I'm thinking about asking my former employer to invest in me. He recently told me he is phasing out of the business within the next three years and plans to sell his business (which is way out of my price league). I can't think of a better business relationsonship I'd rather have than with the man who has taught me everything I know. I have spent the last year gathering what I can but still have a long way to go, money being the restraint. I do not plan on starting to big. I work 4 10's a week as a machinest so I have evenings and threeday weekends for treework. There are two tree services in the area, around 200 sq. mi.'s. One including my ex boss, the other mainly concentrating on commercial work. I have obtained a 12 acre commercial lot with a big pull barn, a 95 dodge 2500 4x4 V10 pickup, an 84 dodge 4x4 3500 dumpbox, a 94 jeep cherokee (not sure if it's going to be of any use, but its my everyday driver so it stays), already had climbing gear and saw, an 18 ft. 5500 lb. car trailor, and a 2500 lb. 12' by 6.5' utility trailor. So I'm left with needing a chipper, stumper, a decent sized chainsaw (maybe two) and some little things. So long story short here are some of my questions. Has anyone gone into an investment situation and if so what where some of the stipulations. I was thinking something like 7% return on a 10 year plan. With an exit clause for him after 5, if 75% of his original investment hasn't been fulfilled he gets what was purchased with it. My other qustion is how much am I looking at needing to get rolling. I figured a small chipper, bc625a or similar. At least one year of general liability. and the aforemention items. Any insight would be greatly appreciated for at most times I am lost but still holding on to the dream. And if it helps my former employer grosses around $130,000 to $180,000 a year. Which is really good for the area.
Business Plan
- Thread starter JohnnyT
- Start date
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No thoughts or opinions from anybody. I know its kinda a vague plan but I have put alot of thought into it. How did everyone here start out. My former employer said he started with an old truck, extension ladder, a trailer, and a saw than ran half the time. I've seen my share of guys fail in this are by trying to do jobs with rentals. Never seems to work though. Any advice is good advice in my opinion though.
Canyonbc
Addicted to ArboristSite
Seems way to risky to me...for your investor and you...not saying it cant be done not saying you cant do it...it could become a great thing...however its risky a lot of over head
i use rental..gets ya by...just have to be smart about things.
i use rental..gets ya by...just have to be smart about things.
Well you thats the good thing about having an investor, its not overhead. sure you have to make as much as you can, but there is no set amount you have to pay back. The investor gets a percentage of your profit. If you have a bad month, you don't have to worry about that big bank payment due. You just give less to the investor. I know its not the ideal setup but I think its a quick way to get further ahead. Just like anything it has to have pros and cons, thats why I posted to get different opinions. And thanks Canyon for commenting, a 100 views and not one reply I thought this thread was dead.
ASD
Addicted to ArboristSite
How much of the CO. is the investor going to own ??? are you getting someone to right up the deal (an attorney) ? investors are like partners it can be real good when the $$$ is flowing like water or REAL BAD when it's not
cantcutter
ArboristSite Operative
Material assets are your best bet because banks can use it as collateral..... I would not put buying your ex boss out of your mind....you get enough assets together you would be supprised what a bank can do....and business are a hard sell so often owners are forced to owner finance for a few years after the sale. I have a friend who owns a hardware store right now because out of college he started shopping for one and found a guy who really wanted to retire and financed it to him so he could build equity in it to take to the bank.... The owner knows what the business can make in a year and to have it paying him without any time put in is a great way to start out a retirement.
Canyonbc
Addicted to ArboristSite
Nice set up.
Your friend as going there...he seems to be set for life
Your friend as going there...he seems to be set for life
Terms could be negotiated. I don't like the idea of him having voting rights in the company, I'm still a sole propriertorship after all. And he knows I'm more than capable of doing the work. He told me sometime ago that he wanted $200k for his biz. (equipment, name, clients). I think even with enough colaterol thats just to much overhead to worry about.
