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shifting from owner to employee ?

cross hair

Aluminum
Joined
Jan 16, 2007
Location
Ohio
Has anyone here sold your business but kept working for the new owners? That's the scenario I may have in front of me and I'm wondering what it will be like. My main concern is how I go from feeling responsible for everything to just doing my job, it's been many years since I was an employee. I'm 56 and have no desire to do another start up, besides a clause of the acquisition is I remain for one year.

Is it possible to make the adjustment yet still work in the same environment primarily having the same duties? I think I'm going to have trouble shifting out of high gear and just "do the job".

Please let me know what your experiences have been.

And before you ask why sell trust me....it's time, let someone else deal with the BS
 
As actors say, "What's your motivation?"

Do you need to make the widgets so that the next PO comes in, and then you're outta there?
So, the daily job is to clock in, run the machines, place the material and tooling orders, ship the goods and clock out.

Or do you need to train the new owner on every facet of the business side of the business, so that they are successful long enough to pay off the note that you're carrying on them, and maybe to keep your-soon-to-be-their employees gainfully employed into the future? Do you need to preserve the trust and goodwill of current customers because they might also be customers at your next endeavor? Do you think the new owners will be ongoing customers of your next business or consultancy?

Do you want to work there longer, if things go well? Does the buyer want you to?

None of these life/work changes will be instant, and you'll have to get used to them over time. But instead of stewing about "they're doing it wrong", I would take the new owner aside to lay out the events that led to your current methods of (whatever). He gets the benefit of your experience, but you need to let him decide if that's the way going forward. You'll have to hold your tongue after that, but at least you're not still stewing. But if they're paying over time, you have to do what is necessary to protect your investment.

Chip
 
Better have a written definition of your duties. If they want to run it and just need an operator, they don't need you. Sounds like they expect you to continue to run the place. Your working there should be covered by a separately negotiated contract. If the sale is contingent on your working there, what happens if you're in the hospital?
 
Has anyone here sold your business but kept working for the new owners? That's the scenario I may have in front of me and I'm wondering what it will be like. My main concern is how I go from feeling responsible for everything to just doing my job, it's been many years since I was an employee. I'm 56 and have no desire to do another start up, besides a clause of the acquisition is I remain for one year.

Is it possible to make the adjustment yet still work in the same environment primarily having the same duties? I think I'm going to have trouble shifting out of high gear and just "do the job".

Please let me know what your experiences have been.

And before you ask why sell trust me....it's time, let someone else deal with the BS

I'd have to imagine that you're there to be a consultant and trainer, not just a button pusher or head machinist. Should be fun if you are really done in 1 year and are fully paid out at that time. However, if you have to force the new owners to 'make a profit', or you get your money back, maybe not so fun.
 
You might find it much easier on yourself.
Less overhead to worry about and just the task at hand to get done.
Stepping down can be a big relief if you can let go of the what if worrying and think "I don't care if it survives or profits, just let me make parts".
How the new owners work and what they expect from you can be very different in differing cases.
I've seen super happy and super sad from those doing what you seem to be getting into.
Sometimes you just have the same job as before or worse, other times you are around for your floor tech.

One may need to get the monkey bat out. When they try to place the monkey on your back you bat it right back to them as they are now the owners and this is what they bought into.
As the old boss there is a huge temptation to let it jump on you...don't, not your job, not your worry.
Take a big ole swing and grin thinking "Yea, I used to deal with this shit...now its yours".
Bob
 
I know officially one person who has done similar to what you are considering. He seems pretty happy.

I think a huge factor is: are they buying the business turn-key? Or, are they buying you out, and absorbing the business?
Are the buyers an already existing business (possibly a customer of yours?)
Or, is it just a guy or two that want to take a stab at shop ownership?

One I would consider. The other I would run and hide from. Or at minimum have a very intense legal contract in place.

Either way, I would never carry the note. I would get paid up front, in advance. No way in hell would I consider any kind of owner financing.

Just remember, as bad as you may want out, never ever give them the upper hand.
 
it rarely works out. You think the BS is bad now, just wait until you are working for someone in "your" business. otoh they will feel challenged to do things differently than you did, want new blood and resent your 'senior' salary and subconsciously think of everything the see as being your fault. All these feeling accumulate and they tell you the fit just isn't there.

You're getting to an age where new employment can be dicey. Are you selling for enough that you never have to worry about money again? if not, think long and hard about this


Either way, I would never carry the note. I would get paid up front, in advance. No way in hell would I consider any kind of owner financing.

in my experience its almost impossible to sell a business without some sort of vendor financing. These businesses are the hole in the donut. They're usually too much for Joe Schmoe to just a write cheque for and to small for Consolidated Flange on the NSE to buy 'cuz its accretive to their earnings. You can protect; try for a secured note (will have to subordinate to the bank) and also a pledge of shares as security with pretty clear default and remedy provisions. On the buy side of course, you don't want to give up any security
 
Thanks for the comments….to answer a few questions.

I will not be carrying any financing, the business buying us is a vendor of ours who we have been dealing with for about 15 years. Their revenue is twenty times ours, I actually think the resources they will make available to the business will be beneficial long term. If I quit before the year is up the only negative would be return of a signing bonus (amount yet to be determined)

Duties? Exactly the same initially until they get a handle on things and possibly bring in some of their own people. Honestly if they took away most of my responsibilities and told me just to go make parts I would be a happy man. lol

Living conservatively I could quit working after the sale, but don't intend to. After the year if I am happy I may stay, if not I will probably leave the industry and do something different. Truthfully I have no fear of them cutting me loose in a few months, it wouldn't hurt me one bit, financially or emotionally.

