|By Yoshiskitchen (Yoshiskitchen) on Monday, April 01, 2002 - 09:07 pm: Edit|
I am a fairly new business owner with 18 months under my belt. Another caterer in my town wants me to take over his business and hire him as chef. He has been in business for ten years and does upscale cuisine. I am in the mid to high range. I was thinking of offering him salary plus 15% of all bookings derived under his business name, which I will keep using as well as my own. kind of a co-op plan. Two seperate businesses, one owner, split the overhead. I need any advice as to wether or not this is a good offer
|By Sam (Sam) on Tuesday, April 02, 2002 - 07:55 pm: Edit|
my question would be why??? does he want you to "buy" him out & re-hire him????that is the big question, why does he need to sell out???.....sam sears, cec
|By Yoshiskitchen (Yoshiskitchen) on Wednesday, April 03, 2002 - 08:03 am: Edit|
He is a great chef who has a dedicated following but he is the worst manager I have ever met. He uses 6-8 people for a buffet for 100. He' has refunded a whole party's payment because someone got lost with the cheese tray. He suffered a terrible illness a few years ago and is up to his eyeballs in medical debt. He needs to sell the house he runs the business out of and downsize. He has been a friend and mentor since we met at a catersource seminar a year ago. In that time he has been very forthcoming about his business and I have even helped with a few of his events. I have 13 years experience in management a believe this company could be profitable with some tough love and organization. His gross last year was about 200,000 and he still couldn't show a profit.
So what do you think about the offer?
P.s. I'm glad I found you here Sam.
|By Sam (Sam) on Wednesday, April 03, 2002 - 08:21 pm: Edit|
I have learned the hard way, and two of my family members have learned the hard way about partnerships w/ friends.....but from a purely clinical point of view, I would check out his finacials with a uninterested accountant...get a FAIR (resale) value of assets & what you could reasonably expect as a return on his current gross, based on your current rate of return, and make him an offer...I would shy away from %age of bookings from his name and outright buy the assests of the corp, rather than buying his company itself...and bring that enitity under your corp name & structure as another "dba"...and then hire him at a reasonable salary....remember you cannot afford or should you try to afford to allow emotion to come into play in a business decision &/or transaction.....hope this helps....sam sears, cec