What If Investors?

Discussion in 'Business Operations' started by willietd2, Dec 2, 2007.

  1. willietd2

    willietd2 LawnSite Member
    from OHIO
    Posts: 210

    What If An Investor Came To You Offering 100,000 Dollars To Back Your Company With. The Investor Is Not Concerned With A Return For A Couple Of Years. If It Works,then We Both Make Money, If It Dont, The Investor Is Happy With Half The Of The Product He Invested The Money In. The Only Thing You Have To Do Is Run The Company And Hustle The Work To Keep It Busy. What Would Your Aproach Be? Willie
     
  2. Roger

    Roger LawnSite Fanatic
    Posts: 5,927

    Why would anybody invest their money in this way? Investing in a business enterprise can be risky. Maybe I am not understanding your framework here. I suppose you mean the investor is looking to long-term high return on his investment, not expecting much in the first couple of years. Is this right?

    On second piece, why would he be happy to get back half of his investment? You have not stated what you have in the investment. If nearly 100% of the assets are bought with his investment, why wouldn't he expect to get any money possible from the assets when liquidated? If the sum of money on the initial investment is split differently (e.g. he has 50%, you have 50%), then he would still not be happy to give away his money for you to keep your part of the investment.

    Your scenario needs more pieces, more specifics, to make any assessment.
     
  3. willietd2

    willietd2 LawnSite Member
    from OHIO
    Posts: 210

    Alright,lets Just Say Someone Comes To You With 100 Grand To Invest. What Would You Do?
     
  4. colawn

    colawn LawnSite Member
    from co
    Posts: 141

    what would the investors return be? I would most likely say no thanks. It doesn't cost that much to be in this business and do well.
     
  5. Roger

    Roger LawnSite Fanatic
    Posts: 5,927

    I would take the money and make a good financial investment (e.g. stocks, bonds, mutual funds), and let the money grow. Or, I would find a good business growth opportunity. I certainly would not invest it into a lawn service business.
     
  6. jimmyburg

    jimmyburg LawnSite Senior Member
    Posts: 701

    if you take the money;expect a silent partner who is not so silent.
     
  7. Flow Control

    Flow Control LawnSite Bronze Member
    Posts: 1,267

    Tell him to invest in metals not trucks or mowers but metals, as the economy goes to **** the value of Gold and other precious metals will rise.
     
  8. willietd2

    willietd2 LawnSite Member
    from OHIO
    Posts: 210

    Alright,some Of What I Expected. I Actually Had A Guy Come To Me With 100 Grand Wanting To Expand My Company. I Turned It Down,being Afraid Of That Much Money,well Not The Money The Responsibility Of Making That Work In A Market Like Ours. The Guy Is A Good Freind And I Would Like It To Stay That Way. My Company Is Small Around 45 To50 Mowing Accounts And 90 To 100 Spray And Fert Acounts. I Sarted It From Nothing To What Little Bit It Is, Always Believing You Can Get To Big To Quick. Thanks For Everyones Input. Didnt Mean To Make You Mad Roger And Go All Midevil On Me. Willie
     
  9. Doug1966

    Doug1966 LawnSite Member
    Posts: 118

    willie, why do you capitalize the first letter of every word you write? Makes it very hard to read. Is there a reason you do this?
     
  10. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    I think he offered the money because he is smart and realizes it may take that much of a cushion for you to expand beyond a solo operator. I have used nearly that much in my first few years to get the company running right and profitable. It is very difficult to grow the business when you are in the field.

    I could have been profitable from day one if I worked in the field but I would never have the foundation for growth I have now. It is easy to get new clients but keeping the new clients beyond when you are working in the field is where the real business acumen shows. That is where a company emerges rather than a job you own.

    I am not as negative as most I would talk about it and maybe use the money as a emergency fund or for larger purchases office down payment, trucks etc.

    Even the SBA knows it is difficult to make payments when you are just getting started. Their small biz loans start at a 50-K loan with interest only payments for 3 years I think. Then you set a 5 yr fixed payment plant to pay it off.

    I wouldn't be so fast to say no thanks. But you should be talking to him not us.
     

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