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Still Growing · 01-15-2007, 02:26 PM

Let me commend you on seeking advice for a new venture. Its important and I always do this before buying or starting a new business. Let me give you an entrepreneurial perspective about what you are thinking of undertaking.

Manufacturing: This is really fabrication not manufacturing. A good and efficient manufacturer has a production line whereas with a fabrication business its like a job shop. Each job is unique and so you must make more profit and do less jobs.
Business: Although this is technically a business you are really thinking of becoming self employed.

What are you buying? You said your company is his only customer so there really is nothing to buy but tools. Seriously. I hope you are getting a good deal on those tools because there is really no business to buy there. If the amount you'll be paying him is more than the cost of the tools new then you are overpaying unless he is the one financing.

I think its great you are wanting to move up but your verbage and thought process are really not where they need to be to set up a good deal for yourself.

Heres what I would do in your situation:
1. Get inventory of all his tools. Shop them new.
2. Immediately ask him in writing not to mention this to your current employer. Deals come and go and you don't know if this will work out but you don't want to loose your job in the process. If they think you're leaving they will start looking for your replacement.
3. Negotiate with him on the price of the tools and other assets you'll need.
4. If you are going to pay more than the value of the tools, get him to finance the business over 10 years with no interest. He'll shun this at first but give him more time and he'll come back. If somebody else buys this business let them be the sucker.
5. Get your lawyer to draft an agreement giving you a lot of outs. There is only customer here c'mon.
6. Once you have a offer document that needs your signature for completion then go to your current employer and ask them for their graces. Outline what you plan to do and humbly ask for their continued business. Be sure to ask management or the owner. If they feel good about it and give you the thumbs up you're on

What I have outline above is an example of how an entrepreneur would approach this. This isn't about machining its about business.

People think that a shrewd business person is dishonest. You CAN be shrewd and honest. Doing otherwise would only be dishonest to yourself.

01-15-2007, 02:26 PM	#2 (permalink)
Still Growing Senior Member Join Date: Nov 2006 Posts: 909	Manufacturing Business? Let me commend you on seeking advice for a new venture. Its important and I always do this before buying or starting a new business. Let me give you an entrepreneurial perspective about what you are thinking of undertaking. Manufacturing: This is really fabrication not manufacturing. A good and efficient manufacturer has a production line whereas with a fabrication business its like a job shop. Each job is unique and so you must make more profit and do less jobs. Business: Although this is technically a business you are really thinking of becoming self employed. What are you buying? You said your company is his only customer so there really is nothing to buy but tools. Seriously. I hope you are getting a good deal on those tools because there is really no business to buy there. If the amount you'll be paying him is more than the cost of the tools new then you are overpaying unless he is the one financing. I think its great you are wanting to move up but your verbage and thought process are really not where they need to be to set up a good deal for yourself. Heres what I would do in your situation: 1. Get inventory of all his tools. Shop them new. 2. Immediately ask him in writing not to mention this to your current employer. Deals come and go and you don't know if this will work out but you don't want to loose your job in the process. If they think you're leaving they will start looking for your replacement. 3. Negotiate with him on the price of the tools and other assets you'll need. 4. If you are going to pay more than the value of the tools, get him to finance the business over 10 years with no interest. He'll shun this at first but give him more time and he'll come back. If somebody else buys this business let them be the sucker. 5. Get your lawyer to draft an agreement giving you a lot of outs. There is only customer here c'mon. 6. Once you have a offer document that needs your signature for completion then go to your current employer and ask them for their graces. Outline what you plan to do and humbly ask for their continued business. Be sure to ask management or the owner. If they feel good about it and give you the thumbs up you're on What I have outline above is an example of how an entrepreneur would approach this. This isn't about machining its about business. People think that a shrewd business person is dishonest. You CAN be shrewd and honest. Doing otherwise would only be dishonest to yourself. Last edited by Still Growing; 01-15-2007 at 07:59 PM.