So anyone CAN sue anyone for anything… whether they win or not is up to the courts to decide…

She CAN issue a charge back… you can also dispute it as a vendor and having a photo of the item on her doorstep is going to make it a lot harder for things to go in her favor.

I’m not quite sure how to vent my frustrations to my father on what he could do better.

Instead of assuming your vision is better, ask why they are done the way they are, and if you aren’t convinced, ask what he thinks about your idea… if he’s as good of a business man as you think even if he isn’t open to the idea of change he will be able to give you clear reasons why.

What’s the hardest part of taking over the family business?

Beyond that, its a LOT harder to tell your father to get out of your way if they don’t want to, as you now have to deal with family relationships… Similarly its a lot harder to not give your brother a job even know he’s high all the time and doesn’t show up on time or at all, and isn’t effective at work…

As an outsiders perspective from some one who has been trying to buy businesses recently… There is also often a lot of unrecorded effort/hours that happen between family members… If you were a skilled employee that was underpaid by your father, don’t expect the person you hire to care about that job the way you did, or work for as little money or be willing to work overtime as often, or whatever else that just doesn’t fly in the normal working world…

In the same vein if your father is working 12+ hour days to make the business work and you are also putting in that kind of time… expect to have to hire not just one replacement, but two or see a significant drop off in output…

Prime is 8.5% currently so unless you have a prior relationship with a lender or get lucky shopping around I wouldn’t expect much

So only if you personally guarantee the business’s debts or do something very wrong fiscally…

Unless you personally guarantee a business loan your personal finances and your business finances are completely separate… your business can file bankruptcy and not affect your personal finance… though it can be incredibly hard to do as many loans are hard to get for unknown small businesses without a personal guarantee…

That being said I still agree - don’t do it… for all sorts of reasons, and talk to a lawyer.

This sounds like a scam and a good way to get sued or end up in jail when your “millionaire friends” do something illegal with the business and then use you as a scape goat as your name is on all the paperwork…

That’s why I said the A/R was a bit of a red flag… because without it they are operating at a -100k loss… I’m betting that big chunks of those A/R are uncollectable without a lot of effort… the numbers as presented just don’t really add up to a million dollar valuation… either the business is worth Millions of dollars or not very much money really at all… but at a Million dollars it feels wrong…

Thats also a good question, if it’s showing negative EBITDA, how can value be determined? They are still generating $6m in 2023.

This is why I suggested experts speak up, there are lots of different ways to value a business… cashflow is just one of them… there are some industries like tech that rely heavily on speculation that you will eventually create a new market… There are other industries like certain types of commercial real-estate where on paper a business might be operating at a loss, but using things like depreciation and creative accounting to actually be running in the green… Cash flow is just the most obvious and obvious way to look at a business… its pretty easy to understand that if you are buying a business with negative cash flow you are buying one that is losing money today… and if you are buying one that has positive cash flow then they are gaining money today, and even if all things stay the same its easy to get figure out how quickly you will see a return on investment…

From the AR account, 900K is in the 1-30 days old. The rest is 30+. I agree, I cant value the entire AR dollar for dollar.

So the great thing about Business purchases is they are very flexible… you can write up a simple contract that amounts to “in return for 1MM I get ABC Roofing Company”… but you can also say “I will take posession of ABC roofing company on date X, in return I will transfer 300k up front, the other 700k will be transferred pending on the following A/R milestones over the next 90 days”… there are dozens of ways to write something similar into an agreement, and just negotiating it into your contract will often let you know if the accounts receivable is something you need to worry about and a red flag meant to prop the books up… or if it isn’t a problem and just how the industry works as some one else suggested…

You’re making a lot of big claims based off very little info.

And that’s why I started with "some one who’s a subject matter expert can come in and tell me I’m wrong.

I’ve spent the last year and a half selling my business and buying 3 different businesses and I make “at a glance” valuations on businesses based primarily on net revenue/cashflow…

Negative cash flow is not even close to the same thing as a loss.

