hydro3
Civil/Environmental
- Jun 24, 2013
- 13
Hi there all,
Just wanted to get some views from other on a question I have. I work for a small civil/environmental firm with 4 full time professionals, 1 part time field tech and 1 office admin. I have been here about 1 year. When I was asked to come work here I as asked to help straighten out the engineering department and help get the company back on track. Over the course of the last 12 months, I have help the company get back into the black by bringing in clients, making key staffing decisions, and being very billable while managing the engineering staff.
Recently the current owner said he would like me to be one of the owners of the firm, I said we should talk about it since I am interested in owning a consulting firm. Well when he brought the paperwork he showed me how valuable the firm was (to him) by discounting the loss from last year and basing a value of the company on the first 5 months of 2013, and then projecting those profits over the remaining months of the year.
He has said that the company is worth approximately 7x to 10x times the EBITDA or the net income. He wants me to to buy in for 20% of the company and he said he will finance. However when looking at the numbers more closely it appears that I account for approximately 50% of the net income/EBITDA just from my ability to maintain billability. Then when you account for the projects I have bought in and profit from subs I have managed that comes up to about 65 to 70% of the net income. It seems that my contribution to the company is well above my percentage of employment and I am having a hard time justifying why I would pay someone 200k+.
Sorry for the long post any thoughts would be appreciated.
Just wanted to get some views from other on a question I have. I work for a small civil/environmental firm with 4 full time professionals, 1 part time field tech and 1 office admin. I have been here about 1 year. When I was asked to come work here I as asked to help straighten out the engineering department and help get the company back on track. Over the course of the last 12 months, I have help the company get back into the black by bringing in clients, making key staffing decisions, and being very billable while managing the engineering staff.
Recently the current owner said he would like me to be one of the owners of the firm, I said we should talk about it since I am interested in owning a consulting firm. Well when he brought the paperwork he showed me how valuable the firm was (to him) by discounting the loss from last year and basing a value of the company on the first 5 months of 2013, and then projecting those profits over the remaining months of the year.
He has said that the company is worth approximately 7x to 10x times the EBITDA or the net income. He wants me to to buy in for 20% of the company and he said he will finance. However when looking at the numbers more closely it appears that I account for approximately 50% of the net income/EBITDA just from my ability to maintain billability. Then when you account for the projects I have bought in and profit from subs I have managed that comes up to about 65 to 70% of the net income. It seems that my contribution to the company is well above my percentage of employment and I am having a hard time justifying why I would pay someone 200k+.
Sorry for the long post any thoughts would be appreciated.