by melaniepip » Wed Jun 22, 2022 9:43 am
Long story short.
A family member is being made redundant as his boss winds up his Tree Surgery business. They are busy and profitable but the owner has his finger in other pies and has built the training and consultancy side of the business to a point where he feels running a team of lads, pricing jobs, looking after vans and machinery etc... is not worth his time. Fair enough.
My family member is considering going solo and is confident he could pick up a good chunk of custom from his old boss, thanks to a good relationship between them both and the customers - family member is/was the lead guy on site most days so dealt with more than trees.
Unfortunately, he's not got the capital to buy the tools, machinery, van, insurance etc... that he would need to get going.
My position - I'm in a well paid job but not doing something which I want to do forever, so have been setting myself up an exit plan over the last few years with various investments here and there. I know nothing about tree surgery/arborists or even small businesses, really.
My idea, which I've floated with my wife but not with my family member, is that I stump up some/all of the cash to buy the machinery and bits he'd need to get started.
My worry - how can I do this in a way that neither of us get burnt or destroy the family biggrin
I don't want a gentleman's agreement where I hand over £x and just tell him to give me back £x+10% a year... but I don't want to get so legal with it, that I end up running the business or putting (too much) pressure on him.
This must go on every day; what are my options? How could a return be structured? Am I best buying a xx% stake in the business and sitting back and leaving him to it? With a handful of meetings a year to keep on top of things? Or would getting my capital back +x% a year over x years, be better for either/both of us?
Any points I need to consider are welcome. Early days so just brainstorming.