Give up my business?

[baseline]

So here is the dilemma; I’m being offered a chance to give up my 13 year business for a position with a fairly high salary. The position, as it's described to me, is really what I was trying to build my own business into; I would be doing marketing and management, while training others.

There are, of course, the obvious upsides;
I would get vacations that I could actually take.
I will get sick time, and employee benefits for the first time in 15 years.
My position would be focused on managerial and marketing aspects, which are what I enjoy at this stage of my career.
I would get technical and support staff that I currently do not have.
I would no longer have the sole responsibility for anything that occurs with my business.
Someone else would be sealing the documents. For me, my professional and possibly personal liability would be reduced.
I would no longer have to personally guarantee all loans for my business.
The salary would be almost as much as I have paid myself during some of my best years. It would be substantially better than some of my worst years.

The obvious downsides are as follows;
I would be giving up my business without selling it. At this stage of my business, it really isn't anything that I could sell. But I am in the middle of my five-year plan to make my asset into something that could be sold.
While I would have to answer to senior management and ownership of the company, I would be left more or less on my own. This is then a sink or swim situation, if my marketing and managerial skills do not meet their expectations.
There is always the chance that this new firm is trying to hire me to steal my clients, and to then fire me. I don't believe it's likely; but it is possible.
I would have to commute again; and this company will not reimburse my mileage for the commute, just for work-related activities. In addition, they will not provide me with a vehicle which my company provides to me as part of my duties. While I could try to “schedule” some marketing close to my home at the end of the day, it was made clear I should be managing my field staff in the office at the start and end of the day.
Since they will be paying me a high salary for my position, future raises and bonuses are probably not going to be of a large nature.


And I guess the reason I'm not jumping at the chance to do what I'm trying to do anyway, is the ego involved of being an owner. It also seems as if my possibilities would be limited; for future business deals, development plans, commercial real estate ownership, and things of that nature. In my own business I can schedule my time to at least look at potential deals. For someone else, I would not have that same latitude. And one last factor, I am looking at; I'm almost 50. In 10 to 20 years, I plan on being retired from this industry. I will probably still be involved in business, and this may open doors to other opportunities that my current small business doesn't allow me to. Then again, it may not.

I know this can be viewed as a risk/reward scenario, or it could be looked at as security versus risk. I am trying to view this objectively, as I do spend a lot of time, including weekends, reviewing books and AR’s and ongoing projects. The new position would probably eliminate a lot of the weekend work that I do. As my wife says, I might actually have a life again.


Thoughts? Additional questions? Things that I may be overlooking?

[ChipN]

I don't know what business you are in, but is it something that you could go away for a year or two and then come back later if necessary? That could be a possibility, depending on the type of business and your clientele. Is it something that you could maintain on a part-time basis (assuming there are no conflicts with a non-compete agreement). Speaking of a non-compete agreement, what happens if they terminate you? That's something you might want to get spelled out up-front.

Since you are still personally guaranteeing loans it would seem that either you are a sole proprietorship or partnership, and/or the business has not been very successful in terms of growth and profits. No offense intended - just trying to look at this objectively. You are working on a 5-year plan, but there is no guarantee that it will be successful. On the other hand, the things that you learn at this company could be used later in life to create a more successful company.

Good benefits are expensive, and only get more and more expensive each year. Having a team to follow your lead and support you should be very beneficial. Worrying about things like business deductions and mileage are a deal killer IMO - and really a big part of the problem with hiring people who have been indepenedent contractors or business owners most of their life. They focus on the little things and completely miss the big picture. Instead of thinking about "small raises," think about potentially large increases and promotions as you exceed all expectations and amaze everyone.

Dream big, be confident, invest extra time in yourself and the new job to be the best that you can be, and get along with people. The job will probably be far more challenging at first than you expect, but once you settle in it will probably be far more rewarding than you imagined.

Just my $0.02, but based on what you are telling us it seems like the approach that I would take if I were in a similar position.

Best wishes either way!

[bill benson]

I'd factor your age into the equation. If you are fairly young and the position could lead, not only to short term gains but retirement, that's great. If your 50, you could work for 15 years, get laid off, and take very little into retirement. With a business at 50, if the business is viable you won't get fired in 15 years. If you are 25, you can take a chance for 5 years with no long term setbacks.

[eborg9]

I think it depends on where you are now.
Have you been able to build a little nest egg, maybe a retirement, or are you still on the upswing?
Can you do a little moonlighting on the side, keeping your business for extra income?
Is the contract with the offer "Phat"? (Good Money and "Bennies")
Is it more than you are making now, with steady raises?
Is there protection from lay off or downsizing?
Is there a severance agreement?

That is what I would look at. If things don't work out, do I get any cash, or will I be job hunting and kicking myself for giving up my business?

[baseline]

Whoops.... a little more background.....

