A large company wants to buy into my small business and expand it, I need help?

Discussion in 'Growing and Managing a Business' started by HoratioLightning, Jul 31, 2014.

  1. HoratioLightning

    HoratioLightning
    uix_expand uix_collapse
    New Member

    Joined:
    Jul 31, 2014
    Messages:
    1
    Likes Received:
    0
    Hi,

    A medium to large company has approached me regarding buying into my small business and expanding it. I have no experience in this whereas they do and am finding there are many questions arising.

    They are offering a buy in which would give them a controlling share, but are offering a lot and would expand the business very fast. I am worried that they will compromise brand integrity and that my previous freedoms of being my own boss will be lost if I sell more than half the shares.

    They seem to be playing hardball and asking for figures and rushing me. I am unsure whether to have the business valued therefore showing my hand, or ask them to make an offer as I'm sure they will have a figure in mind anyway, seeing as they are the ones who approached me.

    I am also unsure whether, if they put in £100,000 which gets them 51% of the business, does this mean all the money will go back into the reinvestment process or to the existing share holders who then decide between the company what money is put back in?

    I am sure there are more questions but this is a good start and I would be very grateful for any advice,

    Thanks,

    Tom
     
  2. Arizona

    Arizona
    uix_expand uix_collapse
    New Member

    Joined:
    Aug 2, 2014
    Messages:
    20
    Likes Received:
    8
    The simple thing is that if they want to acquire a controlling stake in your company you have to be willing to sell for them to get it.

    You need to take a step back and assess the situation - rushing in either way is not the way to go right now.

    Assuming that you have current financials in place that give you the current revenue/sales and profits is a start. Understanding the potential for future growth and profits is another key point.

    Is this company in the same market place as you? i.e. you are competition or do they do something different and your company would be an add-on / new avenue for them?

    If selling any share in your company is something that you would consider that you would want to engage with the appropriate legal person so that you don't sign anything that will come back to haunt you and that you get the best possible deal out of the whole thing.
     

Share This Page