Generally speaking the definition of operating at a loss is that you have a negative cash flow… on the books this means the business is losing money… you might be able to fix things but that’s not how things are right now, it might be a slow bleed and you might have a big bank account… but those are the numbers…

There are certain types of business that can do some accounting tricks where on paper they operate at a loss but in reality they maintain a profit… but if you aren’t already well versed in those worlds (Commercial real-estate for instance… it is very easy for taxes, commissions, and brokers fees to eat up most or all of your profit especially if this is your first venture or if you are an outsider without a mentor showing you the ropes and helping you watch for pitfalls…

There are also other ways to value a business… but a lot of them get complex and very speculative very quickly so its not the type of thing you give advice about over the internet…

It would also be extremely normal to not get paid for 60-90 days if they’re doing commercial projects or getting paid through insurance companies.

Absolutely there are lots of businesses that operate at net 60 or net 90 or even net 100+… but its still a big risk to have a quarter of your A/R sitting in unreceived A/R even assuming you were net 90 that means the business isn’t exactly growing… Having your purchase agreement acknowledge it is just acknowledging the risk… Having a line that says “X% of the agreed upon 1MM will only be released if 75% of the outstanding A/R is cleared within 60/90/100 days of purchasing the business” is a very reasonable milestone and should throw a whole bunch of red flags if the seller isn’t open to it, because it means they don’t expect to collect that money in full in a reasonable amount of time for various reasons…

So I’d say a few things, and some one who is an expert in roofing can call me out but…

First based on the fact that the business is operating at 90 days behind and at a 100k loss… you are overpaying by a lot… unless you have some genius plan, or have created a very detailed set of terms that mean the seller only gets his money if the business succeeds this seems like a very bad deal to me…

Collectors buy outstanding debt for pennies on the dollar… so 1.4M in AR is worth between 140k and 300k in value given the company’s track record for not recieving payment within 30-60 days

Then there is your business plan… finding 270k/month in fat in a business with 14 employees and 6m gross revenue means very drastic changes to the core of the business. Unless you are an expert in the field this is a very high risk proposition… you are paying 1 million for a business that might be on the ropes, but longterm successful business, only to make drastic changes… cutting 270k/month means cutting half the costs in the business, which means you think half the costs in the current business don’t provide any significant value… which begs the question… Why are you paying such a premium for this business based on EBITDA? since it is currently showing a loss?

Look at commercial real-estate listings… you might find them as businesses for sale as well but it’s basically commercial property where the parking spots are your rent.

Talk to an immigration lawyer… there are several visas, and their requirements are all vastly different depending on what type of employment you are offering… Some are a pathway to U.S. citizenship and so are harder to get (H1-b)… others are only temporary work visas and have other requirements… Some are the result of specific treaties with specific countries like Canada/Mexico (TN), others are specific to circumstance

So I’ve seen this done a few ways… My favorite is to track overtime hours, and give employees time in leu, usually up to a certain maximum. I do this employees are allowed to bank up to an extra week of vacation using overtime.

I also encourage performance based profit share/bonuses for all salaried employees… This rewards people who put in that extra effort, if indirectly as if you are working over time it is usually for a critical highly visible issue/project, and if it isn’t then you probably shouldn’t have been asked to stay late.

Honestly I’d see it as a way to trim the fat… make sure your client relationships are top notch especially with your top 20% performing clients… and if a couple of fired ex employees lure a few of your cheapest/worst clients over… good for them, that frees up your calendar to find some better paying clients, and some new less toxic employees…

So I would say a few things…

First Time in a position has very little to do with whether some one is deserving of a raise… That doesn’t mean he doesn’t deserve one, especially if he hasn’t gotten one in years…

You don’t really go into what he does, and because “odd job doer” isn’t exactly a career path its going to be hard for you to pull up employment statistics on sites like Glass Door or government databases… The closest comparable is Virtual assistant or Executive Assistant which is going to be a wide pay range depending on what “odd jobs” entails, so not very helpful…

