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  1. #61
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    Quote Originally Posted by Clive603 View Post
    Fergedditt.

    However well it goes you will be cutting down on your access to outside customers.

    Clive
    Never thought about that. A guy could fizzle right out of relevance if he hid in the shadows long enough, eh.

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  3. #62
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    Quote Originally Posted by Mud View Post
    I considered a partnership long ago. One good bit of advice I got was to acquire a second to die life insurance policy on both of us, and have the company pay the premiums. That would pay whoever survived the other enough money to buy out the business interests of the deceased partner's heirs. I've heard horror stories of wives and children of partners mucking up the affair so that the entity had to be liquidated to satisfy them, this policy would prevent that from happening.

    Another story know of involved 2 brothers with a corporation. Both were known to be pretty shrewd guys, the whole family was. They set up the corp. so that if at any time one of the brothers wanted to buy the other out, he could do so at a figure calculated on a predetermined formula, that they both felt would be advantageous for the one being bought out. Makes sense, right? Sort of a Mexican standoff - "If you don't like the way I'm doing it, buy me out!" One day years later they were offered a deal to sell the entire business to a 3rd party, and it looked like a great deal for both of them. When things came close to completion, one brother announced he was buying the other brother's interest in the corporation at the predetermined figure which was much less than half of the 3rd party's offer. After the sale went through, this gave brother #1 about 60% more proceeds than brother #2. Brother #2 wasn't even mad, he said "If I had thought of it I would have done it too!"

    You never really know someone if you've never exchanged money with them. I learned that lesson a couple times.

    Usually, these clauses have one more step to them.
    You can make an offer to buy out the partner at any time, BUT if they decline your offer, they must buy YOU out for the same amount.

    It stops exactly these shenanigans from happening. If you make a lowball offer to buyout your partner, congratulations! You just handed them a sweet deal on your part of the company.

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  5. #63
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    Quote Originally Posted by wheelieking71 View Post
    Never thought about that. A guy could fizzle right out of relevance if he hid in the shadows long enough, eh.
    Not if you run the shop. Salesman can't make any money if you don't back him up with good parts. If you hold solid control over the means of production you are at the advantage, eh, comrade?

    It has worked this way for 43 years and counting at our company. Sales-oriented owner goes out, parties, drums up business, etc. and lives it up overall. Back at the ranch, we make sure good product goes out the door. If heads ever butt, it's never a pissing match, my old man is the one with the final word.

    If your prospective business partner is OK with giving you that kind of control over the shop side and is willing to focus heavily on the sales and marketing side, it could work great. If he says that and doesn't mean it or doesn't realize what the implications are, there could still be quite a bit of friction.

  6. #64
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    Quote Originally Posted by BoxcarPete View Post
    Not if you run the shop. Salesman can't make any money if you don't back him up with good parts. If you hold solid control over the means of production you are at the advantage, eh, comrade?

    It has worked this way for 43 years and counting at our company. Sales-oriented owner goes out, parties, drums up business, etc. and lives it up overall. Back at the ranch, we make sure good product goes out the door. If heads ever butt, it's never a pissing match, my old man is the one with the final word.

    If your prospective business partner is OK with giving you that kind of control over the shop side and is willing to focus heavily on the sales and marketing side, it could work great. If he says that and doesn't mean it or doesn't realize what the implications are, there could still be quite a bit of friction.

    ... and I will completely dissagree with him on this.

    It has werked well for their company for 43 years, b/c apparently in 43 years, no-one has upset the apple cart.

    I have seen it where the shop does not have room for expansion, and decides to stick to the status quo for now, only to have the salesman find a new shop that could take all of his work, and he left.

    The sales force is the face of your business.
    If this is not you, then you are at risk.


    In this case - the salesman was not a part owner, but rather a hired entity.


    ---------------

    Think Snow Eh!
    Ox

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  8. #65
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    Quote Originally Posted by ManualEd View Post
    Usually, these clauses have one more step to them.
    You can make an offer to buy out the partner at any time, BUT if they decline your offer, they must buy YOU out for the same amount.

    It stops exactly these shenanigans from happening. If you make a lowball offer to buyout your partner, congratulations! You just handed them a sweet deal on your part of the company.
    Funny enough, in our brief conversation, my buddy pretty much said EXACTLY this! ^^^^^^^^

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    Quote Originally Posted by wheelieking71 View Post
    Like I said, nobody needs to talk me out of this! LOL. But, has anybody seen anything like this actually work? (I haven't)
    IF, repeat IF.. it can work as a partnership? It can work as a JV or a New Corp, each party part owner of NEWCO.

    The BIGGEST problem with a "partnership" is really the legal form. Or I should say the LACK of one.

    Run it by a Lawster. What happens to a partnership yah happen to fall-out? Or one party gets sick? Or even dies?

    No Fine WAY!

    JV's, fine. Corps, surely. Same folks involved it works or not.

    But at least yah still know whom owns and whom owes if the Widows have to take over.

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    I can't imagine anyone signing that!

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    Quote Originally Posted by BoxcarPete View Post
    Not if you run the shop. Salesman can't make any money if you don't back him up with good parts. If you hold solid control over the means of production you are at the advantage, eh, comrade?
    Are you outta yer TREE?

    Sales force that is any GOOD owns the customer. Makers of "stuff" are all over the globe.

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    Quote Originally Posted by Mike1974 View Post
    I can't imagine anyone signing that!
    Sorry, on my one, directed at manualed. So partner 1 offers exactly half, partner 2 says no and buys partner 1 for half and cuts him or if the business. What is business just picked up? Partner 2 ends up making a killing in the long run . Seems shady to me. What is one partner has a lead on new work? I dunno just don't sound right to force someone like that. .

