Buying the Business

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Has anyone ever bought out a business? My boss wants to sell me the business, it is incorporated, and I'm thinking pretty seriously about buying it.I know how to value it and figure the capitalization of earnings, and what I all I need to look at, and already have an attorney lined up to help guild me through this, should I decide to do it. I know most buyouts are generally done over a three year period, but I don't know how it works. I have an idea but nothing beyond that.If anyone can help I would like a general idea before I go talk to attorneys, accountants and whoever else and look like an idiot. I've searched the net and found some helpful info but not exactly what I'm looking for. My questions are far more basic.Here are my "business for a moron" questions.- I assume I'm not going to a bank for anything since I'm buying him out over a three year period, is that a correct assumption?- If I'm not going to a bank how exactly am I paying him? - I know I'm buying shares of his company but with what?- Am I working basically for free for the next three years?- I know as I acquire shares of the company the profits I would receive go to him to buy more of his shares but were does the initial bank role come from to get the ball rolling?- I guess what my questions comes down to is will I have any income left while undertaking this buyout?I know all buyouts are different in their intricacies but if you could enlighten me to the generalities at all I would appreciate it. Even search results with this info would be great. Maybe you could find a different way to word the search and get better results than what I have.Okay business student put that business class 101 to good use and help me out. Thanks

Since it's incorporated, there will be shares. Essentially you are buying these. It's similar to buying anything else - you agree on the price, and you give him the money, and he gives you the shares. There are however complications in that the share ownership may have to be registered, and there may be legal requirements over the takeover, especially if there are other shareholders - this is why you need legal advice, and it's no shame not to know the niceties of your state's corporations law.If you're doing it over three years, it needs to be arranged between you how that is to be done. This is not such a common arrangement. Are you going to be buying some shares at various times so they gradually transfer from him to you? Or is he thinking of some sort of hire purchase? Or a sinking fund, where you put in value until it pays for the shares? Remember that whoever owns the majority of shares effectively controls the company, including what dividend there is. You definitely need to have a binding written agreement, and you definitely need legal advice to make sure your interests will be protected in case he has second thoughts. If there's a sinking fund it should be managed by a third party.Whatever you do, the agreement MUST be in writing. 'Gentlemen's agreements' start off with a cordial handshake and expressions of great goodwill, but always end with differing ideas of what was agreed.

Thanks for the responses guy. I do have an attorney lined up and ready to go when I get the offer to buy form my boss. Hopefully I get that, so I know exactly what he's looking for, within the next few weeks. I just had (have) no idea where it all starts.

I read this thread yesterday, i wanted to help ya out, but what can I say, I couldnt, still cant, Im inteh same boat as you, prolly even a shittier one, I have no clue what it takes or how to go about it. Thought I may be able to help after I talked to my buddie who bought is former work and now owns the shop, but he got a loan, used the business as collateral, and bought it out right and all the equipment so ti was all done, no buy out over time no nothing a price was set arrangments were made and hes now paying off the bank that owns his business.Good luck Scotty

I dont need any answers :P I was jsut trying to find a way to help out scotty, I own my shit from day one, I started my busioness from scratch. My buddy bought the garage he worked at as the manager, that deal is already done. however, scotty shoudl look into SCORE he is the only one I know of currently in this situation.