Frankly based on the performance comments and the odd jobs comments this sounds like a position that you have created just to help your office manager out and if you wanted to lose it, you could… The real question is, if you lost this person, would your office manager quit too…

I would comment that you seem like you are making a lot of justifications about this employee that contradict each other… For instance, You say the employee isn’t very skilled/competent at their job, but you give them a significant$4k bonus every year… and have given them small raises in the past… If they were truly incompetent you wouldn’t be looking to offer them more of your money, you would be looking to get rid of them…

Even if they started at an outragous figure, and got there with bad math and bad reasoning, You need to figure out what the employee is worth to you and what it would realistically cost to replace them when they quit… That number might only be the $18/h that they are being paid all things considered… its up to you, its perfectly reasonable to say "I can hire an overqualified VA to replace 90% of your role for $10/h, and let other people pick up the slack on the other 10% so if you want to quit there’s the door… Its also ok to say "I like you and your wife and you’ve both been with the business since it started, so while I can’t give you a $10 raise, I can find $2 but you are going to have to start learning some extra skills and developing some more competencies…

Frankly if you don’t have a passion for a business idea already but just want to make money… I would buy an already successful business with 100k, something that has been around for more than 5 years and already has customers so you are much more likely to succeed with that initial investment.

But as the current top post says… 100k can go 100 ways you need to know what you are looking for in a business and what you want to put in to know where to start…

So… I’ve learned over the years with friends and family “discounts”. Don’t.

If you want to bring some of your product as a gift at special events… awesome! But that is going to be extremely dependent on your product/service…

However, a good family member or friend trying to support your business isn’t going to use you as a cheap service… they will be happy to pay full price if they need your product/service on a regular basis, as they will be happy to see you succeed over a competitor (assuming you are good at what you do)…

I’d say a few things…

First, its ok to feel shitty firing some one, it should never be a “Great” feeling, even if you aren’t their friend, unless they are acting maliciously you aren’t really going to be happy about it, its just something that is necessary, either because they aren’t pulling their weight, or because they are too much of a liability in one way or another…

Its good, even great to have a sense of camaraderie with your coworkers and even for people to be friends with eachother, you spend a third or more of your day there, you should at least try to spend your day with people you respect even if you don’t like them all…

However, as a person in a leadership position you need to both be hyper-aware of how much your authority over your team affects the relationship, “Hey can you help me after work”, can feel like a request to a friend from you, but a demand to your employee… and because of that awkwardness, what can feel like a friendship to you, can just be an employee being polite trying to keep their job.

Does this mean its better to be removed/detached… not necessarily… it might make it easier to fire some one, and prevent your feelings from getting hurt as badly when you do. But having leadership that genuinely cares about their employees and doesn’t just see them as robots, or act fake polite… is how you are going to attract the best quality employees who genuinely care about your business and you, because they know you want them to succeed as well…

Red flag? not really, lots of owners are worried that their staff is going to exodus if they think new owners are taking over…

That being said, especially for smaller businesses, employee turn over is going to be one of your bigger risks… buying a business and having half the staff quit in the first 3 months can easily mean all the value in the business is gone… It’s a good idea to write up your terms/contract with that in mind so you don’t pay a bunch of money for a lemon.

You have to pay what your employees are owed… borrow it, pay it out of pocket, sue your clients… Unless you are claiming bankruptcy and shutting down the business expect to pay payroll.

It is best to pay it up front rather than wait for a labor lawyer and the government to come after you because they will look for damages, at which point it won’t just be a few hours of unpaid PTO, it will be tens of thousands per employee, plus any lawyer fees you need to deal with…

Other people suggest lawyering up yourself honestly unless you think you have a way out of paying your employees legitimately this is probably just a waste of money… but a conversation never hurt anybody if you already have a lawyer on retainer.

I always wonder where the liability lies if an axe bounces wrong and hurts some one badly, or if a customer just misses one of the targets and destroys something…