"Biggest Decision" update...more help requested...
I'll begin with thank you for all the advice that you've already given. All of it made me ask the right questions at the meeting about the sale today. Since you were all somewhat instrumental in the helping me to comprehend the process from the outside, I would humbly ask that you add a bit more to my pool of understanding.
So, the meeting today was peaches and cream with respect to the many questions that I had about this sale. We (my attorney, my accountant and myself) are now completely certain that my "consultancy" will be external of all business ties after 90 days. During that 90 days my only responsibility will be to help a migratory staff adjust to the business model and to help guide the new management in the most effective direction concerning upgrades and integration of new tools into the current system. I am not, and will not be expected to physically be on site on a daily basis and the necessity to work the full contractual obligation will be at the discretion of the new management. So, that's a relief.
Next, we covered the non-compete and why (very, very specifically) it was not being expected in this case. Both my lawyer and theirs apparently agree that their business model of the new management would not be in direct conflict with each other according to their assessed directives and therefore would not be required. Furthermore, the buyer has apparently purchased at least one other studio somewhere in the USA and found that one's career can not be compromised as part of such an arrangement. In other words, my investment in education, the industry and lack of means with which to generate money for my family otherwise would in effect be null and void in most US courts anyway. They simply felt that a gentleman's handshake was a fair enough bond and the potential for legal backlash did not merit the cost needed to enforce such a judgment should I ever decide to work in this market again. Besides, they unlike most people I've met, admit that the competitive nature of our industry is one of the reasons that it has defied common financial prognostications and what makes it such a blast to be in.
Finally, I did find that their underlying motive is not directly congruent with the ideology of buying a business like mine based solely on its success, but instead on its good credit, recognized name and reputation for meeting the needs of its clientele for many years
I detect some resistance to the deal deep down inside.
Only you can answer faithfully what your inner voice is telling you.
If the deal is not adverse to your ability to generate future work, stay employed, pay all your current expenses, overhead and mortgage and leave alittle left over for personal items than it sounds like it will work.
However if you will feel lost without the daily grind of working every day at a place you created and nutured then this lost may not be worth the rewards.
Ultimately you have to trust yourself and even more the buyers. If you have the slightest amount of mistrust or doubt then don't do the deal or discuss your concerns and get them out on the table.
I wish you the best of luck.
What's going to happen to your staff? Does your reluctance have anything to do with them?
and... what if the buyer googles you and finds this discussion on the COW?
-- Bob C
That very interesting Bob because I was thinking the same idea.
It can be quite a problem to discuss private matters on a public forum unless you protect the names of the guilty and innocent persons or parties involved.
In anycase Michael is making a major decision in his life and it most likely is beneficial for him to get it all out in the open before he does something he might regret long term.
Afterall he could always claim somebody else hijacked his computer and assumed his COW identity. Would this then be the first case of Cow identity fraud???
After 2000, we actually paired things down...then in 2002 we paired them down some more...December 1st, my partner and I split and I'm back to being a one-man shop.
It's a little different, but I've known several Advertising/Media types who built huge businesses, then realized (sometimes after the enterprise's demise) that it wasn't what they enjoyed...or what they're good at.
I've moved into some higher end projects and am working with some far less stressful clients now. I'm fighting the urge to grow like crazy. I'll concentrate on surrounding myself with the gear I need and do less projects. So far I'm liking it...
Creative Cow Host,
Great words of wisdom tim, as always. That is actually the main focus for me at this point. Do I cash-out and vegitate or do I button down and sail this ship forward? The offer is very good, the terms are legitimate and fair, so the undecided question is more about my love o the work
Good luck on your adventure and I'll let you know what goes on.
Thanks so much...
Gainesville, Florida USA
[Tim Kolb] "I'm fighting the urge to grow like crazy. I'll concentrate on surrounding myself with the gear I need and do less projects. So far I'm liking it..."
