ENTER OUR CONTEST! How does Dave’s business grow from here?
Handing the business to son Billy comes with son's ambitions to grow through real estate speculation
By John Bleasby
Dave Ullman is progressively turning his eight-man renovation contracting business over to his 24 year old son Billy as part of a five-year exit plan. Dave thinks Billy’s ready, but figures he’ll be back now and again to help Billy with the transition.
Billy enjoys the business and is skilled at pretty much every aspect on a work site. He’s ambitious too, and would like to grow the business, not just maintain the status quo.
That has led the father and son duo to a crossroad. Dave and Billy have completed a major renovation for a wealthy client, Ken Morgan. Morgan really liked the Ullmans’ work and has a business proposition for them. “I’ll finance the purchase of run-down houses; you and Billy will fix them up. We’ll split the profit after resale in proportion to our respective investments.” Morgan explains to the Ullmans that they have the potential to make a lot more than their usual profit for just contracting.
Billy is excited, and sees it as a way to expand his dad’s company under his leadership. Dave is hesitant, however, and worries about the risks of having to front all the labour and material costs, then wait for the resale before seeing any cash and potential profit. On the other hand, Dave wants his son to be happy. What should Dave do?
- Stay cautious, and explain to Billy that there are other ways to grow the business than to partner with a wealthy man in real estate speculation.
- Go ahead with one project with Morgan, and see how it works while hoping for the best.
- Set up a separate company with Billy to handle the house renovation flipping projects to mitigate any potential financial problems.
- Loan Billy money to front the required costs and let him go out on his own with Morgan, keeping himself and the contracting company at arm’s length.
- Some other idea.
Your suggested solution can be any combination of these ideas, and should be accompanied by a brief but clear explanation. There is no absolute right or wrong answer!
The response chosen as the winner will receive a
DeWalt Cordless/Corded 20V MAX* Bluetooth® LED Large Area Light (DCL070)
(retail value $479)
The deadline for entries is