My three-pronged approach to the rest of my life was to keep trying to buy my existing company, start my own company and look for a job (especially if it included growth and ownership potential).

Here is where I stand today, 60 days into my adventure:
BUYING INTO MY CURRENT COMPANY - Owner of the company that I currently manage took me out to lunch for my birthday. Along with our usual chat (where I give him his usual 90-day update), he mentioned that he spent more time pondering how to get me to buy the business. Good news is that he truly seems interested in keeping me around, and why not - just this week I found another $25K in savings going straight into the bottom line, and company is now safely churning profits while growing 10-15% per year.

Bad news is that his plans are still unacceptable to me. His basic premise is that he loans me the money to buy the company, I make small pay sacrifice and use the company profits to pay him back. However, even with the low interest rate of 6% and low valuation of say 1.5M, just interest would add up to $90K per year. So, even if company maintains good profit margins, majority of the money would be going towards interest payments, and it would take years just to make a dent in the principal. So, I would have to take a personal risk of borrowing 1.5M, sacrifice some pay and future raises (say $20-25K per year), and in 5 years I may own 10% of the company if I am lucky.

I am already getting 10% profit sharing bonus, so presuming 120K in profits that I would need to maintain for 5 years in order to pay off 10% of the company, not buying the company (and taking a pay cut) would work out to making $150K over next 5 years with almost no risk. So, unless my current boss decides to give me some credit for building the company from nothing to what he has now, there is no hope.

JOB SEARCH - In my 20+ years of working life, I only wrote one resume, applied for only one job and had one interview (all for my current position). Few jobs I held before this one were results of contacts I had and my reputation - each one was based on "start tomorrow, and we will see how it goes". So, to say that my job searching skills are rusty is a gigantic understatement. So, my goal was to actually write my resume and see if I can get any interest in my services (I wanted to be sure that my skills are marketable in case I decide to leave my current well-paid job).

Well, after sending my resume to exactly 10 places, I was pleased to receive 3 calls. One was from the pretty useless and shockingly unprofessional recruitment company (see my post about this experience here). Second call came from the very respectable telecom company looking for sales people to join their team of 50 people. However, after careful consideration, I decided to reject their invitation - job was in Toronto and well below my capacity. Using my smooth-talking skills, I did manage to put a positive spin on my refusal to interview - so much so that they will be coming to have lunch with me and discuss opportunities - maybe even hiring my new company as their agent in my area. Cool!

Last job was for the company I was very excited about, but job was well below my experience level. Still, I used the opportunity to make contacts with the company and it worked better than I expected. First, over few emails, their awesome HR manager and I became BFF's for life.

My resume made it to the CEO and VP and they discussed my qualifications and agreed that I am overqualified - but, they will be working hard to see if they can find the way for me to join them in some capacity. Also, I asked and their HR manager kindly gave me some ideas and advice on how to change my resume and adjust my approach depending on the job I am applying.

In the meantime, my wife and I decided that it may be best to just stick with the current job for now instead of spending time looking for another one. Current job comes with great pay, incredible flexibility (that gives me time to work on my own company), it means that we do not have to move, I actually still love doing it... Going elsewhere would probably require moving to another city, wearing tie and suit, going to work on a more strict schedule, travel more, having someone telling me what to do... Instead of looking for another job, we decided to push my current owner to providing some sort of golden parachute in case company gets sold - so if my current job ends, I have year or two to work on my own business before looking for another job (or maybe travel for a year).

MY START UP - This is the disappointing part of my update. My initial goal was to create some visibility and marketing outside of my current location and see if I have any takers. After 100 letters and faxes, about 30 emails, about $100 in Google Advertising and $50 in Facebook Advertising, I have nothing to show. I do have bunch of low quality "Likes" on Facebook (all mis-clicks no doubt), at least 80% of all Google clicks were mis-clicks... Not a single call or email!

After some soul searching, I decided to change my approach. I believe now that my approach of trying to first approach small businesses was misguided. Going after them made my offers seem cheap and amateurish and even if I sold something, earnings would be poor. Further, larger businesses are probably more receptive towards my type of services.

So, I will do a very quick change on my web page to focus more towards larger businesses and sell my experience and potential results, and not offer gimmicks for small businesses.

After that I will dedicate myself to calling and reaching out to 250 larger businesses in my intended target location. I have already created a list of intended targets, so I will simply focus on making my first sale.

Wish me luck!
 


Comments

Prashant Srinivasan
08/21/2012 6:14pm

Hmm. I don't see how your business making $120K in profit annually can be valued at close to $1.5 M. That is just a very high valuation for a privately owned company. Do you have complete access to the books, or is this a price that the current owner just threw out at you?

Reply
08/24/2012 11:59pm

Indeed, I do get to see all the numbers. Majority of the value is based on the value of customer base (and account receivables) - which can easily be sold to another company for between $600-800k. Still, I agree with you, value of 1.5M is too high. My last offer was 1M, but since I represent big part of the value of the company, I will probably lower my offer to 800K very soon. Thanks for your comment.

Reply
09/07/2012 11:28pm

I agree with Prasant that the valuation is bit high. I am in hotel business. A good hotel can easily generate six figure profit, but you can buy it for much less than 1M. I like your idea to lower the figure. Considering that you've helped company grow, you should offer much less -- may be around 500K -- to make it an attractive deal.

Reply
09/10/2012 12:46am

Customer base alone is conservatively valued at $500-$800K and should be easy to sell. So, real question is how much is the rest of the business worth if I leave... ;)

Reply



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    Giving up a safe job and six-figure salary for the uncertain path of entrepreneurship! Read to see if I make it.

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