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    Quote Originally Posted by wheelieking71 View Post
    Never thought about that. A guy ^^^ assuredly WILL ^^^^ fizzle right out of relevance if he hid in the shadows long enough, eh.
    Fixed that for yah.

    Peter Drucker. "The Practice of Management"

    NOTHING HAPPENS UNTIL SOMEBODY SELLS SOMETHING

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    And no money is made until something is delivered and collected on.

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    Quote Originally Posted by Mud View Post
    And no money is made until something is delivered and collected on.
    That SHOULD be true in a fair world, yes. Too often, it isn't. Fair. Nor true.

    Far more scoundrels have gotten rich selling vapour than making real goods.

    Microsoft. Oracle.

    All the R&D to patch up vapourware shite paid for by customers whilst the hard sell convinced them to stay with it ... and buy yet-another security product, security patch, then full upgrade. Fleece, update, repeat.

    All these years later, still a POS, still the same game, and Gates still a very rich man.

    Same deal Oracle and Larry Ellison. Industry joke "version Hell" Oracle was in perpetual "Beta"!!! Never quite yet fixed nor ever quite yet ready for prime-time as a 'gold' release! Fleece, update, repeat.

    Hardware & Consumer goods? Surely we have ALL seen lesser goods drive better goods out of reach or out of bizness? "Brand name" game. STORE NAME game, even.

    Kenmore factory was where? South Bend factory still in Indiana?

    Sales critters drive that bus. Not "makers of".

    And they are whores.

    Speaking of which... that biz?

    It ain't them with the p**sy as gets rich is it?

    It's always the pimps and the Mama Sans.

    "Or so the grownups whisper..."

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    Couple of Dutchmen were partners in a house moving business....these guys could work ...would have killed me ....anyhoo ,all cash jobs ,often buy cheap land ,move free house onto it,zero planning approvals ,sell house and land for cash .Very lucrative,both rolling in money......Had an argument over who had used a tank of fuel in the truck.....escalated up to each ratting the other out to the Taxation....no jail in those days ,but Tax took everything off both .And they were no longer young.......But ,still typical Dutchmen.

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    Quote Originally Posted by john.k View Post
    Couple of Dutchmen were partners in a house moving business....these guys could work ...would have killed me ....anyhoo ,all cash jobs ,often buy cheap land ,move free house onto it,zero planning approvals ,sell house and land for cash .Very lucrative,both rolling in money......Had an argument over who had used a tank of fuel in the truck.....escalated up to each ratting the other out to the Taxation....no jail in those days ,but Tax took everything off both .And they were no longer young.......But ,still typical Dutchmen.
    A "body corporate" to be held as a JV..or"whatever" does NOT make human issues vanish. It DOES make it easier for outside expertise to help sort out. If only because it has to have accounts. And they must pass audits.

    I recall one of the (many) times I was green-lighted to "just buy" a company my next-highers thought might be a fit. My call.

    Crawford, Texas. Made the offer of a Friday. Two million. 1970 USD.

    Owners were around 50-55. Only child a grown son had done 2 years of college, whip-smart, IBM, had grabbed him. IBM will pay for the rest of his education. No interest in the bizness anyway.

    They were up for it! But asked for the weekend plus a bizness day to sort it with their bank & accountant. Tuesday was agreed.

    I flew off for an "opportunity" holiday in Monterrey, Mexico, rather than do a R/T to Pittsbugh or hang-out in .. well. 1970. Crawford, TX? What would YOU do?



    Tuesday meeting. Pained looks:

    "Sorry, Bill. Neither we, nor the Accountant have been able to figure out WHAT IT IS WE EVEN OWN!"


    And I mean.. including their family CAR and even their RESIDENCE ... as well as the shop!

    THIS. can apply to LOTS.... of sole-proprietor biznesses!!!

    Husband AND Wife had built that one. Both were SHARP folks. That is why we wanted them. But they had built it from nothing, done whatever they needed to do, never had any NEED for a lot of paperwork, given they were a couple, and a solid one at that, too.

    I had been doing M&A for less than two years. I knew THEN what I knew even a year later?

    All we need to "own" was their good name and a year or several year labour contact for the founders to see it safely to a NEW Manager as a going concern.

    And we need not have CARED if a bit of test gear was theirs or "ours".

    Just cover the CAPEX for new and carry on.

    M&A got dead-easy. For me. There at Esterline, the next go - divesting Titmus Optical was my call ... and later

    I figure those two had to sort their patch out on their own!

    TAX MAN issues, probably.

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    Quote Originally Posted by thermite View Post
    Are you outta yer TREE?

    Sales force that is any GOOD owns the customer. Makers of "stuff" are all over the globe.
    Consider me corrected. Salesman at our place are incredibly loyal, if only for the reason that if they left our favorable commission terms behind, taking all of their customers someplace else and finding their pockets barely more than half full would do them no good, so they stay and they sell.

    I figured having ownership stake would be even more reason to keep that particular train on its tracks, but I suppose we are damned lucky that nobody has tried to upset the apple cart so far. Just doesn't seem like the rational thing to do, but when can we ever count on people to be rational?

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    Quote Originally Posted by BoxcarPete View Post
    Consider me corrected. Salesman at our place are incredibly loyal,
    Made serious advancement to our fortunes, and my own - I LIKE stock options - at BUILDING a force just like that. 1986-1994.

    They are no longer common, if even they EVER were. Loyalty degraded company side? Payback is a Mother Churner.

    Look up David Arthur Stumm as an author on the subject. My next higher, '70 -'74.

    Mentors. "Vulcan mind tap" approach!

    Never let anyone yah can learn from escape untapped!



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