Hi intrepid! Welcome to our community. The first idea i have is to try to convince the current owners to do a seller carry back, kind of like a rent to own, where they act as the bank and you pay them back - eventually buying them out over a specified period of time. If your initial start up shows a profit, you may find securing a loan or finding an investor that is willing to back you.
Since you mentioned you are both well known in your industry, do you think this is something that he/she might be interested in considering?
We have an amazing community here and I'm sure that you will get a lot more great advice. Please be sure to stay in touch and let us know how your journey goes! Best of luck!
Yes to say the least our business is interesting. Since we are consultants there is an awful lot of name recognition and even more influence on locations of practice. I am in san Diego and he is in southern Oregon. One method I have seen used down here is when the owners start to get ready to retire. They often set up a system that works like this. The new buyers instead of taking a bonus and/or a raise allow that money to be into an account to fund a buy out of the owner down the line.
The other issue is how to value a service company.
Often times in my area the consulting company is tied to a specific person. "so n so has a great reputation call Him" so when that person leaves the industry the new owner is facing the challenge to rebuild the business using the new name. That suggests to me that in a specialized service company the value is in the person doing the consulting who has the reputation. so how do you value that?
The other issue if the owner is going to retire I suppose I could just go up there open a business and compete with him and eventually where him down, But I don't really want to things that way . i would like to start of with some good relationships.
So what do you all thing? this consulting area is engineering geology.
Hi Intrepid! What a fascinating opportunity. Have you spoken to the other business owner? Maybe it would be a good idea to meet in person and get to know each other better. A meeting may provide insights into opportunities neither of you had been able to consider. Then a meeting with a lawyer might be the next logical best step to help formulate the plan of action.
I own my own business in souther California. But lately I have been looking for a change. I am a consulting geologist and on a whim was looking at other firms in the northern California area, I mean extreme north, to southern Oregon . I happened upon a company whose owner wants to retire he is several years older than I.
Here is the gist of my questions. We are both well known in our industry in our areas. I am thinking of perhaps moving up north and taking over his business as he retires. In this business the consulting is technical but the relationships can me more personal. Your dealing with the stability of someones home. Have been doing this for 40 years and he about the same .
Unfortunately due to an ex partner have no cash reserves, no retirement savings and nothing to fall back on. I just rent here in so cal but he rent has gone through the roof, and is more expensive than when I was fortunate enough town a home.
Is the risk moving up there to big to take? His business is successful. Also how can I buy the the business with out any money? Can iWork as a w-2 employee at a lesser pay and have the excess directed into an escrow account to be used in the purchase.
What risks do you see? what benefits?
Am I missing any big points?
I open to all thoughts, points of view, positive or negative,.
At heart I am a scientist.