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Negotiating Business Deals/Offer from small business



I recently received an offer to be the number two employee at a former coworkers new small business. He had been running it for a couple of years now and the revenue has grown from 500k to 1 mil this past year.  I am confident in the product and I think the business will continue to be successful.  The offer is to match my current base salary and then pay a bonus of 3% for direct revenue and 1.5% of indirect revenue for the next 5 years; the goal is to reach 10 mil in the next 5 years.  Also, he has offered me 10% of the company if I sell at least 250k per year.

Is this reasonable?  Should I try to negotiate a little more?

Currently I have a stable job at a large corporation and I have three children under age 10.  I obtained my MBA in 2010 and I think this would be a great opportunity to put those skills to work; however, I am a little concerned with the risk involved.

What should I ask for prior to accepting the offer?  Would it be acceptable to request a balance sheet and income statement for the company?

Any help is appreciated.


It appears to be a rare opportunity. Given your confidence in the product, you need only secure the offer via contract AFTER confirming what you think of the company's performance. This can only be done by reviewing the financials which you certainly must do. If the owner is reluctant, that is a huge red flag.

I understand your concern at giving up "stable" employment. That said, you have the education and experience to recover if it goes awry. In my life, the only regrets I have are about risks I didn't take. Anything I tried became a success because I made it so.

While you might be able to get additional considerations, the only questions are; 1. Is this a better opportunity than my current one? and, 2. Are the risks worth the reward?

If you are to become a "partner", I suggest you think like one NOW. Get an attorney involved, study the financials and negotiate an ironclad contract.

I wish you all the best!


Negotiating Business Deals

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Gary Bell


I have an MBA and 35 years of executive business experience. I can answer questions about negotiation tactics, proposals and general business issues. I am particularly interested in small business planning.


I am a career healthcare business professional with many years of execcutive experience.

MBA, Finance and Marketing

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