My Library and Courses
Last Update: Sunday December 17, 2017

Key Idea: Buy A Business From Your Boss

Don started at Record Technology as a temporary employee working in the shipping room. But, had he not loved the business and had he not learned it thoroughly and had he not won the confidence of the founder, who knows where Don would be today.

Key Question:

A: 

You can buy the business where you work now. That's what Don MacInnis did.

Q:  What is the big advantage in buying an existing business?

A:  Assuming you get accurate information from the accountants and attorneys, you know what you have. The good, the bad, the beautiful and the ugly. It should be clear what you're in for if you buy a business.

Go back and study, Two Hands. Jon Zucchi bought a near bankrupt operation then breathed life into it. Look at the story we did about Cloud 9 Shuttle.  John Hawkins bought  the business out of bankruptcy.

Jim Schell sold a company he started to trusted employees.  He had gone off and started another business, so the one that he sold had already successfully been running without his day-to-day involvement. This turned out to be a practice run for the two employees who bought him out. They had proven to themselves and to Jim that they had what it takes to make the company even more successful.

Jim priced the company fairly and set it up for them to pay him out over ten years which made the payments low for the new owners. They were so motivated to get rid of debt and they were so good at running the business, they were able to pay him off in three years! Today the company is three times larger than it was when Jim sold.


Jim, who now writes books, including Small Business For Dummies, says that if you can't pay for the business out of cash flow in three years you should probably not buy the business.

Russ Seeley was smart not to give his business to his son, Matt, because even though Matt was working at Quality Bending, there were two other children to consider. By selling the business to Matt, the other children could not complain that Matt received inheritance that should have partially come to them.

Russ knew that Matt was ready to take over. He had learned the ropes as Russ gradually ceded responsibilities at a pace that gave Matt plenty of time to master the necessary leadership skills. In addition to training Matt, Russ also was brilliant to advise Matt to hire his own representation so that both the buyer and the seller had professionals crafting the document that outlined the agreement.

We know of at least one other situation where the second generation simply accepted a deal offered by their father and that deal turned out not to be in the best interests of the sons. Too bad. It's hard to imagine a father not wanting the best for his children but then again, that's the lesson taught in the book of Daniel. All men (and women) have clay feet.

Think about it

Would your boss consider selling to you?  Is there a company you would like to own that you can go work for so that you can buy it?  Is there an industry you want to learn?  Who is the best in that industry?  Could you get hired by that person who would then mentor you?

Clip from: Record Technology

Camarillo, California: Meet Melody and Don MacInnis; they're  "making it in America."   They manufacturer and export to the far corners of the world because they are now known as the best  record manufacturers -  vinyl, phonograph, long-playing records -- on earth.  Most kids today do not even know what what a vinyl LP record is.  Most think it is a dead technology.  But talk to any audiophile, and  you'll hear them wax euphorically about the fullness of the analog quality of the sound.

Go to all the Key Ideas and Videos of this episode...
Go to the homepage of this episode of the show...

Record Technology, Inc.

Don & Melody MacInnis, Owners

486 Dawson Drive
Camarillo, CA 93012

Visit our web site: http://www.recordtech.com

Business Classification:
Manufacturing

Year Founded: 1992

Buy A Business From Your Boss

HATTIE: (Voiceover) In 1992, Don bought the company from founder Bill Bauer.

How is it that he, when he started, find his place among all the other record-pressing companies?

DON: Well, he researched the industry quite thoroughly before deciding to get into it, and what he saw was a need for a quality manufacturer, a manufacturer that's primary focus is to make the best possible product and give the best possible service to the customer. And that's what his approach was, and he felt that if he did that, that there would be people willing to pay a little more for that product. And that's exactly what happened, he started from scratch and built it into a $4 million company.

The first couple of years were, you know, quite worrisome.

HATTIE: Well, so how did you and Melody manage? Did you livein a one-bedroom apartment or something?

DON: Well, we lived a pretty low-profile lifestyle. We lived in a rented home at that time. And, you know, since then, we've been able to purchase our own home, and we've been quite happy with that. But, yes, we budgeted.

HATTIE: When you and Don bought the business, was it scary?

MELODY: Oh, yes, very much so, especially--the vinyl business was way down.

HATTIE: Why did you buy a business that other people would think is going down the toilet?

MELODY: Well, we thought we could do something with it, and we were starting our new lives together and it had been here for many years and we wanted it to work.

HATTIE: So do you like a challenge yourself?

MELODY: Oh, sure. Sure.

Not a member yet? Learn!  Be empowered! Join us!