possibility of them buying me out and having me work directly for them. So we had an initial meeting a month ago were I proposed numbers for salary expectations and a price for the shop. This morning they actually came back! On a good note the salary is very close to were I wanted to be with some great benefits, but the shop price was about half of what I proposed. Their price does cover my overhead and puts a bit of money in my pocket, just not as much as I would have liked.

So I was looking for thoughts from everyone. Anyone been through this before? What are some things I might be giving up or not thinking of?

My shop includes 54" Roland, Laminator, cut/plotter, panel saw, & complete wood shop.

Their main focus for me is to be their designer, setting up brand consistency. While I will also continue to produce in-house promotions, vehicle graphics...

I don't see to many offers like this in my future and am feeling like I should jump all over it. I also feel that I could always go back to self employment in the sign industry as a fall back.

Would love to hear your thoughts! just to let you know I might not get back to this thread til tomorrow...have a lot to finish up today, including the my dreaded taxes!
 
S

signswi

New Member
Better have an employment contract that equals a duration you're comfortable with and has easy outs if you want out but difficult outs for them (to fire you). You're giving up your ability to earn on demand in exchange for the "safety" of a salary so that salary better be damn safe.
 
Billct2

Billct2

Active Member
Will they give you any kind of guarantee of employment, a year. 3, 5?
And as was mentioned, what about a non compete, should you want to do side jobs
and/or go back to work for yourself?
The price for equipment is really a minor detail if you get to walk away with anything in your pocket you're proabaly doing as well as you would if selling your business on the open market.
One other consideration, is you clientele list & files worth anything to some other shop?
If so could you sell that seperately?
 
thinksigns

thinksigns

SnowFlake
The first thing I would worry about is how long they guarantee your employment. Are you moving under their roof or staying put? Just to play devil's advocate, what if they have you train a low wage helper and a year down the road they decide they don't need you to save some money? Are they going to own "Heath Sign Co." since they are buying you out?
 
B

btropical.com

New Member
I would first look at the chics in the office see if there is any nice looking ask alot of questions . Then check out the guarantees that they won't just keep you there to train an inhouse employee .
 
Pat Whatley

Pat Whatley

New Member
jesse said:
Better have an employment contract that equals a duration you're comfortable with and has easy outs if you want out but difficult outs for them (to fire you). You're giving up your ability to earn on demand in exchange for the "safety" of a salary so that salary better be damn safe.
Click to expand...

That. You're discounting your asking price for the business in exchange for guaranteed employment. Your salary should be for a contracted term and amount so that he can run you off any time he wants but he'll still be liable for paying you the full value of the employment contract.

Having bought two shops now the absolute best advice I can offer, though, is to GET A LAWYER. Three or four hours of time with a lawyer now can save you THOUSANDS of dollars and untold stress later.
 
threeputt

threeputt

New Member
When you say the "shop price was about half of what I'd proposed" are you looking at tangible things like inventory, fixtures and equipment?

Or are you looking at good will, blue sky, customer lists, etc?

Because none of those things are going to be considered by this client, I would suspect, since they're not going to run a shop to the public. So they may be only interested in the value of those tangibles.
 
O

ova

New Member
I would think about the equipment I was selling them. Is it used up to the point it will need replaced or start the nickle and dime up keep? If so, will there be problems down the road between them and you.

You understand printers, but do they? These things run perfect today and make you want to pull your hair out tomorrow. If I was selling out, I would make certain it was in writing that all equipment is sold as is. Since you are still going to be an employee, I can see this as possible problems.

If the price was right, I would take the money and move on to a new adventure in life.

Dave
 
Custom_Grafx

Custom_Grafx

New Member
ask for a share in the company during your guaranteed term. not in terms of you take home their profits, but in terms of if they decide to close shop, you get your share. makes it a lot harder for them to get rid of you and vice versa. win win.
 
Firefox

Firefox

New Member
I have often wanted to be an employee... Usually when things are not going well or when I need a vacation!

You can always counter their counter offer.

I too am wondering if you are placing much value on customer good will (client list). If this is a "major client" they won't want to be paying too much for your customers, after all when they buy the business they are loosing a major client right off the bat!

Good luck, get all you can and try to avoid a non-compete clause that might prevent you from starting up again should your new employer fire your sorry a$$!

Before you go too far in the process go see an attorney let him know what you are doing and get his advice on what you can and should be asking for and what to avoid. Also take any proposals to him for review. A little preventative law is usually much cheaper then corrective law!

Good luck.
 
Edserv

Edserv

New Member
Think it over very, very carefully. You're getting ready to become an employee. And if that's what you want, then maybe this will work. But after selling several businesses, it's never the same. If you really want to sell, you might also want to consider selling and moving on (getting employment from an independent company.) From experience, (I know this for a fact,) you're going to be the "go-to-person" for everything. I remember selling one of my small businesses and the new owner had no problem calling me at all hours (day and night,) and got a ton of "free consulting." Sure, if you're savvy enough to factor this in, then go for it. I'm hoping I never want to sell any future endeavors, ever again. Starting over is a bit**.
Good luck to you!
C.
 
MikeSTK

MikeSTK

Dawns Vinyl Designs
For what it's worth I am guessing this is the scenerio: You are tired of what you are doing or tired of the headaches associated with it or else you would ride it out.

If that is the case and you sell, you will officially lose any of the enjoyable stuff and become a dumpster for problem solving. I am thinking you are about to be doubling your problem solving time per day (your shop problems and theirs).

Mkae a clean break. Either focus on a specialty niche area of the business you really like or engage is something totally new and fresh to keep your happitude.

This is all assuming the second scenario isn't you don't want to play salesman and only want to stay in the back producing. If that is the case then continue on your current path.

Either way, best of luck!
 
J

john1

Guest
I don't know man, Times are tough it seems for alot of people. I don't know about closing down my whole operation cause someone thinks they can run a successful business doing what I'm doing. Yeah it's a job but you know how much you can make easily in this industry and you'll be getting paid a portion of the profit on each job now.

Not to mention it's not a concrete position so they could fold in 2-5 years easily. Places are here have been folding left and right. Just the other day a guy hung himself that owned a pizza shop due to business failing and competition rolling in across the street.

I'm not in your position but i would love to have a retail shop and the clientele to stay busy, Take advantage man.
 
Billct2

Billct2

Active Member
Maybe I misunderstood, but the deal you're being offered is to have your shop "bought out" by your major client and the shop will cease to exist. The equipment will then belong to them and you will run their inhouse sign/design shop, correct? You didn't mention whether you and the equip will move to the client's facility, but that's what
it sounded like.
 
TheSellOut

TheSellOut

New Member
There's more I want to address on this thread over the weekend and I want to say thanks for all the feedback so far. It has given me a lot to think about.

Billct you are correct, I would be bought out and the HSC would cease to exist. If it were to happen for the time being my office would remain where it is until they decide where I would be best suited for their needs.
 
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