Looking for Advice - Taking Over Family Business

Discussion in 'Growing and Managing a Business' started by BoneMaro, Aug 10, 2015.

  1. BoneMaro

    BoneMaro
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    Hi everyone. Here is my situation:

    I am beginning the process of looking into taking over my father's business where I have been working for the last several years as vice president / marketing manager / lead salesman. My goal is to finalize the transfer of ownership within the next 2.5 years. It is a small classic car dealership structured as a corporation that has been in business for 16 years. It has been me and my fathers plan since I started working there that I would take over as owner and operator when he was ready to retire. We sell classic cars online to customers all over the world, marketing on eBay and similar auto sales sites.

    We would like to structure the purchase of the business into a monthly payment that would act as my fathers retirement. We operate out of a .46 acre lot of main street frontage with a two bay shop. The taxable property value is ~$430,000.00. Our inventory averages a total wholesale value of $300K-$400K.

    Where do I start? Thanks!
     
  2. Corzhens

    Corzhens
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    If you have mastered the operation of the family business, all you need to consider is how to effectively manage the business. Do you have enough respect from the people under you? That's one of the most common problems an heir to the throne inherits, a labor force that have solid respect for the senior but no respect for the junior. In terms of operations, you also have to be in close contact with clients and suppliers. Take a note of that.
     
  3. missbishi

    missbishi
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    How safe is this plan? What I mean is, what happens if the business has to be sold for some reason? Where does that leave your father with his retirement plans?
     
  4. healingforce

    healingforce
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    Do you want to pay monthly your father figuring this "wage" as retirment? By the way I will ask someone like a business consultant, he will surely help more in depth than BAF can do but this sounds suerly like not an easy operation.
     
  5. Vincentash

    Vincentash
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    Hi BoneMaro,

    Good point, mentioned by missbishi.

    I think there should be another way how to organize it but you should better seek an advice from a professional consultant.

    Best,
    Vincent Ashton
    Offshore Company Formation
     
  6. Damien Lee

    Damien Lee
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    You should consult with either a lawyer that is experienced in business transfers or a business broker. In my case, I've always used a business broker that understands all the local laws regarding business ownership and transfers. While the business broker's fees didn't come cheap, it did give me peace of mind and I've enjoyed smooth transactions of buying and selling businesses. Find a reputable one in your area and you should be able to solve this issue in an efficient manner.
     
  7. pwarbi

    pwarbi
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    When you say a monthly figure for your father, do you mean as in your buying the business off him monthly, or as a lump sum and then paying him a monthly figure as a percentage of the profit you make?

    Either way if you've been in the business as long as you have, no doubt a sit down with your accountants and business manager would be my first steps.
     

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