Hi Everyone
I have been running a mens wholesale fashion company for over 5 years now. We are rapidly expanding and growing, and I have had 100% Ownership of my company. The bad news is because we are growing so rapidly, I now need assistance. I know the basics of math and business, and have a great accountant and lawyer but I need someone to really start focusing on saving every penny and cutting cost. Im great at making money but bad at managing it. I was looking for a CFO to assist with the growth.
We did $250,000 last year and this year we are doing about $600,000 in wholesale sales. We are predicting to hit at least 800 - 1Million next year and i am at a stage of my company where I don't want to give away a piece of my company but I have too because I cannot afford paying someone salary to be a CFO. Also the other issue is Funding , because we get so many new orders we don't have the finance to fund it so the two main criteria i am looking for in a partner is Access to funding + advisory or hands on CFO position. My credit is no good so i am unable to get a bank loan, and i have got business loans but they were at 3%/month which is to high.
We do have some loans on the table that need to be repaid so I need to be very careful on every decision that is made to make sure every penny counts in the next delivery of goods to retailers.
I have had different offers on the table and it is all just making me very confused at this point. I guess my question now is who do you think is the better bet?
Option 01
This company is incorporated and has been running a successful tea company and just inquired a cheesecake company and stated he doubled the new cheesecake companies revenues in less then 3 months. It is a partnership of 3 owners that share equity in the corporation and is stating that they are worth about 1.2Million dollars and want to take 18% of my business. They seem extremely intelligent but do not have any background in fashion, as I would only need them for the number side of the business. They also want to make there own shareholders agreement, so they seem very strict on it and I get a sense they could try to screw me over somehow because they are all about money which is good and bad.
The best loan they can get me ( example - 65K for 2% / Month ) - Which is very high.
Which also includes :
*No buy in ( because he said he is giving his resource )
*Internal Loan (2%)
*Accounting Infrastructure
*Warehouse Space Downtown ( Basement though )
*Moneris fee of 1.5% vs the 3% you're currently paying
*Collections Infrastructure in Canada
*Shipping Rates reduced in Toronto (24%-50%)
*Advisory
Option 02
This guy has been in the fashion industry for over 12 years and has experience in running a retail shop. His company evaluation is at 1.2 Million dollars he claims. He is one of our biggest buyers who orders about 30,000$ in Wholesale orders with us per season which is about 60K per season with us. Only thing is he has tons of network and is much older then everyone else and has been in the fashion retail game for along time. He is 39 years old and wants to move into a brand instead of a retail store. He has finances he says but not Millions of dollars, enough to pass by.
* Buy In 50,000$ For the evaluation of 300,000$ ( 20% Equity )
* Willing to put on contract that if he does not triple revenues by 2018 he will dissolve himself ( becuase he is confident )
* Advisory ( But he is not a numbers guys, he just understands the retail side and right now we need someone to handle our finances )
* He has some contacts with lawyers and is currently looking for a good accountant
* Very down to earth and seems honest and hungry
* He said he would open new distribution channels in Europe & US by 2017 - 2018 or he will dissolve himself.
* Along with other small perks.
* He can get a decent bank loan at about 10% A year.
Option 03
This guy is a CPA graduate, and is about 27 years old, same age as me and is sick of working for companies. He is very smart and intelligent but does not have hands on experience with running his own business. He has about 500,000$ in his Investment account which he had showed me and he originally wanted 44% of the business and we negotiated down to 20% of the business. He said he has amazing credit and his dad is a lawyer and his dad has many connections to bank loans , he stated if he cant get a bank loan he will put down his own money at a low interest rate of 6% year or so. He claims he will put all his time into the business side and become CFO.
* Buy In ( Not sure amount yet )
* Wants to work in the business and grow it from scratch at 20%
* Has funding and money and connection.
* Very smart guy and understands numbers and financing.
* Has no experience in fashion or retail
* Has managed million dollar clients at his workplace.
Let me know who you guys would go with, as im having such a hard time at the moment and I do need to make a decision because, at the end of the day, my business will fall apart if I dont have a good CFO guy and someone to assist with FUNDING the upcoming Purchase Orders that retailers placed.