When I grow up, Timmie, I wanna be just like you. ;o)
Once again, you toss a grenade as an understated offhand remark that jumps off the page the way that everyone leans in to hear when someone whispers.
I know many people here in the Cow who make good money and know their limits and who work within the context of the equipment they have and NEED. Conversely, I know others who never make any money and are always buying more and more stuff; thinking that they need that next big thing before they can be in the position to make themselves "real" or something...
There are people in this site who have old Media 100s and Avids that are a decade old and are still making money from them. It's what you do with the tool, not the tool itself, that determines if you are a pro or an amateur.
Thanks for the visit with commonsense, Tim.
[Ron Lindeboom] "Once again, you toss a grenade as an understated offhand remark"
No kidding! This guy is our version of King Midas. Hey Tim, could you drop by my office and do a few ritual chants?
[Ron Lindeboom] "t's what you do with the tool, not the tool itself, that determines if you are a pro or an amateur."
Ah, the wisdom of our mystic leader. Always the truth and always worthy of the read.
The sad thing is that I suppose I actually fall into both of the camps that you mention at some point. I DO work within my budget and limits, but I always strive to do one more thing than I did yesterday...so I'm sort of guilty of that crime. However, knowing one's limitations and accepting them as borders of service, ability or design does not always make the most dynamic business model. The evolution of a person's ideology toward their work and the desire that they harbor to learn as much as possible while working in their respective field often require the acquisition of tools that make this process or path, as it may be possible.
As a frame of reference, I decided that we'd make the shift to HD so that I could keep working in adjacent markets like Orlando and Tampa, both of which now offer a fully high definition delivery path and both of which derive large sums for our business byway of regular projects. That decision necessitated the purchase of vast amounts of new tools to augment our current tools in order to do what we propose effectively. Did we NEED to buy all of the little extras? Certainly not, but we are far better prepared to deal with jobs as they come with more efficiency and less waste, but realistically we could have functioned without most of those pieces and at far less cost to us.
The truth is that doing what we do, with respect to each individual market and/or studio is considered a creative endeavor and such a business often requires new "paints" with which to create our art, even at the cost of having too many. We recently stepped into the realm of 3D animation, a skill set that is highly specialized and very, very difficult to learn let alone master. However, we have been getting requests for over a year to take on projects that required just such an investment and our market, sadly is far from having an abundance of skilled creatives with those exact talents. We could have brought in a specialist or hired an out-of-market freelancer, but the cost of buying our own tools and teaching ourselves how to create at a reasonable level was, in my mind a better investment. Granted, I'll not be making Toy Story III anytime soon, but in all fairness, there is nothing in that range anywhere near our market.
In closing, I think that there are so many different possible paths to take that the presumption that growth beyond our assumed means would prove fatal, when in fact it challenges us to create outside of our admitted limitations and find new and exciting boundaries. I suppose that the desire to specialize is outweighed by the desire to grow at some level, so while our budgets say "don't grow" our hearts scream "you can do it"
I changed the name of the thread because I didn't want it to appear that I was responding to anything you were saying.
You make money, Michael, and so my comments were not addressing your situation but really pointing to the general populace of the forum and those that find themselves always looking for the next gadget rather than serving the clients they can serve today.
While you are clearly one who loves to have a vast arsenal of tools at your disposal, Michael, you are also someone who uses them to make money and to make things happen.
I was merely playing off of Tim's words to illustrate the point that there are some who find themselves always looking for the next thing before they will allow themselves to feel and act like they are truly in business today. Being in business is not about buying tools, it is about turning a profit -- whether that is serving a client base, selling your business or whatever pays the bills.
Tim's words just brought back to me the number of people we have seen over the years that chase tools until they are out of gas and have never built a client base. This is a mighty expensive hobby that some learn the lesson of much too late.
[Ron Lindeboom] "you are clearly one who loves to have a vast arsenal of tools at your disposal"
Man, if I could live up to the ideas that people have of me...well, I'd have a lot more stuff with which to make money.
