Should I sell my business? Opinions wanted

[Rawr]

Here is a simple/unorthodox solution you could try - flip a coin. Post what happened and I will tell you what to do next.

 

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[Wolfgang5150]

Someone previously asked why not sell it and start the business over again. Isn't it a normal practice to have a non-compete clause in a selling contract? Just curious.

Kevin

 

[Diane Kennedy]

Someone previously asked why not sell it and start the business over again. Isn't it a normal practice to have a non-compete clause in a selling contract? Just curious.

Kevin

I am NOT a lawyer, just have some practical experience in this. The non competes I've seen have a geographic limitation, but don't stop you from doing the same business outside the boundary. I was told (again not sure if it's true) that a non compete couldn't stop someone from making a living forever or be completely restrictive.

 

[EasyMoney_in_NC]

They don't hold up either (from what I know) if they cause duress. If I needed to work in the industry, I'd have a leg to possibly stand on. 'Course the question would most likely come up as to why I sold if I needed to be in it.
With these guys looking to buy mine,I could see buying it back once they destroy it
But I won't tell them that

 

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[phlgirl]

Just a few thoughts/comments - not necessarily specific to your decision, Easy, but to the discussion overall…..

While I agree it can be, at times, very important to be passionate about your business – particularly if you are working IN your business and aiming for growth – I think it should be noted that it is not always critical to be passionate about every business you own. If your passion is building wealth, you need not necessarily be passionate about the trade/activities of the business itself but merely passionate about business in general.

A mentor/friend of mine made this point a few years back and caused me to re-think a lot of what I had already decided in my head. There are plenty of successful people who buy businesses, somewhat regardless of their activities but based on their potential for growth, ease of manageability, etc. For example, there are people who buy multiples of small businesses, which have very few moving parts – such as car washes, dry cleaning, gas stations, etc. While the owners of these businesses might not necessarily be passionate about gas, washing cars or cleaning clothes, many of them do extremely well because they have effectively mastered the art of management/business. I know of at least 2 people who act in this manner – they each have net worth in the 10’s of millions and spend very little time IN their business. We are talking less than 10 hours, weekly. On a much larger scale, think about Warren Buffet – he probably buys a few businesses each week. I sincerely doubt that he is passionate about each of them.

As for the discussion regarding replacement management or partnering with someone, who would oversee operations, I must, respectfully, disagree that this is not possible and/or does not ever work. Although I have not done it myself, I have seen that it can and does work. Are there challenges? Of course. However; I think it must be just like anything else where it is just a matter of honing new skills – specifically, hiring, interviewing and management. There are ways of structuring deals, such that there are incentives, which encourage the right type of person to perform & execute well.

I believe, like any skill, it must be learned – similar to investing in RE, trading, etc., there must be a whole separate slew of books on the topics of effective management & deal structuring. Whether or not it is something you choose to be involved with is a whole separate story. The bottom line is that it must be cost effective. Like anything, I am sure there are exceptions; however, once mastered, I think that a hands-off management ability is most certainly a fastlane skill.

Just wanted to flip the coin and look at the other side.

 

[EasyMoney_in_NC]

No I appreciate your comments and do agree with you. In beginning to review the financials of the company with Pops, I am keeping an open mind to riding it out and not selling. He has always been able to predict what will come of each upcoming year based on the current year's activity. So what I need to see is what would a down turn do to the bottom line and what's the worst case scenario? Can I deal with reduced numbers? Can I have someone in a management role to allow me time to pursue other things if there's a down turn.
Not that to much time has passed, but I hadn't heard from my prospective buyer so far this week. May not mean anything, so in the mean time, I am trying to gain a better understanding of the big picture. This way I'll be better informed so I'll have a better grasp on whether or not to follow Pops and sell or work a buy out deal with him.
I have e friend who I have courted in the past, who I think would be ideal for a management role in my company. He has great interest, just has had a hard time with the thought of leaving a big pay check for an unknown outcome with me. His situation may be changing (I found out today), so maybe fate is working my way and we can work out a deal in the near future. Its a long shot, but still possible. We'll see......like I said, I think I'm just going to let things ride and see what comes.

Thanks for your comments, everyones have been a big help.

 

[Runum]

Perhaps you have told us and I missed it. What did you ultimately do?

 

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[EasyMoney_in_NC]

Well...........

We kept it. Short term.....wish it had been sold. Long term, probably going to pay in spades. We are aligning (we hope) with a large company here in town and hope between what we do (on a regular basis) and what they bring to us (in new business) we all (us and them) hope to own the town on the new construction side as well as (for us) on the end user side. This will be a simple matter of owning by attrition! Its not a business that I have any real interest in (I bought it to give my father something to do, I never intended for it to get to where it is), but thus far, its a simple, almost self sustaining business. And, we have a kid (22 years old) who, although thinks he has a goal in mind, it just lazy enough not to go for it while still running the place for us (day to day mundane tasks) and working for under market money. I suppose I couldn't ask for much more considering the crappy economy. Gives me time to do anything else (during the summer) while still keeping an eye on him from time to time. Between myself and Father, we usually have the money end pretty much covered so..........

Thanks for asking