New big business!

[shina-men]

Hi Detail City! I am a new member and so far it has been a pleasure reading these professional forums from professional people.

Well, i would like to get a professional oppinion so here it is. I recently started my own detail business, and it is mobile. I was planning to stay mobile until i accumulated all the clientle i needed to open up a fixed location out where i live. I figured this would be about another year or so. It so happens that now i just been offered a business deal with another company (i cant say) to merge together. It is not another detail busines, an auto restoration company doing classic muscle cars to new cars. He wants me to run my business while providing him with service to his cars and customers. On top of that he will provide me with a fixed location out of his shop, marketing, expansion with extra work vans. He will provide numerous accounts that already needs service from his business.Heres the kicker, It will be split 50/50 profit. Yeah, does everyone think this is a good idea? Your input would be a blessing. Thanks!

 

[sellncars]

Hi Detail City! I am a new member and so far it has been a pleasure reading these professional forums from professional people.

Well, i would like to get a professional oppinion so here it is. I recently started my own detail business, and it is mobile. I was planning to stay mobile until i accumulated all the clientle i needed to open up a fixed location out where i live. I figured this would be about another year or so. It so happens that now i just been offered a business deal with another company (i cant say) to merge together. It is not another detail busines, an auto restoration company doing classic muscle cars to new cars. He wants me to run my business while providing him with service to his cars and customers. On top of that he will provide me with a fixed location out of his shop, marketing, expansion with extra work vans. He will provide numerous accounts that already needs service from his business.Heres the kicker, It will be split 50/50 profit. Yeah, does everyone think this is a good idea? Your input would be a blessing. Thanks!

Just wondering, what else does he have to offer you? Does he expect 50% of your existing business?

I read your post twice and it seems to me that he wants you to run his business out of his shop, take care of his customers, use some of his vehicles. Who would provide all of the materials, buffers, other shop tools? Would you have to cover 50% of his shop bills? Electric, heat, water bill, etc, etc??

Sellncars

 

[shina-men]

I forgot to mention all i am putting in is 3,000.00 and he is putting in 3,000 to get the detail side up and running, and no i dont pay any electrical, phone, heat, water bill. No he does not get 50% from my existing business. He runs his own shop, but he does not have an in house detailer so i am getting payed from him for servicing his business. He's offering a 9 million dollar facility to work out of, support in marketing and promotions. The tools and supplies is on me because it is my business. And whatever he contributes will come out of his pocket.

 

[Schuma Detail]

Hi Detail City! I am a new member and so far it has been a pleasure reading these professional forums from professional people.

Well, i would like to get a professional oppinion so here it is. I recently started my own detail business, and it is mobile. I was planning to stay mobile until i accumulated all the clientle i needed to open up a fixed location out where i live. I figured this would be about another year or so. It so happens that now i just been offered a business deal with another company (i cant say) to merge together. It is not another detail busines, an auto restoration company doing classic muscle cars to new cars. He wants me to run my business while providing him with service to his cars and customers. On top of that he will provide me with a fixed location out of his shop, marketing, expansion with extra work vans. He will provide numerous accounts that already needs service from his business.Heres the kicker, It will be split 50/50 profit. Yeah, does everyone think this is a good idea? Your input would be a blessing. Thanks!

It honestly only depends on what YOU want out of such a deal. A merger isnt the only option by far. You ought to read more into the deal. I know of one great merger deal between two car dealership groups, which now basically makes the Barbagello's Group, making up of Kia, Jaguar, Audi, Masereti, Ferrari, and Land Rover (where I used to work lol). In that merger, basically each group sold 50% of themselves to the other, so that for example, you own half of his business and he owns half of yours. I would honestly say that if your want in this was a simple way to make quick money, then I would tell you immediatly that this deal is great.

Personally, I wouldnt be open to merging with another company, because I value my right to expand the way I want it to, and I love having the controlling interest in my business. I wouldnt like it as much if I had someone looking over my shoulder all the time. For now, it seems that the deal is better for him. (He gains a great service and half the profit that doesnt exist so far!)

If I were you, and soley, if I were in your situation, this is my opinion on what to do. If it is such a legitamite deal, why cant you both keep your business's, but work closely together? You could provide the services he needs to him, and he could keep the customers rolling in for him, making him a slight profit on whatever detail jobs he sells. Im not so sure on your situation, so. Really, its a great opportunity depending on what you really want out of the business. I can already see that its a great deal for him.

 

[shina-men]

Thank You, for your advice. I will closely re-evalute on the situation and hopefully come up with a right decision for my business. Thanks!

 

[joburnet]

I did something similar to what you are talking about with a used car sales business and ended up regretting it.

Basically what happens is that he owns the shop. If he wants to dick you over, he can. All you can do is try to fight back legally but that is very costly.

What I mean is that once you get up and running and profitable, he can start charging you rent. Then he can up the rent. If you don't like it you can leave, but then you have lost everything that you have been building. I'm not saying that this guy will, but he can. If his business starts to lose profitability, which happens a lot with small businesses, guess where he's gonna start looking for more income.

This exact same thing happened to me with two "good christian" guys that wanted to start charging me back rent for a bay that I had been using to repair cars that they said I could use for free. Just one day said hey, you owe me $3000. They ended up taking a $2000 loan I gave them for them to use in their business. I could fight back, but it would cost $$$ and take up so much of my time and effort that it's not even worth it.

My suggestion, don't do it. I would say run your business and if he wants you to do a lot of details for him then maybe you can give him a discount, but don't merge your businesses. Just my opinion.