Discussion in 'Business Operations' started by dstifel, Jul 17, 2013.

  1. dstifel

    dstifel LawnSite Senior Member
    Messages: 928

    Been meeting with a company that is well established and wanting to grow. They want to merge with me. Deal is father and son own it. They would make me and son 25% owner and dad 50 for next two years then we would buy his share. Reason they want me on board is we are trying to buy out a nursery and need more man power to run it. I have them my demands for salary and they agreed. What do you guys think? I would run landscape crews and nursery son mowing dad chemicals and books.
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,631

    I wouldn't do it. Sounds like a lot of risk.
  3. sehitchman

    sehitchman LawnSite Senior Member
    Messages: 996

    Many years ago I went to work with a man who was looking for a young man to train and take over the business. I was made promises and given a price to purchase the balance of the business and he was going to allow my work to earn 25%. A few years later, he re-married, hired the low life lazy step daughter who told me that it would all be hers one day. When I confronted the man, he simply stated, if I had the money I could buy the business, his wife wanted the step daughter to take it over. I was out and moved 600 miles to start over, ended up getting about 10 cents on the dollar for the stock I owned. Unless you own 51% of a privately held company you are SOL plus at some point, the son will be a 75% owner and your share will be worthless. There are always exceptions, so if the wage is good for you just do it and take the risk. Get a contract if you can, but remember, blood is thicket than water. How much would you need to make the deal on the nursery and go it alone?
  4. dstifel

    dstifel LawnSite Senior Member
    Messages: 928

    Contract states that when the dad leaves we have to split his share at no point can one of us become the majority shareholder. The nursery is in do able by myself.
  5. alexschultz1

    alexschultz1 LawnSite Bronze Member
    Messages: 1,588

    One of my clients is an extremely successful lawyer and owns multiple businesses. I was in his home office one day to collect a check and ask for some advice on a person who was not holding his own on a renovation project we started. His only words were "I've been a millionaire and broke more times than you can imagine, and the best advice I can give you is the only time you ever want to be in business with a partner is if that partner is your wife. If she ends up not working out, she will take 50% anyways"
  6. sehitchman

    sehitchman LawnSite Senior Member
    Messages: 996

    So if you own the business 50 50, who has the final say so in business decisions? Is the father going to allow you to pay him with profits from the business when he leaves? What if the son turns to drugs and alcohol and cannot get out of bed to complete the mowing route, can you afford to go it alone to finance and run the company.

    Get your attorney involved, get contracts signed, make sure you are a signer on all checks and cash withdrawals. Don't be like me and just trust someone. I spent over six years building a business, found the guy committing tax fraud, and keeping $ off the books. I spent a bunch on accountant and attorney fees just to stay out of trouble. I'm a risk taker and would probably do it all over again... but it is your life, be careful.
    Last edited: Jul 17, 2013
  7. dllawson

    dllawson LawnSite Member
    Messages: 172

    Another option is to create a joint venture. This way you would still own the landscape work, the other company would still own the maintenance and your companies could jointly own the nursery.
  8. dstifel

    dstifel LawnSite Senior Member
    Messages: 928

    Ok guys did some more research. The dad has an investment account set up that x amount of profit goes into a month. When he leaves he takes 50% of that. This account cannot be touched until you are ready to quit the company and "retire". Don't have numbers of what this account has in it or how much goes in yet but working on finding out. My mom is a CPA and looking over books and numbers and having a lawyer look over contracts. I appreciate support help and suggestions ill keep u updated as it goes along.
  9. dstifel

    dstifel LawnSite Senior Member
    Messages: 928

    Pulled the trigger guys will be merging with this company starting with snow this winter. We have some big plans and goals for the next three years and I'm excited to get it rolling. Wish me luck thanks for the advice.
  10. Swampy

    Swampy LawnSite Bronze Member
    Messages: 1,435

    That's some good advice for when I get back stateside.

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