To Sell Out or not?

[willnewton]

I spent the morning thinking about this. I have also been self employed for a long time and have often wondered what it would take to give that up.

Let's take the business aspect and tools out of the equation. Would you quit your business to go to work for this company as a machine operator? Because a week after you start, that is all you will be. Been there, done that.

Furthermore, you may be resented by other employees, as you were paid "extra" to come to work or will be paid more than them. They will certainly not care about your past experience or skill level.

If they can't see your value as a contractor and have the opinion they will be saving money by buying you out and making you a wage slave, how does that benefit you? By providing you with a pay hit, losing your equipment and business and gaining a boss? WRONG!

I can promise you that it won't work out in the end. You will be unsatisfied with having to change your work ethic to meet theirs. They will regard you as an overpaid employee and after a while their "designers" will suddenly become CAD/CNC designers and you will gladly be let go so they can hire a cheaper employee to load the machines.

If your business was failing or you had personal/health issues that required you to get a "real" job, then go for it. Otherwise, all I see are reasons for them to hire you and no reasons for you to leave your current situation.

I would proceed to use this chance to become a trusted contractor for them. Sit down and explain to them the costs in maintenance and upkeep and training. Show them how dealing out a huge lump sum hurts their bottom line vs. having an entire CNC production shop at their disposal only when they have the need to pay for it. Dealing out a $100k to solve a $300 problem is just ludicrous!

You see, they have it all wrong and it is up to you to set them straight. Help them see the true value of the business, not the person.

[David Iannone]

It sure has been a long weekend for me. But we spent every day on the lake, and the future is all that was on my mind.

Thank you to everyone for your input.

Yeah this is my largest local "wholesale" customer. I do all their CNC cutting and all their Digital Printing, Lamination.
They currently only run a vinyl cutter for the "vinyl" side of the business.

I have been doing business with them since Jan of 2012. My wife and I go out to dinner with the owner and his wife a few times a year. Its been a great working relationship so far.

Financially we are ok. My wife is a RN and back in school furthering her education. Its just the solitude the last few years that has made me really think this might be good for me. I don't have any real solid plans to grow my business in the next 20 years.

75% of it comes down to money on the table, the other 25% is how much longer will you be in business to pay me my salary (I plan on being there for the next 15 years)?

TRUST ME....I don't want a percent of his business, I don't want to take payments.....there are banks out there that will lend the money. No all cash up front no deal.
As for my yearly income needs, I already know what I am worth as an "employee".

I just am still having trouble letting go of the thought of being a subordinate or being the king?.....LOL Thanks Brady but even if I sell out I will still maintain the king status!

Dave

[Davo]

Why can't he just feed you non-stop work instead?

Does he want to get you cheaper via paying an hourly rate?

Would there be a no compete clause once this deal goes through?

[David Iannone]

Why can't he just feed you non-stop work instead?

Does he want to get you cheaper via paying an hourly rate?

Would there be a no compete clause once this deal goes through?

This is a good point and also one of my ideas to still increase my business, while still helping him out.

Here is the thing. If he was to send me 100% of his banners, coroplast signs, magnetic signs.....easy stuff I could make them at wholesale for him and I still make good money working alone. He then turns around and adds his markup and he "should" still do extremely well. Better than him putting his own labor on it because he is making vinyl signs the slow way now a days.

If I was to go in house I would do all the above, plus take over all vehicle graphics, all finished dimensional signs including painting. I would not have to paint much, if at all. He has a fulltime painter and paint booth. Just have to make sure we stay on schedule with things and jump in when needed. Same with vehicle lettering jobs. As far as outside installs I want nothing to do with them, although I would give my input as needed as to how I think something should be done if it is in my comfort zone of knowledge. Currently he is doing all that and he wants to get out and sell every day and get away from the manual labor.

Here is where the water gets a little muddy. As some may know I had a very bad fall off a ladder in 2009, and just in the last year and a half have really got back to moving around good enough to start to try to focus on building the business and upgrading my equipment. So I am at the point now where I am ready to try to get local accounts like customers with fleets of service vehicles (for example) We will start to cross paths, and at that point I don't know how he will react. Believe it or not its never been a problem to date since through my recovery I went into the internet wholesale sign approach since I was not able to be at my shop too much. And when I was I was doing everything from a wheelchair. He knows this and I actually told him a few weeks ago I was about to start going out and "knocking on doors" looking for key accounts, but didn't want to step on his toes. I consider him a friend, as much as I do a good customer.

So, yes he is probably thinking he can get me cheap, but that won't happen. I have made it clear to him its not about the money, but about growth. All my friends and family I have talked to this about say I would be foolish to make a move. I am in no hurry, and it is more likely he will not want to meet my salary and business price. But like some have said so far in this post, it is an exercise in putting on paper what I think I am worth at the moment.