[Ron Lindeboom] "you are also someone who uses them to make money and to make things happen"
Do you suppose I could have you call and say that EXACT phrase tomy wife? I think it would do wonders for my life at home.
As to the post, I was also only adding a generalized commentary about the otherwise obvious choices made by the people who work in our industry. God knows that each and every one of us has bought something that was beyond what we needed in spite of that fact, but not every one has made a perfect choice at every turn. I was just making clear that I agreed with the idea of expansion of services based on a functional need as opposed to a deep seeded desire to have a new toy. I can respect the point of the original post, but at the same time I didn't want to sway anyone's idea of the need of these "toys turned tools" as there are entire industries based on their sales alone.
And it is true that I have, and continue to make money with the tools that I have bought, earned and have been bequeethed over the years...many long after their industry accepted usefulness has passed, but often I find that my interest in something leads me to find clever uses for them in my own business and creative life aside from work.
I love this place! You can start off talking about how to get the space-bar disloged and end up chatting on how to make effective decisions in the modern creative world. No other forum can make such a boast!
"THE CREATIVE COW TOTALLY ROCKS!!" said Bill. "Totally! And the babes are HOT" replied Ted.
Gainesville, Florida USA
[tony salgado] "he could always claim somebody else hijacked his computer and assumed his COW identity"
That is highly unlikely...but I'll keep that one in my notes, ha, ha, ha...
Gainesville, Florida USA
[Bob Cole] "What's going to happen to your staff?"
My staff has been relegated to just three employees, so the plan to pay them sovereigns pay is only fair. It's not great, but they're aware of the possibility. Like many people who love what they do, these guys are sticking it out right down to the wire. In fact, one of them asked how much it would cost to transfer the business to him. A very thoughtful gesture, but not feasible.
As for the buyer doing a bit of research and the possibility, however unlikely that they buyer would shift their MO this late in the game would be a lot of time wasted on both our parts. Besides, if they read this and decide that they do want to back-out
[tony salgado] "Only you can answer faithfully what your inner voice is telling you."
Tony, if I did half of what that voice said I'd be in a straight jacket...but joking aside, I obviously have some hesitation simply based on the fact that certainty is no longer a certainty. I guess my instincts are to complete the deal, but there is a kid inside telling me not to follow through.
Tough questions, tough answers.
Follow your insticts... they're rarely wrong.
If you didn't want to sell, you wouldn't have gone this far into the process. Do the deal. Then, step back and think about the next chapter.
Just my .02 cents.
PS, thanks for a rare glimpse inside what is usually a private, confidential process.
[Mark Raudonis] "PS, thanks for a rare glimpse inside what is usually a private, confidential process."
It may normally be confidential, but I always discuss big decisions with friends and family. Since I've no fear of falling, I don't mind asking questions that I feel need answers...besides, there was no confidentiality clause within our contract. After the slew of NDA contracts I've signed over the years, sadly I know what to look for.
Gainesville, Florida USA
Please give us some specifics, and we can get a better handle on things.
I'm having trouble understanding why you are contemplating selling. If your business is profitable and you anticipate success going forward, why sell?
Help us out with some facts:
1. How many full-time employees do you have? What effect with the purchase have on them? This is such a people business, I can't understand the value of buying your company if the "engine" that makes it go is not part of the deal. Surely the buyer can't be interested in the gear. Do highly skilled people go along with the sale?
2. What sort of equipment is in your inventory? What's the ratio of the market value to the debt on your gear?
3. How does the offer compare with the yearly net? What's the multiple?
4. Are you just tired of what you're doing and wanting a change? Are you still planning on moving to New Zeland?
5. Are you so involved with your new product development that you can't do the production business? If so, is the sale of your business profitable enough to fund the development?
6. Please tell us more about the cable TV job offer! What exactly are they asking of you, and will that give you time to work your new products and have a personal life?
