A 20/80 split and you control the money is another solution.
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All I can say is âWowâ!!! Iâm totally overwhelmed and grateful with all the thoughts and suggestions and all are right and true. Honestly took quite a few reads to get Thorâs suggestions and comments, yet it seemed to put everything together. (Plus blue is my fav color!)
Seems like most of you think I should try to hang on and bring him in as a partner. Yet without him I really have no business, just equipment and a customer list. Iâm tired of trying to find new workers and training. What I didnât say is that he has always wanted to start a sandwich shop with me!! But I think the bottom line is that he wants his own business so a partnership is iffy.
so from you guys help 
my options are:
Partnership: 20/80 split, partnership papers, I am office manager, andraise prices
OR
Sell: Ask what his terms are
My terms: $25,000 asking price, blue book of truck as downpayment, then 20% per month till paid off, or blue book of truck as downpayment then 20% per month for 2 yrs
OR
Partnership for 1 year, then he buys
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So do I, one guy told me heâd give me 5 grand! Yeah, thats five thousand dollars-
Just because I have a buyer donât mean I wonât get raped by selling it to him. He can make so much more money if he took about a year to make it more appealing to a different buyer.
This guy spent 20 years on this biz, if he gave it an overhaul he could sell it for a lot more than he believes.
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I believe a business trip to San Diego is called for!!
The overhaul would be entirely dependent on my employee R agreeing to a Partnership or willing to keep on going the way it has been and me raising the rates, making residential contracts and building up some commerical contracts. R returns mid-month from a long overdue vacation and thatâs when negotiating begins. You guys will definately be in the loop. Thanks again for caring!!
Absolutely ⌠but there are no guarantees that the buyer he is making it more appealing to is goin to be there one year from now though. It might be 2 years 3 years thatâs the gamble he would have to take , an weâll worth it if he has the where with all to go at it for the foreseeable future.
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@cheetah keep us updated cause its such a great read with all the different angles given here. And if it donât work out maybe Ill move down and we can see how far we can get the business along. While I love my area Iâm hating it more with every passing month. 
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I would be curious as to what the benefit would be to making him a partner when you are already paying him $40-$50hr. After payroll taxes, workers comp, equipment expenses, etc. that doesnât leave much left for you? Maybe youâre fine with that if heâs doing most of the labor. Mathematically I would think he would make less if it were a 50/50 partnership and you might end up making more. If I were in your position (not ready to retire but not able to do the manual labor), I would find a way to keep the business and keep this guy working for you. Build more clientele while he does the labor, and then when youâre in a position to retire, sell it to him.
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True
TrueâŚ
Ok, so my options are to sell or keep it going with the suggested changes??
the benifit to making him him a partner is keeping him on board a growing the company.
try to fix him up with increasing share.
so as he builds the company his share of owner ship increases.
seperate yourselves from the company so each of you gets paid for the work you do as if you were employees whatâs left is profit which you split according to your agreement.
structure the partnership so that if you die he gets your share and pays an agreed amount to your estate. and vice versa.
you NEED a GOOD lawyer who works in PARTNERSHIP law.
example
scrap the he gets 50 or 60 percent. he gets 20 an hour you get 15
each of gets10 or 20 or 30 % for new sales (not hourly) or hourly whatever you 2 are happy with.
after all costs for month are deducted there is 2000 profit which is either divided or held in company in case you guys need a draw during slow times.
the less you work the more he works the bigger is his check is.
i am going to be 61 this winter and had to atart from scratch in huge debt after a long business folded and i got screwed by another company. that guy is valuable and if he goes away you could be screwed. ut of course you canât just hand it to him you need to make it so you can still have some income and he can see a great future.
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Or how bout fire him and use that $50/hr to hire two laborers and a sales guy?
Ok Iâm sorta kiddingâŚ
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I would say you could get $50K - $60K all day long. Try posting in Craigslist and see if you get any bites.
I guess you should be asking yourself if you would still like to keep it going and if this guy is willing to do all of the labor? Show him the numbers of what it takes run a payroll at a realistic wage for him. At least it gives you the opportunity to generate some cash flow until you are positively/financially ready to retire. Remember, there are lotâs of business owners who do very little of the labor and just handle the business end of things.
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I consider Wyoming Godâs country, along with Oregon(where I used to live) and other western states, thanks for your thoughts!!
Iâm fine with him doing all the labor(with a little help from part-time people), but he thinks that I will want to do some and that will aggravate my very serious injuries that I have spent several thousand or more on just for symptom relief. And thatâs true, I will want to do some as I truly like it.
The bigger question is that he could do it all and get prob 70% profit, so why should he settle for less??
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and if you sell it for 50k thatâs it! if you find a way to stay in with value to him together build it to 100k or more youâre looking at 30k for 5 or more years.
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Cause itâs your business. You spent years building it up to this level. Youâve spent years planning, organizing, investing, marketing, and assuming all the risks. And now youâre the one with the injuries. You deserve better. Youâve taken care of your business; you deserve for it to take care of you.
I just canât fathom doing all that and then just handing it over for pennies and spending the rest of my in-pain years driving an Uber just to scrape by till the end. But, of course, Iâm a complete stranger who doesnât really know your circumstances so itâs just an opinion. No matter what you decide, I truly wish you the best outcome.
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Exactly. I canât imagine selling the business and then having to find a PT job just to make ends meet. He has to understand that. Give him a 3-5 year path to ownership that allows you to meet your financial goals by collecting the majority of the extra profit generated from the new arrangement then he gets 100% when you exit.
most business owners that are not the main active income generators any more do not get to keep huge amounts of profit as a percentage.
In general business sell from between 2.0 to 3.0 EBITDA. This is the sellerâs discretionary income. So, letâs say that last year you, as the owner, had a salary of 50,000 and the profits before taxes were 30,000. SDE is $80K. You could sale at around $160k.
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only if the owner does absolutely nothing in the business otherwise his salary must be used for someone to replace what he does.
his gross sales are only 72k
his employee gets 40-50 per hour so even if heâs generating 100 per hour that is 50%
so that leaves 36k
owner helps in the business, if he takes 25k that 11,000 profit
i assume there there is some expense for depreciation of vehicle, insurance, repairs, supplies, etc if we call that 6k that leaves profit of 5k even at 3 times that is only 15k.
no offence intended but you sound like a guy looking for a business for sale listing.
no offence to the op either but as a sale to a new investor this not a very valuable business, in my humble opinion the current employee as a part owner is the best route by far.
