Becoming a Partner/Owner
Becoming a Partner/Owner
(OP)
I work for a med/small sized MEP consulting firm with three partner/owners. Two are nearing retirement and, though unsaid formally, it is likely I will be asked to replaced one of them. I am fairly young and do not have much experience with the inner workings of company ownership/responsibility/liability/etc.
Before the opportunity is presented to me, or before I approach them about it, I would like to educate myself on the process - what questions I should ask, etc.
Is there a resource (book, website) that I could be looking at? Any other advice?
Before the opportunity is presented to me, or before I approach them about it, I would like to educate myself on the process - what questions I should ask, etc.
Is there a resource (book, website) that I could be looking at? Any other advice?





RE: Becoming a Partner/Owner
RE: Becoming a Partner/Owner
So either the other partners will have to purchase that share or open the company up to employee ownership hoping that the employees want to and can afford to buy out.
Partnership is about more than stepping up for a leadership role, it's also about ownership.
Regards,

Qshake
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RE: Becoming a Partner/Owner
Wes C.
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RE: Becoming a Partner/Owner
RE: Becoming a Partner/Owner
I understand there will be a buy-in of some type and that the details of that need to be negotiated. I'm sure there's other things I'm not thinking of. Talking to an attorney or accountant is a good idea...
I was hoping to get a start on my own though .. do a little homework.
RE: Becoming a Partner/Owner
One very, very important thing that you have to realize is from the moment that you are a "owner" eventually you will see your colleagues in a different way. There might be behaviours/attitudes/situations that before you would tolerate and now that you put your money in it you cannot tolerate any longer. It is a little bit like being promoted and start supervising your former colleagues. You have see if you have the will/gutts to perform this new role. Can you change from "the old chap" to the "The Boss"?
RE: Becoming a Partner/Owner
RE: Becoming a Partner/Owner
RE: Becoming a Partner/Owner
As has been mentioned, you will need to do some due diligence on the company's financial condition. I would elicit a good CPA to go through their cash flow, statement of earnings and balance sheet. It will be pretty clear pretty fast how solid the company is from a financial position. From that and some basic forecasts it's very easy to determine the value of the company so you can determine if what they want are asking is reasonable.
Working for the company, you already should have some insights on their relationships with current clients which is a big part of the equation - do they do allot of repeat business, are they lawsuit prone, any outstanding judgements? Any pending, etc. Any areas of significant exposure (asbestos, etc.)
Once you determine if the investment is a good one, you will need to discuss candidly with the other partners the roles & responsibilities, expectations, etc. and it is important to get these in writing and make sure all partners sign off on them. Then you can begin to look at an agreement, at which time you will want to involve an attorney specializing in partnerships to work out the details. Of course financing on your part, if required will need to be worked out.
Good luck.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website: www.oil-gas-consulting.com
RE: Becoming a Partner/Owner
Charlie
www.facsco.com
RE: Becoming a Partner/Owner
I find that talking to people I know (or sort of know) is very useful because they also caution you on what may go wrong, what caught them off-guard, etc. in addition to what the pros (accountant, lawyers, CA/CMA/CFA/etc) will tell you.
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
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