Please let us know any specific information you can share and the very best of luck with all your endeavours!
Why sell? It boils down to two simple factors. First, my children growing up and I'm missing some of it. I was diagnosed with a stomach cancer a few years ago and time has now become a very, very finite. My work isn't so overwhelming that I am completely denying my family, and while the cancer has gone dormant, there is no guarantee of tomorrow. Cheesy? Yes, but true.
Next, the initial offer that was made is, in my opinion worth some real consideration. I'm definitely not going to retire based on the amount, but it would buy a few years of "playtime". To clarify one point, I have never shopped my company around in an effort to find a buyer and probably would not have considering the freedom that this offers. This is the second time in my career where I have built a business from scratch and made it interesting to potential buyers, even though that was not the intention.
All of the tools are more or less over-the-counter solutions. Three fully stocked Final Cut Pro suites including a 2TB SAN, a respectable array of MiniDV, DVCam and Sony HD cameras, a host of lighting from HMI lights to my own fluorescent lights, a 48 channel Yamaha studio mixer, literally 50 different Ion, Rhode and Senheiser mics, 4 flight cases, portable blue screen setup
It sounds like there are some other life-factors that require changes. I have found it much easier to change when everything in my life is changing in total chaos then when some things are steady and some are in flux.
Right now, I'm not only moving my business, the joint venture has ended with my colleague of 16 years, new clients have suddenly appeared that work differently than most of the clients I've worked with for the last decade and a half (in a good way), my wife has transitioned back into the "outside the home" workforce, my daughter is entering junior high and she and her brother will be in different schools for the first time...and on and on.
It sounds as if you want to change your priorities for your life. I think it will be easier to do if as much of the old structure of your life is overhauled along with your new focus. A really decisive change in career responsibilities and emphasis may very well help, or at least I can say it would help me...
Creative Cow Host,
[Tim Kolb] "my wife has transitioned back into the "outside the home" workforce, my daughter is entering junior high and she and her brother will be in different schools for the first time...and on and on."
Wow! I'm sitting here wondering where you placed the "bug" in this room. Aside from the fact that my wife has decided to spend more of her free-time working for local charities and in art galleries where her work is displayed, BOTH of my daughters are going through "that change" where I'm more of an alien than the daddy that they were playing jump-rope with a few months ago. If not for the fact that my time were somewhat occupied, you might see my face on the news in one of those Fox New Alerts..."Man spotted at Bok Tower Gardens picking people off with water-balloons"....Oh, the terror!!! I can't tell you how appreciative I am of the fact that at least one other human being has some experience somewhat like my own. Business is business, but family is personal.
[Tim Kolb] "It sounds as if you want to change your priorities for your life."
See, I actually thrive on the lack of a routine however this particular routine has been the glue for most of my other non-routine things. I can see you scratching your head already, but trust me when I tell you that if I thought that selling-out in order to straighten out an error in priorities...well, I'd not be here right now. Truly, I am actually very much afraid of not being my "boss" anymore. I love the idea that going to school on field trips with my kids is up to me. I love the fact that I'm a respected member of my community who offers something other than legal or medical services...and who refuses to wear a suit to work to "blend". I love owning two work vans that have the term "professional video services" on the sides. I love being in a position a couple times a year to tinker with toys from different manufacturers for the purpose of reviews and promotional literature.
I guess that it all boils down to a momentous shift in all aspects of my life emanating from the thing that I've come to depend on as "normal" is the pressure point. It's been such a long, long time that I haven't been reasonably secure in other choices due to this otherwise solid anchor in my life. For the first time I think that I'm actually scared to make a decision. Almost 20 years of overzealous, wholehearted running blind into the driving rain without blinking, even after loosing Spiral Design to a crook of a partner just a few years ago, and I'm driven to my knees by this choice.
