I've never been in the business, but I've been in lots of shops.
Does this shop only do clothing or does it also do industrial work? We make electronic equipment and we've had a continual problem finding reliable silkscreeners to do the legends on our equipment enclosures. So you might want to ask about that.
Other than that, the good shops around here stay busy and I presume they are making a good living.
#1. Do you want to go into bussiniss with this guy. One boss is always better.
#2. Get a Lawyer. I bought a second bussiniss to compliment the first. Turned out the guy was trying to screw as many people as he could on his way out of town. $500 to lawyer saved me about $10,000.
Jim, I asked him this morning and he said 'no', but if we buy it, we could persue that also.
ex70's, the beauty of this is: he DOES NOT want to be the boss, he only wants to do what he is good at which is the physical labor part that includes setting up the machines properly to do the screenprinting. It has to be very precise and accurate. He is not a 'people person' and doesnt like dealing with customers. BTW, this is a wholesale business. Not like retail where people come in all the time.
Oh, & thanks for the warning about unscrupulous folks. We both got a good feeling about him. His wife just grad. from nursing school. He is young, but has been in the screenprinting business for about 9 years, first as an employeee w/another company and then the last 5 yrs as owner/partner till his friend died. His friend did the customer service, bookkeeping, phone answering, etc.
Disclaimer - I am not a lawyer and this is not legal advice -
Here's some more things to think about. I've had a couple partnership deals, I've worked with my wife for 10 years at our own company, and I've done all the things needed to be a legitimate company, such as incorporating, health insurance for the employees, worker's comp, etc.
I assume that you've gone over the books carefully. Pay close attention to state and fed tax withholding and worker's comp. These things can get you into big trouble fast if they aren't handled correctly. It might pay hire a tax accountant to go over the books. The books (assuming they are accurate) will tell you roughly what income and expenses you will have and what payments you can afford for the business. You'll also want to call up some of the business's repeat customers and make sure that they are happy and will continue to use your services. It only takes one botched job to lose a long-time customer. Likewise, you might want to call some of the venders that sell supplies to the company and make sure that you're on good credit terms. You'll also probably want to find out if there's a big tank of dirty solvent that hasn't been disposed off properly.
As to your relationship with the present owner, rather than buying him out completely, I'd prefer a deal where he's a silent partner, at least for a year or so. If he's just an employee, he could walk the day he gets his check from you, and then you've lost a key employee and the personal link to all his customers. I'd try to work out a deal where he would be required to stay with the company for one year. Also note that in some cases, partner/owners can be exempt from worker's comp and some unemployment insurance issues. You'll need to talk to a tax accountant in your area to get the details.
Make sure you can work with the guy. There will be some friction as he's been involved with the company from the beginning and you're the rookies. To start with, you'll probably want a clear understanding of responsiblities, working hours, pay, etc, from the beginning.
Make sure you can work with your Hubby. As I've said, I've been there and done that. There *will* be very stressful times, and the key for me was being able to back off/walk away when things get too intense. On the other hand, the good times are very good. It certainly can work, but it's easier if everyone understands up-front that there will be hard times.
If you are satisfied that the books are in order, the numbers work out and it's the kind of business you want to do, sit down with the guy and write up a 1-2 page agreement. After you and the guy have a clear understanding of the rights and responsibilities of each partner, all of you should take the agreement to a lawyer and get his advise. Don't let the lawyer talk you into him writing a 20 page agreement. The only one that benefits from that is the lawyer. I've been writing my own contracts and agreements for years and only occasionally do I bother to have the lawyer review them.
Got to get to work. Hope this helps. Feel free to PT me about anything you don't want to discuss in public.
Thanks a million, Jim, for this info. I will show it to hubby when he gets home.
We have owned our own business and worked side by side for about 7 yrs. We were together 24/7 almost exclusively during that time. Working together again will not be a problem for us.
If you look at what I posted on CoolWaters thread about naming her business, you will see that we have gone thru many changes in business.
Thanks again for the many pointers, and they will be helpful when we make our decision.
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Jim
I've never been in the business, but I've been in lots of shops.
