Hello fellow Mustachians, I am faced with an opportunity and am not sure whether it makes sense with FI as a major goal in my life.
I work for a small company (5 employees) in a mid-size east coast city. We are growing, but rely solely on the whims of our clients - we're in a service industry and have no tangible inventory or intellectual property. The company probably has about $500,000 in assets. The owner/boss is planning to retire in the next 10 years, and has offered to sell me the business. We haven't talked specifics yet, but has essentially offered to gift the first 15% to me, with discussions to be had about the overall deal.
I haven't seen the company's books yet, nor has the owner quoted a price, but I'm wary because (being a good Mustachian myself) I hope to gain my FI in the next 10 or so years, and I'm not at all sure how this would factor into that overall trajectory. My initial gut reaction is that this could mean borrowing a LOT of money to purchase a company that I don't want to run long enough to make back my investment. And what's to say that if he shuttered the business when he retires in 10 years that I couldn't just scoop up one or two of our major clients and continue working for myself? Or maybe I'm looking at it all wrong.
Has anyone else faced this scenario? How would you go about putting a reasonable price on a small company like this?