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    3 Replies Latest reply on Aug 14, 2009 2:09 PM by jmac2332

    purchasing existing corp

    jmac2332 Newbie
      I am new to this forum...any help is much appreciated.
      I currently am the only employee at this corporation, the owner simply signs the checks. It is a manufacturing firm that nets about 200,000 per month, and has done so for 19 years. The owner happens to be my dad. I don't have much for collateral, maybe 200,000 and I would value the business at 5-7 million. Now would it even be possible to acquire a loan, or is there some type of financing that would better suit my situation? Also, I haven't even discussed this with my dad, and I'm not sure what the benefits may be to him or whether a joint ownership may work. Again any advice is appreciated and anything I've left out, please let me know.

      Sincerely,
      James
        • Re: purchasing existing corp
          Bridge Navigator
          A manufacturing firm that nets $200,000 profit per month with one employee? I am missing something here.

          Generational transitions can be tricky.

          1) What is your business value based on?
          2) How would that value change if you did not work in the business? (If you are the only employee, the business is potentially worth $0 without you.)
          3) I don't see a bank loan as a viable option based on the limited information provided.
          4) You could use seller financing.

          Bset of luck,
          Greg
          • Re: purchasing existing corp
            LUCKIEST Guide
            purchasing existing corp, Welcome James

            Start by talking to your father. It is called COMMUNICATIONS or Planting the Seed.
            How old is your father?? How long does he want to continue working??
            It is a great idea to tell him that you will be interested in staying with and continuing to run the business.

            After talking to Dad, Then with his approval, talk to the company Lawyer and Accountant.

            Good luck, LUCKIEST
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              • Re: purchasing existing corp
                jmac2332 Newbie

                he is 67 i am 30, he really treats the firm as though it is his baby and i do not want to seem presumptuous to him by asking him to sell me the company...and if i value the company at 10 million, five years of profits...then i dont see what would be in it for him to want to sell me the business when he could just sit back and make the same money in 11 years.

                as far as the business goes, we manufacture and i am the one who does the manufacturing, ordering, invoicing, a/p, a/r and regulatory tasks, so the business could thrive without me, but he would have to find someone he truly trusts and could depend on while he is away. plus my training is extensive.

                i guess my point is, how do i put it to him that it would be worthwhile selling the business, or do i put it as though i would like to buy a portion and then go from there? i'm sure we would set it up as a stock purchase, due to the tax benefits.

                again, thanks for all of your help, and i apologize for not including the proper information in my first post.