Presently employed, built business and team up for the business owners repeatedly over the past 9 years. Have had no help from them other than the usual pressure to perform. Under pressure now to to do stuff which does not sit well with me in respect to the team, suppliers and clients. Not taken this line in 9 years but they seem now to want a change (which I know will effect clients, team and suppliers immediately).

The latest business I have done for them is easily replicated and I have made sure employment contracts etc for me and staff allow a certain freedom should we leave (it’s a small industry we work in).

At what point did the collective realise it was time to move on for them ?

Are they looking to sell the business? May explain the change in strategy?

Doesn’t necessarily help you make a decision but I’d be looking at their motives.

I’m in a similar spot. Tough decision, quite scared but committed now. Doesn’t help that now I have started talking to potential clients, they figure I am now free and offer me jobs. Making it very hard to stick to the plan. (Nice prob though, I am surprised).

My driver was both that I was increasingly hacked off with my employer as you are, but also that I have wanted for some time to move outside.

Anyway, fwiw, my tactics were to look at what my present employer was buying in, what other companies were buying in, what I wanted to buy in but couldn’t – and then create an offering with a reasonable idea of value. testing the waters with some potential clients with whom I have history has also been useful.

HTH.

Thanks guys, opinions appreciated.

They had an offer to purchase the business 6 months ago. Great new owners, investment we needed, BUT existing owners got greedy as they suddenly saw the earnings we had historically had and the secured work ahead of us.

Owners are getting old (late 60’s) with no real plan for the other businesses they have..but they have valued the business on future earnings which would prevent me from finding a buyin.

Have approached a couple of clients before Xmas who would move across to us if we started afresh. Which does not help.

Team is going to get busy over the next 6 months (seasonal work) and our bonus is paid on this, so nothing is going to happen soon.

My wife and I review the situation every 3 months and I guess I need to go for a ride on the bike in the sunshine before the snow arrives….then discuss with the wife…

Took the leap last year. Boss was getting on my wick and was a case of now or never.

Sadly, there will always be questions and niggles you won’t be able to answer.

Was a case of would I regret it if I didn’t got for it.

It sounds like you’re a key component in that business, and without you those projections would mean sweet FA.
Are there any clauses in your contract preventing you from starting a similar business? If not, I’d be off, taking the customers with me.

Out of curiosity, how do you value a business? (I have one eye on this as a future plan for my business).

Nothing stopping me setting up another business similar to which we have at the moment. However I have a lot of loyalty to the staff I have brought in and some of the bigger projects we are doing would not be available to me. But I have done same thing now 15 years, just ended up managing other people and building up business etc to a decent commercial level.

An option I have is to bring someone senior in, split responsibilities with them and I reduce my time on that business to do something else. Am currently half way thro a management course at a leading business school and this has yielded some new options for me totally away from what I am doing.

Out of curiosity, how do you value a business? (I have one eye on this as a future plan for my business).

There are lots of ways, but mostly the value of a business is easily determined by what someone HAS just paid 🙂

The valuation we had was 4.5 times the EBITDA for last year. This is a professional services business so we don’t have assets etc other than staff and contracts. Recently another business in my sector was purchased for around 10x EBITDA but that was as a consequence of a large contract they had secured and the plc which bought them was a competitor in the sector and wanted to strengthen their offering. Have seen loads of companies over the years swallowed up this way.

There is always the option to present them with an offer. If you are happy to leave if they reject it, let them know you would be happy leading the business as a partner, but no longer as an employee.

If it works out you get what you want with an easy get in. If it doesn’t take the harder route. All that would remain is figuring out what you want out of it if you stay as a partner.

Then you could steer it the way you want to or leave an start your own having been straight with them.

This is where I struggle – I know what we earn, I know what profit the partnership makes and what tax we pay, but slicing it up to work out that stuff is beyond me. The accounting software we use shows profit, retained profit and all that stuff but it makes little sense to me.

Contact suppliers and account holders to see if will deal with you directly instead with a better deal?