Buying / Selling a business

Stinky · 12 Nov 2019 at 22:36

Hi team

anyone here got any experience in buying out a business partner or selling half a business to your Business partner.

the time has come and my partner wants out of the company, the figures are great, and I think I can make the company even more successful on my own, but.... I need to find over half a million to buy him out.

alternatively he will buy me out for the same amount! I’m really struggling with what to do and we cannot agree on a deal, the last think I want it to dissolve the company and walk away with considerably less from it!

anyone with any previous experience that might be able to answer anything?

Minusorange · 12 Nov 2019 at 22:42

Stinky said:
I need to find over half a million to buy him out.

I don't think you'll find it here

AiiR · 12 Nov 2019 at 22:55

If it's half a million quid, I don't think ocuk, a computer forum, is the place to be getting business advice from. :confused:

Quartz · 12 Nov 2019 at 22:58

Stinky said:
I’m really struggling with what to do

You need proper advice and a full audit. Are you a member of the CBI, Institute of Directors, or anything? Start there.

Pudney · 12 Nov 2019 at 23:25

Quartz said:
You need proper advice and a full audit. Are you a member of the CBI, Institute of Directors, or anything? Start there.

Why would he need an audit? :confused:

To the OP, talk to a Corporate Finance specialist. There are lots of options to get funding at that level, especially if your business is doing well both in terms of cash and profit, it isn't actually that much to commercial lenders. Plus don't ignore the fact that just because you agree a price it means you have to pay it all in one go. There's nothing stopping you staggering payments.

Edit: for clarity I have no experience buying/selling a business. i have lots of experience advising about it. Others deal with arranging financing though.

Quartz · 12 Nov 2019 at 23:35

Pudney said:
Why would he need an audit?

To verify all the figures and create a baseline to show to potential lenders.

LuckyBenski · 13 Nov 2019 at 00:15

Sell him your half for half a million quid
Use your half million quid to buy him out of his half
???
Profit

All meant in good humour

Pudney · 13 Nov 2019 at 00:41

Quartz said:
To verify all the figures and create a baseline to show to potential lenders.

it’s already half his business. He should have access to all the possible information he could need.

kindai · 13 Nov 2019 at 00:42

Stinky said:
alternatively he will buy me out for the same amount!

Sounds like hes already got a buyer for 1M+ then if hes willing to buy you out and also wants out.

Thekwango · 13 Nov 2019 at 00:47

Minusorange said:
I don't think you'll find it here

crowdfunding maybe? the OcUK 'massive' could all chip in and become silent partners......can't see what could go wrong with such a solid plan

LuckyBenski · 13 Nov 2019 at 00:55

Thekwango said:
crowdfunding maybe? the OcUK 'massive' could all chip in and become silent partners......can't see what could go wrong with such a solid plan

I'm putting RGB on my portion.

kindai · 13 Nov 2019 at 01:01

LuckyBenski said:
I'm putting RGB on my portion.

I think your portion will be an option of R, G or B. Not all of them.

koooowweeee · 13 Nov 2019 at 06:06

Dragons den

NVP · 13 Nov 2019 at 06:52

Talk to you banks business manager or arrange a financial consultation with them, if your company is on the up they should help you with half a mil without blinking.

Stinky · 13 Nov 2019 at 07:22

Thanks, Ive got a few meetings booked. Just wondered if anyone on here might have come up against anything like it previously.

I guess the fear is getting myself into that much debt, when I could walk away mortgage free (essentially)

Lakeland · 13 Nov 2019 at 07:32

If he’s willing to buy or sell, could that suggest he might set up as competition if he sells?

booyaka · 13 Nov 2019 at 08:46

You need some specialist funding advice, a good lawyer and a proper sale contract to prevent him setting up the same business immediately after selling.

morbid42 · 13 Nov 2019 at 08:55

Ask for more, start at 800k. Take final offer. Let him do what he wants after. You only live once, have a modest life with no work.

Martynt74 · 13 Nov 2019 at 08:58

booyaka said:
You need some specialist funding advice, a good lawyer and a proper sale contract to prevent him setting up the same business immediately after selling.

Yeah, if it's a services business, you'd need to consider whether he's likely to just approach his main clients directly afterwards and leaving you with debt and in a much less profitable position.

dowie · 13 Nov 2019 at 10:17

I'd listen to @Pudney on this tbh...

I would also consider this:

Lakeland said:
If he’s willing to buy or sell, could that suggest he might set up as competition if he sells?

It does seem odd that he either wants you to buy his half or him buy your half??? Have you had some unresolved agreements because it doesn't sound like he's necessarily giving up whatever you two do together if he's also willing to continue on his own.

What sort of risk is there of him becoming a competitor here if you buy him out? How much value does the knowledge of your clients, suppliers (if applicable) etc.. have? How quickly could clients jump ship etc...?

Might be worth having a word with a solicitor re: this and looking at how you can protect yourself against him just setting up a rival company and poaching clients etc.. might want some non-compete agreement in place as part of the deal for some set amount of time etc..

Buying / Selling a business

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