I will look at this with fresh eyes on Monday and take into consideration all of this information along with a huge reassessment of my life ASIDE form business. That might provide just the key I need to make the right choice. Thanks deeply Tim.
Gainesville, Florida USA
Wow! This thread reads like a GOOD soap opera! (there have been a couple...)
I'm certainly not in your shoes, Michael, so what I'm about to say shouldn't be construed as advice by any means. It's a perspective story that may (or may not) help you a teensy-weensy little bit, that's all.
Seven years ago I was in a somewhat similar situation, but looking at it from a different direction. Not career-wise, not life-wise, but perhaps priority-wise.
I was a staff editor at a large-ish post facility. At our height, we had 8 editors, four digital linear online suites, three Avids and a facility at a local sporting venue that supported a team that did something or other with balls. (I wasn't that editor...can you tell?!?!)
I was pushing 30 (this is where I'm not in your shoes...), and I didn't know how miserable I was. I had no life outside of work. I had two cats and a mortgage. But I love editing, I love what I do. The circumstances and conditions under which I had been editing at that company didn't work for me anymore. It took me a really long time to figure that out. It was a great company, the owner was the best guy you could hope for in a boss. I was editing at a pretty high level for my age. Working there gave me experiences I likely wouldn't have gotten anywhere else nearly that fast. Unfortunately, the company had grown, had changed, and we were going in different directions.
Many of the other editors were in your position where they felt they were missing out on their kids' childhoods. I felt like, "hey, give me a chance to FIND a life.". Working 10-12 hour days 6-7 days a week nonstop for months isn't the way to do it. Even if you love it.
So I did a survey of some freelancers in the area. Many had been on staff at that same facility. And then I quit.
Six months later, I met my husband on a freelance job. Three years into this freelancing thing, I bought a G5 and now I have a pretty nice studio in my office. I have three really great, steady clients, and a handful of others that come in a couple times a year.
I went from not knowing how miserable I was to not understanding how happy I could be in six months. My parents still talk about the change in me.
We just celebrated out fourth anniversary at NAB. I'm doing things with my work I never thought possible seven years ago. Granted, much of that is due to the technology, but it's also due to taking that HUGE step back and really looking at what I find important in my life and re-focusing on that. Completely moving out of what I knew made room for new, and I'm finding, more efficient things. I'm doing better work in less time, and I'm having more fun!
It sounds like this is what you're trying to do. It seems there's something inside you that needs this priority change.
It works. That's all I really have to say. There might be a slow start, or it might take off like a rocket. You can almost never go wrong by taking a long hard look at your priorities and changing your life/business/career to fit what is most important to you.
Just my 2
[debe] "...supported a team that did something or other with balls"
Priceless! Thanks for the smile. And I wholeheartedly disagree with you about your specific value in this instance. I LOVE Tim's advice since he's so close to my own heart when it comes to the logical side of how things SHOULD work that I often take his advice as gospel, give or take a phrase. But your fresh eyes are a vision, and the clarity is amazingly simple in your words.
I am motivated to do things that I've never considered as important in my life before this point, so much so that I am inclined to ask the tough questions about my life. My kids say that they are fine with either decision, but I seem to remember saying something similar to my mother as she made the decision to work "on the road" for IBM. I am a family man with a sincere love of being a husband and father, so that is where my loyalties lie. One of my responsibilities is providing for that family, which as of late has become more and more difficult due to numerous outside stresses. It seems that the moment I get one bill paid the next arrives and it's bigger than it was last time. So, the incentive to keep doing more isn't as much incentive as it is necessity
Yeah, Michael, I hear ya on the bills...they never get smaller, ever, do they?
Thank-you for the kind words. You're situation has been in the back of my head all day. I thank you for reminding me to test my own perspective! As I sit here on a Sunday in my office capturing B-Roll...
But my husband is out of town, and the kids are with their mother....so it's just me, THREE cats, and the mortgage today!
Good luck, and keep us posted!