Stay in job versus new business opportunity?

route9

I realise the answer to this will ultimately be 'whatever you want / choose yourself', but would welcome all opinions and input!

Last week I received an email from the owner of a 7 year old consultancy business in the same industry as my day job. I have previously worked as a self-employed consultant in this area, and am very familiar with the business and what clients need, etc. This is a 3-person business doing (as an estimate) maybe 130k in revenue/year. 2 of the employees probably take up about 55k of this in salaries maximum. Profit is relatively small I would say, but perhaps not insignificant.

Anyway, the owner needs to take some time off (for a good reason), and is looking for someone to fill their position of running the business for around a year or more. They may come back into the business at a later stage, but in a different role. I don't yet have specifics on salary, but the deal would be a base salary + profit share. There would be plenty of scope to grow the business, and I would not be doing the 'in the trenches' work of managing client projects, but rather this would be a much more high level owner / manager / business development position, leading the business.

I currently work in a job I like, it has its limitations in terms of career path and it is a company that moves slowly. It does come with a lot of perks and flexibility though, and is one that I am sure many people I know would swap with their own in an instant. I also work with great people and it is a fun workplace for sure!

Having worked for myself before and being involved in a couple of entrepreneurial projects right now, it seems like a tempting offer, but I am not sure if it is the right time, or if I would really want to take it on. A big part of the decision would also come down to the proposed salary on offer, but that is only one element. Another aspect is whether I should commit to such a big new role with one of my own projects possibly taking off over the coming months.

That said, this is a business with perhaps 20-30 clients, and around 10k+ in monthly revenue (as a conservative estimate), with loads of room to grow in a fairly saturated but booming and constantly growing industry. I would stand to gain a lot more financially compared to the very modest increase I get each year at work, and it would be a role with loads of responsibility and would probably represent a great new challenge for me (and one I probably need at this stage).

Any thoughts / advice? All questions more than welcome.

jimmii

Personally I would jump at the chance but I am pretty wreckless like that! How much security do you need in your life? Its a lot easier to take these jumps into the unknown if you have few responsiblities and can't afford for it to go wrong so much. How confident are you that you could grow the revenue? €10k+ a month sounds really low for a 7 year old three person company to be generating how conservative do you think you are being? How much would you need to increase revenue to make it a no brianer and how likely do you think that is to happen?

drunkmonkey

Revenue seems very low, if it only generates €130k a year with tight margins that's not leaving you much of a wage after costs.
You'd want up to date accounts for starters, I'd be suspicious if the owner doesn't intend to take profits or intends to hold onto their share of the business.

Just off the bat I'd say stay where your are, sonds like a sinking ship.

route9

Thanks for the replies!

jimmii wrote: »

Personally I would jump at the chance but I am pretty wreckless like that! How much security do you need in your life? Its a lot easier to take these jumps into the unknown if you have few responsiblities and can't afford for it to go wrong so much. How confident are you that you could grow the revenue? €10k+ a month sounds really low for a 7 year old three person company to be generating how conservative do you think you are being? How much would you need to increase revenue to make it a no brianer and how likely do you think that is to happen?

I have no responsibilities or commitments - quite rare for someone in their mid-30s! However, I do enjoy my job and I'd probably rather build and grow my own projects and entrepreneurial ventures on the side than build someone else's (even if I was to become a key stakeholder).

drunkmonkey wrote: »

Revenue seems very low, if it only generates €130k a year with tight margins that's not leaving you much of a wage after costs.
You'd want up to date accounts for starters, I'd be suspicious if the owner doesn't intend to take profits or intends to hold onto their share of the business.

Just off the bat I'd say stay where your are, sonds like a sinking ship.

I was looking at company account overviews on Duedil - are they fairly accurate? I am guessing the figures must be taken directly from the submitted accounts? If so, yearly revenue is around €150k, but net profit is next to nothing - only around €1k. Not surprising as the bulk of the revenue would go towards salaries.

The idea though is that it would be up to me to grow it, and share in the success / profits. However, the owner would still remain in the business - it's not a sale or anything.

One way of looking at it is that taking on a few additional clients per month could be an extra €5k+ per month on an average retainer - and that's where the growth lies. The owner also has a fairly strong profile and a steady book of business with a continuous flow of leads.

jimmii

route9 wrote: »

I have no responsibilities or commitments - quite rare for someone in their mid-30s! However, I do enjoy my job and I'd probably rather build and grow my own projects and entrepreneurial ventures on the side than build someone else's (even if I was to become a key stakeholder).

I think that is your answer so!

route9

jimmii wrote: »

I think that is your answer so!

I was thinking that as I wrote it jimmii! It might be a good opportunity, but I would rather be a co-founder of business than a partner who arrives much later on. However, my main side project is one that could take some time to take off, if it does at all (won't be for lack of effort though!).

Whereas with this opportunity, it would be more slow but steady, but could grow very nicely over time as it caters to a proven need in a growing industry. Plus the owner has already done all the groundwork, and so it could be a great time to join. I would also be getting away from a lot of the tactical work I do in my current role.

DubTony

150K a year is very little in anything but a one man show. I'm not concerned about net profit. Gross is a better indicator for me in this scenario. Your only option here, if you take it, is to grow the business. On that basis, how much ground work has been done over what period of time?

If you jump in here you'll be building somebody else's business while he's away. Wouldn't you just as well build your own similar business in the same industry?

Questions to ask. Where will you stand when he returns? What's the role he'll take upon returning? Is that guaranteed? If you're running it, will the salary and commissions remain the same when he gets back as I'm sure he'll want his wages back?

jimmii

route9 wrote: »

I was thinking that as I wrote it jimmii! It might be a good opportunity, but I would rather be a co-founder of business than a partner who arrives much later on. However, my main side project is one that could take some time to take off, if it does at all (won't be for lack of effort though!).

Whereas with this opportunity, it would be more slow but steady, but could grow very nicely over time as it caters to a proven need in a growing industry. Plus the owner has already done all the groundwork, and so it could be a great time to join. I would also be getting away from a lot of the tactical work I do in my current role.

It would be a lot more rewarding to start it yourself alright. This sounds more like just a regular job but with the top seat really. Much better to be the real boss!