Business partner yearns for the golf course

[buggalugs]

50/50 shares.

He's a bit older than me and probs in a position to retire. Recent health scare. I'm not ready to retire yet.

We responded to one of those random 'we have a buyer for your business' letters and went through the motions, they gave us what I felt was an unrealistic (high) offer. But - surprise - don't have an immediate buyer.

A couple of local larger businesses have expressed interest. I don't know them personally to know if I'd want to be in business with them or not. Not got a figure out of them yet.

I was thinking, if Joe Bloggs looks at our books and decides to offer us £100 based on the risks and rewards on the table and thinks he can get his money back in 5 years. Why can't the business (or me personally) get a loan on the same terms to buy my partner out?

Been trading 6 years, couple of employees, we have cash in the bank and no debt except supplier commitments. IT MSP.

[Nicetobenice]

You could see if he will take the money "on the drip"

A big deposit and then spread the rest, maybe offering a little of the upside if you do particularly well.

[buggalugs]

Nicetobenice said:

You could see if he will take the money "on the drip"

A big deposit and then spread the rest, maybe offering a little of the upside if you do particularly well.

That's a fair suggestion cheers. I'd want the agreement water tight so he doesn't see us grow over a few years and want a bigger payday. Also I feel the original business broker guy has put a big number in his head now. I guess we can see what number the local people come up with.

[the cueball]

if you have enough cash, the company does a shares buy back.

If not, then Vimbo type agreement over 3/5 years or you personally buy his shares at an agreed price.

[Nicetobenice]

buggalugs said:

That's a fair suggestion cheers. I'd want the agreement water tight so he doesn't see us grow over a few years and want a bigger payday. Also I feel the original business broker guy has put a big number in his head now. I guess we can see what number the local people come up with.

Don't forget that, unless your partnership or shareholder agreement says otherwise then you don't have to sell if you don't want to. So that will have an influence on any valuation of his share.

[Mr_Megalomaniac]

You're welcome to send me a DM on this including the offer the other guys presented previously. I can't make any firm commitments as it's not my money but I work with a freelance agreement to a firm that has actual access to capital. They're a bit narrow on the mandate wrt subsector, etc. so I can take a look if it will fit and if so it might be of help to you.

And yes I've seen a buy out many times before; it is an option if it's in your name and all they'll do is have criteria to lend against in terms of LTV and revenue multiples, security, etc.