Design Business... Need Advice

[vc66]

Hi All-

I used to work for a small Medical Device company. When I decided to leave, I had a heart to heart talk with the president of the company. I had a huge amount of respect for him, and I spoke very candidly to him regarding why I was leaving. He then told me that he would like to help me start my own design business, and that he would be in touch with me. I initially thought he was just being nice, and that I'd never hear from him again. However, recently, we've been talking, and he has since sold his business. He now, true to his word, wants to start a design business with me.

The setup would be--himself and a business partner would run the "business" part of it, and I would be the design side. He is funding the entire start-up himself (he has a little bit of money). He already has a customer base, and is well-respected in his field.

This is obviously a tremendous opportunity, and I was wondering if anyone could give me any pros and cons to this situation. Other than the effort required (which I'm totally prepared for), is there anything that I should know that I'm possibly missing? because I'm incredibly excited?

Thanks in advance.

V

 

[MacGyverS2000]

Having someone else foot the bills is a great way to start a business, but unless he's uncommonly generous, be prepared to see little more than a standard designer's wage from the job. You'll be doing all of the design work and be getting the paycheck of just that, a designer, not a business owner. Hopefully I'm wrong and the two of you will have worked out a deal more worthy to your pocketbook. Also be aware that since someone else is footing the bill, you may have little to no say in day-to-day or long-term business decisions, and that can be a tough lump to swallow.

Having an existing customer base is a huge boon for any business, so it may be worth the trouble just to get attached to the customers and make a name for yourself.

Dan - Owner

http://www.Hi-TecDesigns.com

 

[vc66]

Thanks Dan.

We are drawing up a contract. He understands that compared to him, I'm poor, and if this doesn't work out, I'm out of luck. Therefore, the contract will state that if the business flops, I have no liability. He is very generous, actually, and I feel like he sees a little of himself in me? He's about 35 years my senior. Also, if the business runs well after 6 months, then I would be made part owner. I feel like this is a win-win situation, but I can't help feeling like this is too good to be true.

Thanks for the observations! Keep 'em coming.

V

 

[PeterStock]

Having seen one of your responses to a question in a different forum, get that PE before you start the business.

Peter Stockhausen
Pollak Switching Products

 

[vc66]

Fortunately, this business would be in an exempt industry.

V

 

[ajack1]

Firstly congratulations vc66 that seems a great offer.

You seem to have great respect for this person both professionally and personally and judging by what he is offering he feels the same way about you, there is no better way to go into a business partnership.

The only down sides I can see is he could probably make the contract very much favour him in the short term and in the long term if the company is successful you may end up losing out on what you would earn if you went it alone.

However IMO this is far outweighed by the fact he is taking all the financial risk in the short term and you will have someone with a proven ability to help guide you at least in the early days. Never underestimate the cost of the mistakes you could make if you go it alone, the school of hard knocks has certainly cost me a pretty penny or two and I doubt I am alone.

Even if this all goes belly up all you will have “lost” is a short period of your working life and the experience alone will more than make up for this, if it all works out the sky is the limit.

This seems a great opportunity; grab it with both hands and good luck.

 

[csd72]

make sure that the contract states that you have first option to buy him out when he retires.

 

[vc66]

Thanks very much for the comments.

ajack1 - I definitely have a huge amount of respect for him, and he has already proven that he can take a small business, and turn it into a multi-million dollar corporation. Also the fact that he's using his own money shows me that more-so than with investors, he won't want to fail.

csd72 - You're absolutely right. Good point.

Thanks again all.

V

 

[MiketheEngineer]

Just make sure you get the "ownership" part in writing..

And any other "deals" he may be offering

 

[KENAT]

vc66, Unless my memory's playing up we work for the same company, different divisions/coasts of the USA.

From what I've seen in my time here I'd say it sounds like this opportunity is too good to turn down in comparison with staying put.

Note what the others above say, and my division may be very different from yours, but if I was presented an opportunity like this I'd have trouble saying no when taking into account working for this place.



KENAT, probably the least qualified checker you'll ever meet...

 

[ProEDesigner00]

vc66

Find something to bring to the table that is tangable. Somesort of risked monies that would be of value to you if put somewhere else. Even if its buying a couple seats of the latest version of office products your going to use. This gives you an investment into the situation that he cannot easily overlook. It is then worth something if things come apart.

After that I wished i was in your shoes. If your looking for a good sub-contract ProE guy I can give you contact info