looking at buying Dads co.

Discussion in 'Business Operations' started by soccer coach, Aug 28, 2002.

  1. soccer coach

    soccer coach LawnSite Member
    from midwest
    Messages: 104

    I'm thinking of buying Dad out. Some of the things that are coming up I'm sure can be done without much problem but could use some help. One of the big ones is the phone number. He has a sep. land line into his home. How could I get this number to my location? He will be staying on for 10 yrs. What makes the best tax sense? Paying him all in wage or paying him in a form of payment for the company? He wants to sell out while he is in good health and the co. is doing well but wants to remain on at a wage that is equal to what he was paying himself when he owned it. Alot of little things seem to be making things harder than what they should be.
  2. jamesday

    jamesday LawnSite Member
    from MS
    Messages: 47

    Sounds like dad wants to have the cake and eat it too. i've been in business for myself for 7 years. i started when i got out of highschool...i'm 26. my firm is rather successful to be honest, but not because it was easy. i wen through a bloody hostile takeover of my best friend 2 years ago...he was majority share holder of the current company because 3.5 years ago we merged together.

    that was a brief summary of me...now to your problem. first things first. HIRE A CPA OF YOUR OWN. Don't trust dads...that's a conflict of interest. You go find a good one that you like and tell him or her to help you out. I spent 4K on mine and I love her. If I would have had her in the beginning when I was in your stage of taking the company...it would have saved me 100,000K. Trust me. A good CPA will also be able to help you with the tax questions and plan out your companies future. Also, hire a good attorney...you'll need one for the rest of your life. Don't hire a buddy, or a relative for any of the above jobs either. You find a professional that you have no ties to. That way when he or she screws up, you can sue the (*$% out of them. That's called liability. Owe, and don't use a client. You can ask a client for an opinion...but don't mix business with business.

    Good Luck...
  3. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    Why would you continue to pay your dad a owners salary if you own the business?:confused:
  4. jamesday

    jamesday LawnSite Member
    from MS
    Messages: 47

    I was thinking that myself. I might could understand a royalty check for a certain time span...but please. I might could also see him keeping maybe 10% of the stock and getting a check at the end of each year based on the companies gross profit...but that's about it
  5. Sounds like trouble starting to me.
    Somebody has to be boss, is it going to be you?

    If you dont get along well now, bad idea.
    If you do get along, that could change easily.

    Friends, family and business are not a good mix IMHO
  6. 65hoss

    65hoss LawnSite Fanatic
    Messages: 6,360

    Good luck, your really going to need it. This is going to be real sticky. I think I'll keep the rest of my thoughts to myself on this one.
  7. paul

    paul Lawnsite Addict
    Messages: 1,625

    First I take it that you don't have the money to outright buy him out. Are you part of the business now? If you are is your salary comparable to his? Lastly what is the business worth?
  8. soccer coach

    soccer coach LawnSite Member
    from midwest
    Messages: 104

    I should maybe give some more info. His co has brought in abit over 100,000.00 for the last several years. I would be walking in and taking over and paying nothing for it. I don't work for him as I have been off due to a shoulder injury that will be fixed soon. He doesn't want anymore than he could make at a good job. He is putting this much money in his pocket now but just wants to sell when he can get good money for it. Most of the co. we've seen sell out have waited until they have very little to sell as when they get older they work less and make less. He has a good set up and is always turning down work as he is full. His co. is ready to move to the next level if I do this deal. I know his pay will be alot but what would most of you that have a co. that brings an easy 100,000.00 sell the whole deal for today. I also don't have to worry about my help going down the road to be my competition. I have run my own deal before my injury, can you say get some insurance!!! I will start it again if we don't work something out.
  9. KenH

    KenH LawnSite Bronze Member
    from CT
    Messages: 1,622

    Just make sure you have all your numbers straight. Is that 100,000 gross or net??? If it is gross, you are not really talking about alot of money for 2 people. Just be careful.
  10. Lanelle

    Lanelle LawnSite Bronze Member
    Messages: 1,361

    A solo-operator can gross more than $100,000.00 per year. After paying expenses there isn't enough $$ left for two guys to each have 'good pay'.

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