When I split the business with my Dad in 2006, we split the equipment evenly, and sold off some of the stuff neither of us cared to keep. We had a Signs Now Franchise in DE who we worked with to buy our customer base only. Everything looked like a slam dunk. We reached a number all could agree upon. I was going to work with them for a few months before I moved to GA to make the customers feel comfortable. Well, right at the end he said "actually I can only give you half what we agreed on" Well, no deal and I moved and my Dad just kept the customer base. My Dad has a sheet metal business so he really didn't care to keep anything to do with signs. But the funny thing is the first year I was gone my Dad did more Gross with signs than the last offer on the table from Signs Now. He doesn't advertise because he doesn't even need the sign work. And he sends me print jobs and CNC cut stuff often that I ship to him, so we are better off in the end now not selling to the guy, even had we got the full price.

I am at least happy to be able to consider something like this again, but like some have said, in this deal I would be giving up all my equipment. Although I like the idea from Dave R. how he leased his CNC and then got it back. Something like that could work.

I will let him bring it up again. And my first approach will most likely see if we can even agree on what my salary as his employee would be. It is very possible we may not get past there. But I am going to be honest with myself and with him. At least if we do not reach an agreement and I move on to building more local retail customers he should understand, especially when I can add a helper next year, then its game on. I plan on being in my industry for the next 20-25 years. I ain't going anywhere. Although I am trying to add more CNC work to the Bot, which may or may not be sign based, that is as far as I will stray away from being a sign guy.

Oh, as for a non compete, If he wanted one I would not sign it. The jobs they send me half the time they forward the logo or files from their customers. I have not or would not EVER use any of that contact information because that is just not how I got to where I am. So If he doesn't trust me by now then this would also be a good thing to find out. However, I would defiantly have to have a lawyer involved in the contract, cause I am not good with fine print.

Dave

[coryatjohn]

Perhaps your suitor smells competition ahead. It may be he has knowledge of something coming down the pike and wants to "button you up" so to speak before he loses you to his competition. It also might be that he wants to contain his costs, rule the roost or just have a sure thing instead of something that may slip through his fingers.

If it was me, I'd be suspicious of his true intentions. Rarely do companies make offers like this for your good. It's for their good. If you manage to eek out a gain from a buyout, it's basically good providence and not part of the plan.

As for those darn ladders, I had a nice fall off of one about 15 years ago and I'm still smarting from it all these years later. I bought a $1000 contractor grade scaffold a while back so whenever I need to get up high, I use that. It's a lot more difficult to set up but I feel totally secure standing on a 5x7 solid surface.

[David Iannone]

Well, there has been brief conversations back and forth about more of some logistics. I am not going to make the move.

He said he didn't think he could come up with the lump sum to buy me out. So I would definatley be scared about getting my salary each week (we never even got that far as to speak about my salary). I think maybe he saw that I have been slow lately and maybe thought I was easy pickens. Not even close.

The last thing he offered is to clear enough Sq/ft in one of his lower buildings and temp control it and partition walls so I could move all my equipment to his location and he become my landlord. We each keep our own companies. He would send me ALL of his easy quick sign stuff. We esablish pricing. But this gives me no room to grow, and he could do that right now anyway if he was serious about it. And talk about potential customers being confused when they come to 2 sign shops in one??? LMAO.....Also I am paying $950 a month for 1600 sq/ft currently and the utilities are built in so I dought he could match that deal. It seemed exciting at first glance, but I need to get off my *** and get out and sell. Nothing is easy.

Sooo, I am planing to get out this week and start to introduce myself to every sign company withing a 50 mile radius and offer my CNC and Digital services to all Sign Shops in the area. Most of them should have Digital Printing in house, but I suspect many would not have CNC.

Also, in the mix of talking this over with my wife and daughter over the past week my daughter who is 13 now spoke up and said she wants to start to learn how to use the Flexisign software, and learn the business........That was music to my ears. I have always hoped and also dropped hints for her to want to learn some of the sign business and see if she likes it. So now I have a helper for the summer, so that solves my isolation for a few months and gives me the incentive to try to grow this thing so maybe one day she can have it. She came in with me friday and it was so fun. I just had her follow and watch every little thing I did while I just talked and explained it. Most of the computer stuff made no sense but this week starts the Flexisign software online tutorials. By the end of the summer I suspect she will be better at the software than me.

First order of business for me the first of this week is Samples, Samples, Samples. I will take one sample for every shop I visit made off the CNC for them to keep, as well as a sample board I will carry like a traveling salesmen.

Thanks again guys for all the inspiration and advice. It really did help me a lot through this bump in the road.

Dave

[jerry_stanek]

When I made samples I customized them with the name of the company that I gave it to.