I have been running a mens wholesale fashion company for over 5 years now. We are rapidly expanding and growing, and I have had 100% Ownership of my company. The bad news is because we are growing so rapidly, I now need assistance. I know the basics of math and business, and have a great accountant and lawyer but I need someone to really start focusing on saving every penny and cutting cost. Im great at making money but bad at managing it. I was looking for a CFO to assist with the growth.
We did $250,000 last year and this year we are doing about $600,000 in wholesale sales. We are predicting to hit at least 800 - 1Million next year and i am at a stage of my company where I don't want to give away a piece of my company but I have too because I cannot afford paying someone salary to be a CFO. Also the other issue is Funding , because we get so many new orders we don't have the finance to fund it so the two main criteria i am looking for in a partner is Access to funding + advisory or hands on CFO position. My credit is no good so i am unable to get a bank loan, and i have got business loans but they were at 3%/month which is to high.
We do have some loans on the table that need to be repaid so I need to be very careful on every decision that is made to make sure every penny counts in the next delivery of goods to retailers.
I have had different offers on the table and it is all just making me very confused at this point. I guess my question now is who do you think is the better bet?
Option 01
This company is incorporated and has been running a successful tea company and just inquired a cheesecake company and stated he doubled the new cheesecake companies revenues in less then 3 months. It is a partnership of 3 owners that share equity in the corporation and is stating that they are worth about 1.2Million dollars and want to take 18% of my business. They seem extremely intelligent but do not have any background in fashion, as I would only need them for the number side of the business. They also want to make there own shareholders agreement, so they seem very strict on it and I get a sense they could try to screw me over somehow because they are all about money which is good and bad.
The best loan they can get me ( example - 65K for 2% / Month ) - Which is very high.
Which also includes :
*No buy in ( because he said he is giving his resource )
*Internal Loan (2%)
*Accounting Infrastructure
*Warehouse Space Downtown ( Basement though )
*Moneris fee of 1.5% vs the 3% you're currently paying
*Collections Infrastructure in Canada
*Shipping Rates reduced in Toronto (24%-50%)
*Advisory
Option 02
This guy has been in the fashion industry for over 12 years and has experience in running a retail shop. His company evaluation is at 1.2 Million dollars he claims. He is one of our biggest buyers who orders about 30,000$ in Wholesale orders with us per season which is about 60K per season with us. Only thing is he has tons of network and is much older then everyone else and has been in the fashion retail game for along time. He is 39 years old and wants to move into a brand instead of a retail store. He has finances he says but not Millions of dollars, enough to pass by.
* Buy In 50,000$ For the evaluation of 300,000$ ( 20% Equity )
* Willing to put on contract that if he does not triple revenues by 2018 he will dissolve himself ( becuase he is confident )
* Advisory ( But he is not a numbers guys, he just understands the retail side and right now we need someone to handle our finances )
* He has some contacts with lawyers and is currently looking for a good accountant
* Very down to earth and seems honest and hungry
* He said he would open new distribution channels in Europe & US by 2017 - 2018 or he will dissolve himself.
* Along with other small perks.
* He can get a decent bank loan at about 10% A year.
Option 03
This guy is a CPA graduate, and is about 27 years old, same age as me and is sick of working for companies. He is very smart and intelligent but does not have hands on experience with running his own business. He has about 500,000$ in his Investment account which he had showed me and he originally wanted 44% of the business and we negotiated down to 20% of the business. He said he has amazing credit and his dad is a lawyer and his dad has many connections to bank loans , he stated if he cant get a bank loan he will put down his own money at a low interest rate of 6% year or so. He claims he will put all his time into the business side and become CFO.
* Buy In ( Not sure amount yet )
* Wants to work in the business and grow it from scratch at 20%
* Has funding and money and connection.
* Very smart guy and understands numbers and financing.
* Has no experience in fashion or retail
* Has managed million dollar clients at his workplace.
Let me know who you guys would go with, as im having such a hard time at the moment and I do need to make a decision because, at the end of the day, my business will fall apart if I dont have a good CFO guy and someone to assist with FUNDING the upcoming Purchase Orders that retailers placed.
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