Forums: Discussions for entrepreneurs and small business.

 H ello my name is Annie I live in southern Az. I was recently offered a bussiness partnership with a print company , The situation is like this , The owner is soon too be leaving the country and does remain holding the major part of the stock.He tells me that in order to get my foot in the the door that I would need to purchas at least 25% of the  stock, then that would make me part owner, He figuars 150000.00 is what the company owes him . Apparently he took these funs out of his retirement and that if this is paid  back to him the comapny would be in no debt. But my question is what does something like this really put me within this comapny. I was all for this in the beginning however I still have no secruity that is in place. He okeey dokes me and still no contract that tells me that this bussiness is really part mine.. I dont have enough understanding to all the questions I know I should be asking , And not to mention The 2006 taxes are still not even done,, Can someone help me to understand what other kinds of questions I should be asking. There is alot more to this but I wont go into it , Your honesty and time is really needed with this for me. I am not rich however I will not let your time with these matters go without compensation.. Thanks

Hi Annie :-)

First, you`ll definitely want to invest some money in hiring a good accountant who can go through the books and tell you what`s what. It doesn`t really matter at all WHAT the owner thinks he`s owed, what he wants, or what he wants you to pay.

Suppose I bought some shares of Palm (Pilot), a few years ago, and used most of my retirement fund. Then I lost my shirt, the stock took a nosedive, and I want out. Does it matter what I spent? No...all that matters is what the stock is worth *today!*

So too with this business. It`s really not useful what the printing business was worth last year, or when the owner started it. What`s it worth today! And to value that, you need someone with professional skills in "valuation."

That`s a field where someone determines the actual value of a company, not what the owner wishes it`s worth. See? So interview some CPAs and tell them you`re looking for epxertise in business valuation. YOU shouldn`t be asking these questions yourself, particularly if you don`t know what to ask.

The key here is that if the CPA tells you the business is worth $65,000 you have a nice conversation point. "Hey...I`m not saying you`re wrong, but I have to go with the numbers `my accountant` tells me. What can I say?" That`s a nice negotiating stance. :-)

I would forget about it. Leaving the Country spooks

me. Use your money to start your own business.

Craig is absolutely right.  I`d also want to know if that $150K is a shareholder note payable or if it was owner invested capital which does not require repayment.   

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Travis Tschepen
Hibachi Bros. LLC

--My goal in life is to be as good of a person my dog already thinks I am.--

Colchester is dead on. Use your money to do something on your own.  You will have full control and be in charge of your future.

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Mike Michalowicz
Author of The Toilet Paper Entrepreneur

 Thank`s everyone for your thoughts and suggestions I have decided to pull out and start my own painting company.. I also believe in my gut feelings and I dont normaly second guess it. I did this time and thanks to many of you I will not go and do something that would probebly be the worst mistake in my life.. Thank you .. on to a better path........ A

Find a professional to help. I am sure you will find an accountant out there willing to help you. I think you just have to find a clear way to present the situation. Then ask them, "what would you charge me to evaluate this?" I would also suggest finding a lawyer looking to do some "pro bono" work. It wouldn`t hurt to know you`re in a good legal position.

Remember what your momma always told you, "It takes money (or investment of some sort) to make money!" That`s just the facts.


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Vincent Wilcox (a.k.a. KRAKR)
Drummer
My band: Letters Make Words