I just want to be able to step back and let someone do it "their way", I'm just not sure how easy that will be for me. I'll learn though...
 
Has anyone here sold your business but kept working for the new owners? That's the scenario I may have in front of me and I'm wondering what it will be like. My main concern is how I go from feeling responsible for everything to just doing my job, it's been many years since I was an employee. I'm 56 and have no desire to do another start up, besides a clause of the acquisition is I remain for one year.

Is it possible to make the adjustment yet still work in the same environment primarily having the same duties? I think I'm going to have trouble shifting out of high gear and just "do the job".

Please let me know what your experiences have been.

And before you ask why sell trust me....it's time, let someone else deal with the BS

I sold out and went to work for someone else once in a different life many years ago....
THAT was a tough transition!
My situation was different though, I was young, and not working for "my" shop. The transition from sole proprietor, do everything myself, to general employee was quite a step for me. A less understanding employer would have fired me:ack2:
But, it worked out. Now I'm both.:D :crazy:
My thought in your situation would be much along the line of what oldwrench said. Outline EVERYTHING in writing. It will make for a smoother transition.
 
Thanks for the comments….to answer a few questions.

I will not be carrying any financing, the business buying us is a vendor of ours who we have been dealing with for about 15 years. Their revenue is twenty times ours, I actually think the resources they will make available to the business will be beneficial long term. If I quit before the year is up the only negative would be return of a signing bonus (amount yet to be determined)

Duties? Exactly the same initially until they get a handle on things and possibly bring in some of their own people. Honestly if they took away most of my responsibilities and told me just to go make parts I would be a happy man. lol

Living conservatively I could quit working after the sale, but don't intend to. After the year if I am happy I may stay, if not I will probably leave the industry and do something different. Truthfully I have no fear of them cutting me loose in a few months, it wouldn't hurt me one bit, financially or emotionally.

I just want to be able to step back and let someone do it "their way", I'm just not sure how easy that will be for me. I'll learn though...

ah, thats what you call a strategic buyer and where are all bets are off...they will always do a better deal than the market. Good for you. Get tax planning advice before agreeing to a structure.
 
Going from "big" boss to "second biggest" boss is challenging. You'll likely see things coming from the new "big" boss you wouldn't have dreamed trying when you owned it since you knew the business inside out and knew what likely would work and what likely wouldn't. After a couple go-arounds over these they might not think you're a nice person anymore.;)

I'd try to get the bonus pro rated; if you've had enough after six months you get half the bonus. That might turn into the first go-around.
 
I have been approached no fewer than 10 times in the last 5 years by other companies interested in buying my business. I went pretty far with one company before deciding that their values weren't a good match with my values which would make it hard on everyone I had hired who had helped make my business what it is.

If the right person or company came along, I would happily work another year+ and do whatever they wanted me to do with respect to helping the business and the existing employees and customers and suppliers thrive. But this would only work if the company or person acquiring my company valued the same things that I did. If there was a values mismatch - I'd probably give the company away to my employees in exchange for the retained earnings I have left in the company for the last 20 years.

I am not doing this to be rich or to retire in luxury . . . I am doing this because I like doing what I am doing and it is rewarding to put teams together that can accomplish some incredible advances in manufacturing technology whether it being designing DNA seeded molecule printing machines or 777X wing manufacturing cells. We get paid well to spend other people's money to solve complex manufacturing problems and I would be happy doing this until I breath my last.
 
I know three people that sold there companies and stayed on.

The first saw his company dissected and he was out in a year or so. He didn't really care as he was paid upfront, kinda knew they were buying for contacts and contracts.

Second guy was my customer for years. He was put into the position he did best...sales. He brought people up to speed and after his 2 years he left happily with two feet out the door...travels and dabbles in some odd ventures. Great guy, set us up with new owners as a choice vendor and we grew that relationship.

Last was a friend that sold his restaurant. He was to stay on for 6 months or so bringing owners up to speed...bad deal, was to be paid in installments. He lasted about 2 months in that position, they clashed heavily. Business went south and he never recouped his money, no business to take back. Up side is he went into another field and makes a hell of a living now.

So I guess the best answer is, it works out sometimes...other times not so much.

Good luck to you.
 
I never would of sold with the stipulation that i work for them. I would of offered a consultancy contract at a fair rate and let it at that. If they really absolutely wanted you there for 40, then it would of come with a full salary benefits and vacation policy... That's just me though.
 
I think you'll have edge since you own the business prior. The big change is if before you make decisions now you can make suggestions :)
 
A year is a short time. You're only there to keep it all from floundering during transition. So in a sense you are not a "traditional" employee. You are there to make sure what you sold retains its value for the new owner. Should not be too hard for you to be a good boy for one year unless you are all emotionally tied in there.

I don't know of any shop that doesn't have eccentricities in place as far as how they do things. Some good...some bad. So they buy a business and need the guy that created the craziness to hang around till you can sort out what is foundational and what is just redundant foolishness...lol.

The fact that they are buying and only projecting one year of your needed involvement means you were doing things right....

Congrats!
 








 
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