To Sell Out or not?

[David Iannone]

On Friday I was asked by the biggest sign company in my small town if I would be interested in selling my business to them and working for them full time and running the vinyl and CNC routing side of thier business.

They do all the big stuff with bucket trucks, to the quick easy vinyl, down to embroidery and tee shirts.

I said "thank you" I am not against the idea, I need to think about it.

I work alone now a days every day in my shop, and I do ok. But I am not part of a creative environment anymore.

They have designers already. I have to do no design. Just run equipment and make signs, wrap vehicles etc with help. I would run one Hugh portion of their business after the transaction. And help the company grow because I bring a lot to the table in the Sign Industry. I started in this industry when I was 15. I am about to turn 40. Maybe that's what has me buggin out?....LOL

My question to anyone out there is this:
Is there anyone willing to share a story where they sold out and went to work for a larger company? Did you end up feeling short changed?

I have had my own sign shop since 1999. Prior to that I worked for a Fastsigns Franchise from age 15. I know the dollar amount is going make a difference in the decision. But mostly I am wondering if not being my own boss any more will be good or if I will regret it.

Dave

[MogulTx]

David,

I have been asked by a large company. I have not done it. I would be interested in doing it IF the $ was right. One thing that my banker pointed out to me: I am making $. Pretty good money. If I were to sell out, I would then need to invest that $ so that it would earn a similar amount. Think about that. If you were to sell, could you put that money with an investment idea and make as much extra money toward your eventual retirement? Would you gain some other good benefits? Like better income, cheap insurance, less stress.... better potential earnings opportunities...? If so, and their offer is GOOD... the answer might be that you should do it... You sound like you are at least "open" to the idea.

Only you can answer whether it is the right transaction and you need to think through the full transaction and fairly consider the benefits and potential pitfalls. Once you are informed, you will probably understand what you want to do.... Don't rush. Don't leave yourself open to being abused. Make sure you WILL be paid. Expect that they may keep you on for a significant period of time.... but that they could dump you, also.... be cautious. Make a solid decision and don't look back!

Best of Luck to you. I hope it is a simple, clear, pain free decision for you.

Monty

[MogulTx]

BTW: After I was asked, the potential purchaser never followed through, HOWEVER, it provided me the opportunity to consider the scenario. I established what I might want. I figured out what I would want to do if they bought me out. I made some guesses as to how long they would keep me on staff. I'd have been interested in being sold, if the type transaction I was envisioning had come to be- so what it did for me was to make me more aware of what I might need in the event of a sale. Maybe you will get at least a little of that type of benefit from the discussion ( if nothing more than that...)

[myxpykalix]

I can't talk to your specifics but i can tell you this....

I have never worked, in my entire life for anyone other then myself. I don't know what it means to "take orders" from someone else. A few of the things i'd be concerned with is how the deal is structured with any kind of "non compete clause" if things go south...

Plus once you sell your "tools" it will be real hard to re-establish yourself. Ask yourself....What do you make a year now on your own?
What will you make working for them?
How much will you be paid for your tools?
How much will you be paid for your "good will"?
Most people who go into a salaried position for a 40 hour work week, wind up over time being required to do 50-60 hours and so now that sweet deal you thought you had is turning a bit sour.

Then if they hire someone to learn what you know, and you teach them, you're out of a job, and no tools.

What kind of guarantee of employment would you get?

If it was me, i'd think of some type of structured agreement where you retain possession of your equipment, keep it at your shop and have some type of non compete clause with them where you, while employed with them will not do work for anyone else but you are paid more then you would make on your own....

OR you could lease them your equipment, move it to their shop, while you are employed have an agreement that no one else could be hired to do the same work you do with the CNC.

So if things don't work out, you can take your tools and go and do your own business again. Don't make any agreement where you could lose your tools and your job and get screwed with some type of noncompete clause.

[bobmoore]

David, I have been involved directly or indirectly with many small company buyouts. The vast majority of these, where the original owner was brought into the management team, did not work for more than a year or maybe 2. I have read some of your business plan in the past and you run a very efficient shop. If this company can't or won't pay your price as a vendor, I don't think they will pay you a handsome wage to make their parts for them as an employee for very long. Also written agreements are pretty much worthless if things aren't working out between you and your new boss. How will you react if your 30 year old supervisor, who never printed a sign in his life tells you, you are doing it all wrong and you are too slow. I don't mean to be a wet blanket to you new opportunity. I am just telling it how I see it from my own personal prospective. Your experience may be entirely different. Bob

[coryatjohn]

I can only offer you my opinion on another level. I've been independent for over 35 years. I've been offered fantastic positions at world leading companies with amazing and flexible schedules, pay and benefits. I've always said "Thanks, but no thanks." Being independent is far better for many reasons, the most important of which is peace of mind and freedom to do as I please. The moment you agree to such a thing, you've switched from an independent to a dependent. Someone could walk into your office one day and say you have to do something you wouldn't normally do, nor want to and you'd have to do it. They will too. It's inevitable.

So you have to decide if a bit of short term financial security is worth a lifetime of humiliation and turmoil. Are you comfortable now financially? Do you feel your life is going in the right direction? If those two things are "yes" then you have your answer. Be polite, don't burn your bridges but do what you must.

[Brady Watson]

How do you want to feel each day?

Will doing this make you happier or more fulfilled?

Is being a subordinate more appealing than being the king?

-B

[jerry_stanek]

Brady beat me to it you have to ask yourself are you happy. I did this and would never do it again. I used to look forward to working now I just go to work. Remember the reason they call it work.

[barrowj]

David,

As it has been said, most of us have experienced this at one time or another. I sold one business 10 years ago for a good sum and then went to work in the IT field where I still have. I kept my equipment so that wasn't in the deal and I was happy till now. I am waiting for the company to retire me (I will work making a great sum of money until they dump me, it's an easy work from home position). I can't wait for this to happen so I can spend more time in my shop.

I guess it all depends if you are getting a good deal on your equipment so if things don't work out and you structure the contract (I hope you be sure to get one) so you can go back into business that you can afford to purchase new equipment to start up again. It wouldn't be a good contract for them to buy you out and not have a no-compete clause but be wary, only you can decide if the price is right and the benefits are too good to pass up but at least get a work contract for a specific number of years or a buyout if they dump you too soon after you sign the deal.

As other have said, I've seen it happen too many times. They buy you out then let you go after a year or 2 or you just can't take being told what to do by someone that doesn't know the business. On the other hand you may be very happy there and the new business relationship is a great one!!

Joe

[bleeth]

9 years ago I closed my shop and went to work for a large cabinet company and was quickly put in charge of all project management, installation, and the custom shop. I enjoyed the work, payscale, and benefits and although I was putting in many hours a week felt much more gratified mentally then fighting the daily details of running a small shop. The job lasted a year until the Chief Operating Officer job (which I turned down) was given to a guy who was in over his head. I had sold them all my equipment except the cnc, which I "leased" to them. When the end came as he started firing all those around him to cover his own inadequacies I ended up back in my own business again! The company was an old established outfit with a great reputation and ended up closing it's doors. You never know going in what the future will bring. In general though, people who go through most of their lives as self employed don't succeed long term as employees. And every rule has exceptions.