One of the best things you can ever do for a business you buy is keep the original owner on board, and running things exactly as he was before.
The only question is, if an owner does stay on, what do you offer him as far as salary, benefits, stock, etc?
Well, I dont know what the percentage has been in the last ten years, but probably over 50% of the owners of the businesses I've bought have stayed. Now, these owners have all gotten cash -- X number of million dollars when they closed out. A lot of them were making $300,000, $400,000, $500,000 that they were paying themselves in salaries, plus other money they were taking out of the company. So, theyre making a couple million dollars a year.
Now, when you go in there, all you have to do is find out what the going rate is for somebody running a plant like you have and, 99 times out of 100, youll find the owner will be happy with that.
Why?
Because hes going to have $1 million, $5 million, $10 million sitting in the bank and hes just not going to get all that hung up on the money.
In fact, do know what my range has been in the last few years? Were paying our managers $150,000 to $200,000 a year. The managers of manufacturing companies do very well. And again, the average person thats going to stay to work with you will think thats very good. And since you're keeping the original person in who made the business successful in the first place, making a ton of of money from the venture will be as easy as taking candy from a baby. |