I've been successful for all 13 years as an S-corp- I went 5 years in the middle as a lone eagle Land Surveying Firm by choice. And since a large part of why they want to hire me is my clients that I've had for the last 10+ years, there is no non-compete clause. If they fire me- my clients will probably follow me. So yes, I could start up again, although I would have to purchase equipment again. But that has to be updated and replaced on a regular basis anyway- in 3 years what I have will be old stuff, and possibly not supported.

At least around here, all of my friends with a surveying business have to gaurantee loans; even with 20 years of over 500k in revenues. There is no collateral in a consulting business is what we are told.

And it is a"phat" deal; at least for my field. Latest salary surveys place it in the top 10%. And I have a good deal put away- and have more equity in my house than I owe on it. I keep 6 months living expenses in a liquid account- and have ira money as well. But my salary as a self-employed guy does fluctuate; I've made more, I've made less. More lateral a move as far as salary goes; the biggest thing I lose is selling my business, if I should retire. And its saleability will depend on staff, economy and oppertunity. Most of my friends that sold got much less than they were hoping for.

Good stuff- thanks!

[leatherneck]

simple equation: Like being your own boss + controlling your own destiny + working hard for yourself instead of for some one else+ etc,ect= success!!!!!!!

Mak.

[eborg9]

Originally Posted by baseline

Whoops.... a little more background.....

I've been successful for all 13 years as an S-corp- I went 5 years in the middle as a lone eagle Land Surveying Firm by choice. And since a large part of why they want to hire me is my clients that I've had for the last 10+ years, there is no non-compete clause. If they fire me- my clients will probably follow me. So yes, I could start up again, although I would have to purchase equipment again. But that has to be updated and replaced on a regular basis anyway- in 3 years what I have will be old stuff, and possibly not supported.

At least around here, all of my friends with a surveying business have to gaurantee loans; even with 20 years of over 500k in revenues. There is no collateral in a consulting business is what we are told.

And it is a"phat" deal; at least for my field. Latest salary surveys place it in the top 10%. And I have a good deal put away- and have more equity in my house than I owe on it. I keep 6 months living expenses in a liquid account- and have ira money as well. But my salary as a self-employed guy does fluctuate; I've made more, I've made less. More lateral a move as far as salary goes; the biggest thing I lose is selling my business, if I should retire. And its saleability will depend on staff, economy and oppertunity. Most of my friends that sold got much less than they were hoping for.

Good stuff- thanks!

I would do it, and get the time off to spend with your family. Sounds like you can have the best of both worlds.

[Toolman]

Contrary to the beer commercial... you really can't have it all!

I left one business about a year and a half ago, to take a job with another company. Yes, it was a different field, but "similar." The reasons that I gave myself was the security of a job (even though it was pretty much straight commission), paid vacations, retirement, none of my own personal equipment to maintain, and the potential to make just as much money as I was making, with none of the expenses.

It was a disaster! Maybe it was the company that I went to work for, I don't know, but nothing materialized as promised! The training to assist me in my transission that I was promised was not there, there was a general lack of motivation... let's just say it was not the best six weeks of my life. I knew quickly that it was a mistake!

I still had all of the basic equipment from my business, and another company wanted me to be a dealer for them, so back into business I went. Yes, I work hard, yes, I work a great deal of hours, and did not have a vacation last year, but I was certainly happier!

I would be inclined to give you the opposite advice that some have given here. If you truly enjoy operating your business, and being the owner, or the "boss," you will be miserable working for someone else! Just the flexibility of your scheduling is worth a great deal. You mentioned being expected to be there at the beginning and end of the day... that will become very annoying to a person who is used to setting his schedule.

An example... we were expected in the office around 8 in the morning. Many times, I made a sales call on the way in, so may not have arrived until a half hour later or so. You see, I had a laptop computer, mobile internet access, and the like, all leftover from my business days, so I was just as effective on the road, or at home (more effective!) than at the office. Most of the people I worked with did not have that equipment, and were not used to working on their own.

One day, I was coming to the office, and my wife called to say that she had a flat tire on the car. I drove home, changed the tire, and drove back to the office. I arrived at about 8:40 AM. I had a note placed on my desk, "How was your morning?" That was about the last straw.

My gut instinct is that you will be very unhappy if you do this. Yes, you will have to continue to guarentee your business loans. It is not the norm in just your business, but in just about every small business. I know, people on here say, "form a corporation, build credit in the corps name," but they need to live in the real world. You will have all of the responsibilities. But, you will also have the flexibility, and it will be up to you alone to make or break it.

All of this pay and benefits can go away in a moments notice, I don't care what they promise! And, you have to wonder how they are really going to be able to pay you more consistantly. You see, even working for someone else, you are really in business for yourself.

I verry strongly say that I would not do it.

[Steve B]

It's obviously a very personal decision.

For me, I'd eat cat food before I go back to a corporate job.

[baseline]

Good stuff- and these are the type of responses, pro and con, that I'm looking for. Keep 'em coming, folks! And thanks- I'll psot more later.