buying out the family business

[danregan]

Anyone done this ?

My Uncle is ready to hang it up now, he is 65 and just discovered you cant renew your DOT card with an insulin dependency which in Massachusetts means no hoisting license as well as no CDL.
Im going to speak with our bank on the 16th of this month, and was wondering what to expect.

90% of our equipment is paid off, does that help?

Im also a Veteran, I think there may be some programs out there for Vets, but I get the runaround from my VA guy.

 

[stumpjumper83]

well, what about working for your uncle a while until such time as you have some down, and you learn what's going on. Maybe he can owner finance as well.

 

[danregan]

ive worked for him since 1994, minus three overseas deployments with the Military

 

[rino1494]

I would sit down with a business attorney and an accountant.

 

[Hendrik]

I would sit down with a business attorney and an accountant.

Yes, you need to treat this as you would buying a business from a complete stranger.
Go through the books to see the exact state of the financials and work out what the business is worth and how much it is turning over. Then you can start talking with some real figures.
The advantage you have is that you are buying it when the economy is down, so the chances are things will get better rather than worse.
I don't know the set up you have insofar as a client base, it should be alright in this case because the clients know you but it sometimes happens that when a business changes ownership a few clients disappear because they where friends of the previous owners or such and with a new owner may not have that loyalty factor anymore.
It always pays to keep the clients in the know when a business changes hands, this makes them feel valued and gives you an opportunity to gauge how they feel about the change.

 

[stumpjumper83]

Hendrick makes a good point about keeping the customers in the know. One way to do that would be to invite the customers to a retirement party for your uncle. That keep a happy tune to the fact that the business is changing hands.

 

[danregan]

Now, let me throw this in here- while batting it around with my longtime friend, who is in a peripheral business, offered me a substantial amount of cash to come in as a silent partner. Does anyone have [red]good[/red] stories of partners? lol

 

[BarnStarFarm]

Now, let me throw this in here- while batting it around with my longtime friend, who is in a peripheral business, offered me a substantial amount of cash to come in as a silent partner. Does anyone have [red]good[/red] stories of partners? lol

Depends on how silent- get that attorney involved and make sure everyone's costs, rights and responsibilities are understood and written down up front. Handshake's good but terms in writing make for better sleeping.

 

[clansing1]

Partners

There are some good but a lot of bad partners. Think of it as a marriage. Some are great, but a lot end up in a bid fight.

 

[Hendrik]

Now, let me throw this in here- while batting it around with my longtime friend, who is in a peripheral business, offered me a substantial amount of cash to come in as a silent partner. Does anyone have [red]good[/red] stories of partners? lol

I don't understand this, you're being offered money to be a silent partner?
Usually a silent partner puts a substantial amount into a business.

 

[YELLOMTLMILITIA]

They must need his credit score or something. I'v never heard of a silent partner being offered cash it was always the other way around. although It could be Mafia deal where he takes the money and remains silent or they make him stay silent forever!! lol

 

[cgraham1]

I don't understand this, you're being offered money to be a silent partner?

I've never heard of a silent partner being offered cash. It was always the other way around.

I think he was trying to say....

My longtime friend offered me a substantial amount of cash. [He wants] to come in as a silent partner.

His friend wants to be a silent partner.

"A silent partner is an investor who provides significant capital but chooses not to become involved in the day-to-day operation of the business. A silent partner is often considered a shareholder, however, so he is entitled to claim a portion of the company's profits or suffer losses up to the amount of his or her initial investment."

I wouldn't want to share my profits from my business.... especially if I'm doing all the work. I think I'd rather get a loan, pay it back, and be done with it.:beatsme

 

[oldtanker]

Anyone done this ?

My Uncle is ready to hang it up now, he is 65 and just discovered you cant renew your DOT card with an insulin dependency which in Massachusetts means no hoisting license as well as no CDL.
Im going to speak with our bank on the 16th of this month, and was wondering what to expect.

90% of our equipment is paid off, does that help?

Im also a Veteran, I think there may be some programs out there for Vets, but I get the runaround from my VA guy.

VA dose not make business loans. You do get Vets preference from the small business administration (SMA). Check with your nearest VA regional center. They may have help with a business plan. The Fargo VA has one such service. Successful business people who are also Vets sit down with you and look at what you have, what you want to do and help you come up with a plan that you can take to a lender to include SMA.

Rick

 

[Impact]

If the business isn't going to be profitable, you need all the silent partners you can get.
If the business is profitable, you don't need any partners.

 

[andoman]

being a Veteran entitles you to some extra help from the SBA. I would carefully examine the profit and loss statements and don't make a poor decision out of love for family. I'm in the same boat with a family company. I wish you the best of luck. :usa