Hi everyone!
Recently I got to know my mother's friend who owns a family business with her husband. They are a very sweet couple and have ran the Blinds, Curtains and Shutters business for about 15 years. I've shown my interest to partner up with them as I think they have a potential. I ve managed to talk to them through about some of the areas they could expand ( opening offices, showrooms, self manufacturing facility) and their struggles they experiencing now ( mostly IT: database logging, emails , phone calls).I am having troubles deciding on how much capital I would like to contribute and how much of equity I'd like to have as a result of that business. It is very difficult for me to estimate the value/price of the business without any financial data on hand, based on what they said , is that they are making about 500,000 turnover with 40% net profit margin. They are quite old fashioned and have never dealt with partnering up , etc.. I was thinking to offer them my help regarding to IT aspect of the business for about 2-3 month without salary to familiarize myself with their business and then buy in about 20-30% of their business and split profits accordingly. They have told me that they are interested in selling the business as they 'd like to retire soon. But as of now I cannot promise them anything... I'd like to hear your opinions and possible advise in regarding to this partnership. Should I be requesting their financial data to make a better judgment of the net worth of the company and how much should I contribute? I know it's quite a silly question but , I don't want to come across as very straight forward and ill-mannered to them, I'd like to come across the financial aspect as delicately as possible...
I would appreciate any feedback you can give. Cheers!
Recently I got to know my mother's friend who owns a family business with her husband. They are a very sweet couple and have ran the Blinds, Curtains and Shutters business for about 15 years. I've shown my interest to partner up with them as I think they have a potential. I ve managed to talk to them through about some of the areas they could expand ( opening offices, showrooms, self manufacturing facility) and their struggles they experiencing now ( mostly IT: database logging, emails , phone calls).I am having troubles deciding on how much capital I would like to contribute and how much of equity I'd like to have as a result of that business. It is very difficult for me to estimate the value/price of the business without any financial data on hand, based on what they said , is that they are making about 500,000 turnover with 40% net profit margin. They are quite old fashioned and have never dealt with partnering up , etc.. I was thinking to offer them my help regarding to IT aspect of the business for about 2-3 month without salary to familiarize myself with their business and then buy in about 20-30% of their business and split profits accordingly. They have told me that they are interested in selling the business as they 'd like to retire soon. But as of now I cannot promise them anything... I'd like to hear your opinions and possible advise in regarding to this partnership. Should I be requesting their financial data to make a better judgment of the net worth of the company and how much should I contribute? I know it's quite a silly question but , I don't want to come across as very straight forward and ill-mannered to them, I'd like to come across the financial aspect as delicately as possible...
I would appreciate any feedback you can give. Cheers!
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