Does this shop only do clothing or does it also do industrial work? We make electronic equipment and we've had a continual problem finding reliable silkscreeners to do the legends on our equipment enclosures. So you might want to ask about that.
Other than that, the good shops around here stay busy and I presume they are making a good living.
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ex70sHouston
Two comments.
#1. Do you want to go into bussiniss with this guy. One boss is always better.
#2. Get a Lawyer. I bought a second bussiniss to compliment the first. Turned out the guy was trying to screw as many people as he could on his way out of town. $500 to lawyer saved me about $10,000.
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act2
Jim, I asked him this morning and he said 'no', but if we buy it, we could persue that also.
ex70's, the beauty of this is: he DOES NOT want to be the boss, he only wants to do what he is good at which is the physical labor part that includes setting up the machines properly to do the screenprinting. It has to be very precise and accurate. He is not a 'people person' and doesnt like dealing with customers. BTW, this is a wholesale business. Not like retail where people come in all the time.
Oh, & thanks for the warning about unscrupulous folks. We both got a good feeling about him. His wife just grad. from nursing school. He is young, but has been in the screenprinting business for about 9 years, first as an employeee w/another company and then the last 5 yrs as owner/partner till his friend died. His friend did the customer service, bookkeeping, phone answering, etc.
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Jim
Disclaimer - I am not a lawyer and this is not legal advice -
Here's some more things to think about. I've had a couple partnership deals, I've worked with my wife for 10 years at our own company, and I've done all the things needed to be a legitimate company, such as incorporating, health insurance for the employees, worker's comp, etc.
I assume that you've gone over the books carefully. Pay close attention to state and fed tax withholding and worker's comp. These things can get you into big trouble fast if they aren't handled correctly. It might pay hire a tax accountant to go over the books. The books (assuming they are accurate) will tell you roughly what income and expenses you will have and what payments you can afford for the business. You'll also want to call up some of the business's repeat customers and make sure that they are happy and will continue to use your services. It only takes one botched job to lose a long-time customer. Likewise, you might want to call some of the venders that sell supplies to the company and make sure that you're on good credit terms. You'll also probably want to find out if there's a big tank of dirty solvent that hasn't been disposed off properly.
As to your relationship with the present owner, rather than buying him out completely, I'd prefer a deal where he's a silent partner, at least for a year or so. If he's just an employee, he could walk the day he gets his check from you, and then you've lost a key employee and the personal link to all his customers. I'd try to work out a deal where he would be required to stay with the company for one year. Also note that in some cases, partner/owners can be exempt from worker's comp and some unemployment insurance issues. You'll need to talk to a tax accountant in your area to get the details.
Make sure you can work with the guy. There will be some friction as he's been involved with the company from the beginning and you're the rookies. To start with, you'll probably want a clear understanding of responsiblities, working hours, pay, etc, from the beginning.
Make sure you can work with your Hubby. As I've said, I've been there and done that. There *will* be very stressful times, and the key for me was being able to back off/walk away when things get too intense. On the other hand, the good times are very good. It certainly can work, but it's easier if everyone understands up-front that there will be hard times.
If you are satisfied that the books are in order, the numbers work out and it's the kind of business you want to do, sit down with the guy and write up a 1-2 page agreement. After you and the guy have a clear understanding of the rights and responsibilities of each partner, all of you should take the agreement to a lawyer and get his advise. Don't let the lawyer talk you into him writing a 20 page agreement. The only one that benefits from that is the lawyer. I've been writing my own contracts and agreements for years and only occasionally do I bother to have the lawyer review them.
Got to get to work. Hope this helps. Feel free to PT me about anything you don't want to discuss in public.
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act2
Thanks a million, Jim, for this info. I will show it to hubby when he gets home.
We have owned our own business and worked side by side for about 7 yrs. We were together 24/7 almost exclusively during that time. Working together again will not be a problem for us.
If you look at what I posted on CoolWaters thread about naming her business, you will see that we have gone thru many changes in business.
Thanks again for the many pointers, and they will be helpful when we make our decision.
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