AboutRobert Doblmeier, M.Sc. Expertise I am happy to answer questions about Small Business Sales i.e. Small businesses with Gross Sales in the 250K to 50 million dollar range. The business must be privately or closely held(no publicly traded companies).
Experience Why me? I am a full time business broker with a 14-year history in real estate in New York and Florida. I taught the New York State Licensing course for 2 1/2 years. I am the winner of VRs’ Prestigious Bronze Award for 2006, and a major reason my office won the Centurian Award in 2006. After just seven months in this office, I closed the deal that resulted in the largest single commission in our offices’ history, a record that stood for over 1 full year. I am an instructor for the Small Business Development Administration, teaching a course I designed and created called "How to Buy a Business". I am a Certified Networker and have won the Notable Networker Award three times in one year. I am also an instructor for the Referral Institute, teaching the Referral Pipeline course. In 2006, I was nominated to the Presidents' Business Advisory Council on Small Business. Most importantly, I have amassed a large database of recognized professionals that can facilitate your transaction.
Organizations The Referral Institute, Business Networking International, International Business Brokers Assoc., German American Business Council,
Publications Small Business Development Corp. and various private newsletters.
Education/Credentials B.Sc. Stockton College, M.Sc. Long Island University,
Awards and Honors Centurion Award for 2006, Bronze Award for 3Q 2006, Recognition for the First SBA loan done in the Office.
Past/Present Clients I can not , for reasons of confidentiality name past or current clients. I can name industries where I have facilatated a transaction: marine, furniture, beauty industry, education, food service, automotive, home improvement, construction, and tax industry.
Question QUESTION: A partner and I formed a c-corp private in 2003, 50/50 with the only stipulation of selling the stock is it has to be offered to the other partner first. He wishes to continue in the business, I want to get out and do something else, and have a buyer who is willing to make me an offer my partner will likely not match, but it makes no difference as long as I get out. What are the watch outs and be carefuls? We have little debt and will have none before I sell, to keep things clean, and past the watch outs and be carefuls what is the best way to approach this? I may even have two buyers who might want 25 each. And last, what is the best way to do this at the best tax advantage?
That is a ton of a question, I am a volunteer on here under electrical twice, one in for the home and the other in electric motors. I have myself on vacation right now, but will get back on soon. I mention that because I understand the time and effort it takes to answer all these questions. I also appreciate the fact you are willing to help out as I do, and it goes under appreciated many times, but I have saved some people from killing themselves, so I have had some nice comments from breathing humans. One more complication is we [the company] bought two thirds of another c corp private small not traded with the same stipulations and only those stipulations. I am 55 and reaching burn out, and need to get out, the possible owners are younger and go getters and I would be willing to owner finance with substantial down, plus be available as advisor by the hour on a W9 type situation. I am going to start selling a company who helps small businesses with websites and closely watched advice, to help small businesses which is very appealing, to me, so it all kind of fits, if I can get my shares sold and go on to the advisor role, or career if you will. We have the stock certificates I am not sure if they are of any color, I understand that has some meaning in Missouri, but the lawyer who drew up the papers in 2003 knew we wanted maximum protection and still the ability to split up if needed, so I am pretty sure he did everything he could, but he is a regular lawyer no specialty, he had to get some advice to set us up, and I have not approached him yet. My partner will not want me to go, as I am the 'brains' of the operation, but I cannot live my life on his behalf any longer. Can you and will you help me? Again I gave you a huge question, like me, a person will say they have a motor problem on a widget connected to four more widgets, have no data plate, and the motor runs hot and shuts down on Tuesdays for no reason, what could the problem be? Believe me I have spent a million hours on here, but that and youth coaching and sponsoring is my charity, it is easy to give away and help, give your salad dressing away when you have tons of money, not so easy when you are just making it with a family of four, so I give to truly help, a rare bird I am finding more and more no one helps anyone, period, a shame but the truth. In advance I really appreciate you helping me with whatever advice you might give me, I need a new career or burn out will lead to health issues and so the story goes, and I don't want that. Thank you again from everyone who may not have shown the appropriate appreciation.
ANSWER: Yes Will, That is ONE heck of a question... and the color commentary is not so bad either.
Lets start with # One. Address your tax accountant first, as they have the particulars of the situation and you can approach this as a "What if..." scenario, so as not to make him/her too suspicious. Now lets get too some meat... Are there specific refusal pionts in the contract or constitution between you and your current partner? Can your (soon to be former ) partner refuse/challenge your sale based on specific points or does he just have the right of first refusal? If he can't pay...then you might want to assume he won't be able to pay for a lawyer to challenge the sale based on the ability of the "buy in" partner. And by ability, I mean, is the "new" Partner able to fill the same role (being the brains)equally or better than you.
