I will start with LUCKIEST's post as I believe it to be the most important. I would not start with his lawyer and accountant until you have been through things thoroughly with your dad. They may not know what his feelings are. They might interject their own two cents and not be clear about whose opinions they are expressing.
If your dad does go for it, GET YOUR OWN ACCOUNTANT AND LAWYER at least for the transaction. Even if you only use them for the transaction and you continue to use your dad's guys/gals for the ongoing work, it will serve you and your father better in the long run to have independent advice. His advisors cannot fully serve both sides adequately. I would use people outside their firms too. If you are in a small town with limited options, get someone from the next town/county etc.
I am not being condescending, but family buyouts can be the most complicated because of the personal relationships and issues going back a lifetime. There are a lot of hard questions to be asked. There is a lot of room for feelings to be hurt.
What is your working relationship? Does he take you seriously now and/or will he in the future? If he doesn't now, can you right that ship with him? Family members can have a long memory. If you were a party hard screw up as a youth, but now have become a top notch professional, start laying the groundwork. He may not see it on his own.
Is he still with your mother? Either way is there another voice in the picture? What will that voice be telling him? I am not suggesting to use that person to manipulate him, but take into account what he will be hearing. In fact, don't enlist that person as an ally. It will more likely bite you in the end than help.
Is there anyone else in the business that has been around a long time that he trusts and might have a similar agenda? Does he have a old pal with another existing business that might be working a buy out?
Do you think he shares your view of how significantly you contribute to the success of the business?
Does he treat you more like "Oh, Junior works with the old man" or is it more like "Oh, Junior helped me make this place what it is today. I can't wait until he can take the reigns from me."?
Do you have siblings? Do they work in the business?
How is your father's health? How is your health? If he offers you the seller financing, life insurance can be purchased to cover the balance due to the estate in the event of either of your deaths.
If he is not likely to have health insurance post retirement. As a sweetener, you can offer to help him maintain his coverage where an outside party may or may not do that.
Does he just want to cash out and be done? Or do you think he will seriously consider some seller financing?
Can you and the business afford to pay him what he can get on the open market for the business?
You will carry both of your livelihoods on your shoulders with this business. If the proverbial you know what hits the fan and the industry and more specifically your business tank, how will you support your family and your father?
There are a bazillion ways to structure a deal from a financial and tax aspect, but you have to get past a whole lot before that even matters.
Feel free to email me if you have specific issues that you don't want to post. mlaird [at] bankcardcpa.com Replace [at] with @.
Best of luck.
Mike
