New Concept for Current Employer

NaiveMelodies

Hi Folks,
I have stumbled across a new but very successful concept that has grown in the US and the UK in the last year or so. I have spent the last number of months crunching the numbers in my own time and I simply cannot see how it can not be a profitable venture in Ireland. I'm sold on it, basically. I've drawn up a business plan and bought a couple of domain names to suit.
After much humming and hawing I've brought the idea to the attention of the owner of the business I work for, who is very interested and wants to meet up to discuss. One of the main ideas for the concept is supplied by my employer. However, the concept is targeted to a market we don't deal with. The specific market ultimately doesn't exist in Ireland, yet.
I would like to, and am capable of, taking this project on, while using the resource available to me in work and adding it to my current role.
In an ideal world I would like a percentage of the sales as opposed to a salary increase.
I would also like an option to buy the business idea out at some stage..(it would more than likely involve registering a new business)..

So, with that in mind.. Would anyone offer any advice on how to approach the meeting? Has anyone been in a similar position? Thanks in advance.

Pelvis

Your employer already has the product/service, you are just proposing a new market?

% of sales = commission, that sounds like a normal expectation in your role, depending on what % you have in mind. As to the second part, why would your employer agree to allow you to purchase the new division in the future? That sounds like a non-runner from the get go.

NaiveMelodies

NaiveMelodies wrote: »

Hi Folks,
I have stumbled across a new but very successful concept that has grown in the US and the UK in the last year or so. I have spent the last number of months crunching the numbers in my own time and I simply cannot see how it can not be a profitable venture in Ireland. I'm sold on it, basically. I've drawn up a business plan and bought a couple of domain names to suit.
After much humming and hawing I've brought the idea to the attention of the owner of the business I work for, who is very interested and wants to meet up to discuss. One of the main ideas for the concept is supplied by my employer. However, the concept is targeted to a market we don't deal with. The specific market ultimately doesn't exist in Ireland, yet.
I would like to, and am capable of, taking this project on, while using the resource available to me in work and adding it to my current role.
In an ideal world I would like a percentage of the sales as opposed to a salary increase.
I would also like an option to buy the business idea out at some stage..(it would more than likely involve registering a new business)..

So, with that in mind.. Would anyone offer any advice on how to approach the meeting? Has anyone been in a similar position? Thanks in advance.

Set up a separate ltd company with you and your boss 50/50 shareholders. Or another share structure depending on who is putting what into it to reflect that. Option to buy the company out later - you will just look silly if you ask that question, asking for a percentage of sales you would be undercutting yourself massively.

NaiveMelodies

Pelvis wrote: »

Your employer already has the product/service, you are just proposing a new market?

% of sales = commission, that sounds like a normal expectation in your role, depending on what % you have in mind. As to the second part, why would your employer agree to allow you to purchase the new division in the future? That sounds like a non-runner from the get go.

Thanks for the quick response and advice.
My employer supplies a minor component of the service. I could easily source this myself also at the same rates.

Yes a reasonable commission would be my minimum expectation.
Good point, I don't know why he would agree!
My thinking I suppose was if it was a case of 'I'll continue to purchase component off you but I take over the side business.' Or if I invest in the project from the offset alongside him and have a buy out option down the line. As you can tell, I'm not very well versed in this particular area of business!

NaiveMelodies

Deleted User wrote: »

Set up a separate ltd company with you and your boss 50/50 shareholders. Or another share structure depending on who is putting what into it to reflect that. Option to buy the company out later - you will just look silly if you ask that question, asking for a percentage of sales you would be undercutting yourself massively.

50/50 Shareholders or three ways with another interested party would be the perfect scenario for me.
That's two very clear responses to my buy out idea- I definitely won't ask to buy out the company later!!
And yes, quite concerned about undercutting myself.

NaiveMelodies

NaiveMelodies wrote: »

50/50 Shareholders or three ways with another interested party would be the perfect scenario for me.
That's two very clear responses to my buy out idea- I definitely won't ask to buy out the company later!!
And yes, quite concerned about undercutting myself.

By getting shares instead of a sales commission if someone does come in to buy out the company later you are in a much better position to cash in. You also will have a seat on the board and a vote (make sure you state you want these things). If your inexperienced in this kind of thing and your boss is experienced, in my opinion its good to come with something solid and reasonable, not being too greedy but getting enough for yourself at the same time. If he is contributing the financing and half the labour, probably your best bet is getting 33% to his 66%. When you approach him/her with your proposal make sure there is logic behind the structure, so you can argue for yourself in the case he makes a counter proposal. And if he proposes something completely different that you don't quite understand, tell him you'll need a day or two to think about it instead of agreeing to it on the spot.

NaiveMelodies

Thanks El Rifle, seems like excellent advice.

On another note.. if an agreement was not met by both parties and I walked away, how strict are the non compete laws in contracts? It's not direct competition with regards the market but part of the concept would fall in the same industry category as my current employers.

NaiveMelodies

NaiveMelodies wrote: »

Thanks El Rifle, seems like excellent advice.

On another note.. if an agreement was not met by both parties and I walked away, how strict are the non compete laws in contracts? It's not direct competition with regards the market but part of the concept would fall in the same industry category as my current employers.

Depends on the quality of the contract and how its been drawn up. Probably only a solicitor can answer that question for you.

pedroeibar1

NaiveMelodies wrote: »

Thanks El Rifle, seems like excellent advice.

On another note.. if an agreement was not met by both parties and I walked away, how strict are the non compete laws in contracts? It's not direct competition with regards the market but part of the concept would fall in the same industry category as my current employers.

That depends on how the non-compete clause is structured in the shareholders’ agreement. It can be limited by time and by geographic location (usually both). However the clause cannot be too onerous as a court will not uphold it if found as such – a person cannot be unduly denied from earning a living. The specifics often depend on the location & its size, and the type of product/service.
A properly drafted Sh. Agmt is critical if you proceed; get one drawn up by a solicitor/accountant. It would also cover sale by a shareholder etc.