Get an Investor or Downsize?

Discussion in 'Business Operations' started by MikeTA95, Dec 31, 2013.

  1. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 11,116

    well a 40% owner is NOT an employee, he's just a minority owner.

    next: just because he wants to buy in, doesnt mean you have to let him buy in at a majority rate.

    Tell him he can be a 40% owner and you a 60% owner.

    IF he wants to be a 60% owner that's great, it's going to cost him more than he thinks.

    You sell things, that's what you do.
    the difference is you are negotiating the price of what your company costs.

    He CANNOT buy 60% control for the mere cost of buying some new equipment (depreciable assets)
    If he wants to invest in some equipment that's great, that's a business decision that ALL owners (no matter what percentage you own) make, together.

    the first step is negotiating how much he is going to PAY YOU for 60% control of the company.
    Buying equipment is NOT Paying you.
    So first you need a LUMP of dough.
    That's step one.

    Second, you determine what equipment if any needs to be purchased, from there he's responsible for 60% of the cost of purchase, and you have to come up with the other 40%.
    THAT's how it works.

    Don't let this guy swindle you out of your business for a few shiney machines that will be just as crappy as what you have now in 4-5 years.

    third you need to make sure you have a sufficient OWNER's salary in place as you are the operational owner, and he's just an investor. THEN you split the profits (if any) from the company 40/60.... THATS how it works.

    Lastly, you are under 100k in revenue and you are running multiple crews with multiple trucks?
    you're doing something wrong... you may very well have drained yourself with too many assets/toys.

Share This Page