Working as an employee in the business prior to being owner/operator

by a searcher from University of Minnesota - Twin Cities Campus

1 month ago

Hey there,

I'm looking at a business that's got a favorable valuation (400k SDE @ 1.8x), however that may in large part be due to the fact the owner is highly involved in many aspects of the business.  I've heard of some individuals acquiring businesses by arranging a period of paid employment where the buyer works in the business to learn operations and gradually take on owner responsibilities until taking full ownership. 

Does anyone have any insights or experience with this kind of structure or arrangement?

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searcher from University of Minnesota - Twin Cities Campus

Thank you all for the incredible insights, much appreciated.

1 month ago | like reply | 0 likes

searcher

I am looking at something atm and plan to put 'my guy' in for 3-6 months prior to completion. This will: - help me with diligence; - shorten the handover period post completion; - hopefully sow the seeds of growth early so it happens shortly post completion. I need to convince the Seller to fund the salary but think it is a no brainer as it shortens the handover period

1 month ago | like reply | 0 likes

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