Would like to get any feedback on my situation. Any information would be appreciated.
2 years ago retail store i was working for went out of business. I was owed a lot of money by the owner and since he was unable to pay me back we agreed that i would take whatever was left in his stores as a compensation for money owed. I was happy with that agreement since i was going to open a store of my own and i needed equipment, hardware and some inventory to get up and running. At that point ex co-worker of mine offered to be a 50/50 partner in the business, to which i agreed. I would do management and sales and he would do services and maintenance. My thinking at the time was that since our business is seasonal, on some months sales will be much larger that services and some months other way around.
Recently, me and my business partner been having a lot of arguments and generic problems on how business is running and what should be done about it. I'm at the point where i no longer want to argue and feel like buying out his half of business would be the best idea. Unfortunately when we started no partnership agreement was created (stupid on my part) and this is why things are getting complicated. I offered him a buyout price that i thought was fair. That offer was based on all the hard assets that company currently has plus original cash investments (security deposits and such) and split in to half. I did not count equipment and inventory that I originally brought to the business, since that was my personal goods. On a side note, I’ll be honest the business is not doing all that great, currently we are breaking even.
My partner refuses to accept that offer, justifying it by saying that all the time he put in to helping setting up the store is worth something also and that business value is calculated differently anyways.
1. How do you calculate value of business.
I will be meeting with lawyer next week to discuss this further, but was wondering if anyone can suggest what my next step should be.
Thanks in advance,