Item #2 If you want OUT and your doing owner financing, Make sure the default clause does not land you back INTO the business your burnt out of. Do all you can to receive some other form of compensation in the event of default.
Next. Having two buyers might sound good... but two buyers for half a business.... in my opinion can be worse than just one. Your soon 2B former partner has 2 new personalities to deal with and lets not forget you claimed to be the brains of the operations, so I think he will be severely challenged unless each of these new folks brings piratical experience to the table as well as checks.
The rest is really in the negotiations and how you phase out. You should all agree to a specific date for your exit AND a specific rate for your consultation afterwards. As you are 3-4 individuals all with a vested interest, you may want to get a professional evaluation (or two) done ...for which you all pay an equal share that way there is no bias about the value.
---------- FOLLOW-UP ----------
QUESTION: I appreciate the kind words regarding the color commentary in my question, I broke a rule I have of never sending a note of any importance without making a draft, and either sleeping and then reading again, or at the very least, give it several hours and several other transactions, before reading again, prior to sending.
Emotion is a funny thing, and one way to check it at the door is to go through my usual routine, which I just did not have the time to do, at least at that time I did not.
So first thanks for being a good sport about all the unneeded garbage.
You gave me a perfect answer, the corp was made up by a common lawyer friend, who saw down the road this might happen, and put in the only caveat, which is either partner must offer the shares to the other first, at whatever price, past that nothing about conditions or qualifications.
I am 99% sure I am good on that one.
I should know more about this than I do, but I have been studying case law concerning insurance fraud, on a vexatious denial, and actually "won" part of step one, meaning we got half the limited damages instead of a complete denial, but there were to be no caps or limits set that low, they changed it and buried it in the policy language, which I have learned is an accepted venue for fraud many are victims of. What a world.
Anyway, I think you have given me a step by step plan that makes perfect sense in every detail.
I did read that selling a business that does a majority of work for a Government entity can have some dangers, but the account and lawyer should be able to keep me out of too much trouble.
Again, I appreciate the help, I know this took some valuable time and it is greatly appreciated and admired, most professionals of your stature never do anything without a price tag, and my small brain tells me that is part of what is wrong with the whole mess we are in now.
So beyond appreciation is admiration, that you would take time to help a complete stranger.
If you know any good accountants that know business issues, in the KC area, I would sure try and use their services.
Looking back you are correct a two person corp is building a box of possible trouble down the road, but we were in a time crunch, as this Government Work fell on us with no notice and it was critical work for the Government, luckily our attorney was smart enough to make it fairly easy for either to get out. So he says, so it reads, so you say from my interpretation.
It is a way longer story than I even touched on, but luckily again, I got the main meat in between the altruistic color commentary. My apologies for the extra fluff.
I am attempting to do this with the least aggravation for everyone, but when you find yourself the guiding light and main director and provider of income, it is not a good spot to be in. No one wants you to be gone, expectations are setup, and those are very hard to get away from.
You did a great job and a great service to me, and everyone else, I am sure.
Thank you again for your time and patience, I have a good map and direction to follow.
Should you ever need any advice on about anything from broken appliances, to ghostly smoke alarms going off at 2AM everyday for no reason a smoke detector should go off, to broken motors, tools, cars, look me up.
I use my real name in the expert category, it is under electrical, but I started in mechanics at age 14 and have worked in either automotive or industrial "stuff" still now at the ripe young age of 55.
There is not much I have not been able to come up with fix for, from ceiling fans, to 5000 HP motors, I have had to deal with something not running right.
And in this environment, it will get to be more and more beneficial to fix what we have than buy new, not a stimulus for new production, but a stimulus for repair parts, suppliers, and the beneficiaries of the saved difference.
So should anything smoke or squall or stop all together, and need some help besides some help desk going down a check off list, send me a note. I will put you at the top of the list with anything I can help with.
Again, much appreciation for all you have done.
Answer This came to me as a follow up question.
I thank you for the kind words but...
unless I am wrong, there is no question here ...is there?
I do wish you the best of luck and let me know how this turns out
sounds like your at least on the right track.
Unfortunately I do NOT know of any CPA's in KC.
You can go to the State Board and if they don't recommend one...
at least you can avoid the bad ones with their help.
I hope you can get some sleep...
I understand crossing wires can have a pretty devastating effect too!
