Becoming an owner in the firm you work for means you are making a total commitment – don’t make it carelessly.
This is a question many of our readers have asked themselves at one point or another in their careers in the AEC business: “Should I invest in the company I work for?”
I first had this opportunity in 1983 or 1984 working in an engineering/architecture firm in Memphis. Back then, I gave it very little thought. The firm I worked for had lost a bunch of money in the prior year due to over-investing in Intergraph CAD. They also ran off some of their older partners who had dysfunctional attitudes, or who weren’t contributing at the level they should have been.
Our two primary founders went out on the floor to a half-dozen or so of us younger, more motivated people to see if we wanted to become owners. They would also be willing to co-sign for the debt at our local bank so we could finance our entire investment. In fact, one of those people who became an owner when I did runs the company today, which is really cool!
The decision was easy for me. Back then, we had a word processing pool that did all of the typing. If you were an owner, your typing went to the top of the pile. That – along with the promise of a company car if we invested – was reason enough for me to get on board. It didn’t matter that the company was in horrible shape financially. It didn’t matter that I had no idea of when I could get my money back. Being an owner in the firm I worked for was a career milestone and I was going to do it no matter what.
When I look back on that, I guess I was lucky. Everything worked out fine. Although I didn’t stay there long, I did make money on my investment and got paid back promptly when I left. It could have gone the other way. But it didn’t.
When I have people contact me and tell me they have been offered ownership in their companies and want to know what I think about that opportunity, I try to ask them the same set of questions:
- Do you like and respect the firm principals? If not, pass.
- Do you think the current owners are unselfish and put the company’s needs above their own personal needs? If not, pass.
- Do you believe in the company’s stated mission and vision? If not, pass.
- Do you believe the company has the willingness to change and adapt quickly if necessary? If not, pass.
- Do you believe the company is committed to a growth vision and will do what is necessary to make that a reality? If not, pass.
- Do you believe that the company has a good reputation in the community and in the markets it serves? If not, pass.
Notice that I haven’t said anything about income statements and balance sheets? That’s because those things don’t mean much compared to the answers to these other questions.
Becoming an owner in the firm you work for is a big decision. It means you are making a total commitment to the firm. Don’t make it carelessly. But do realize saying “no” is probably not going to be received real well by the other owners. If you do say “no,” you might want to consider moving on to another firm where you would say “yes.” At least that’s what I think!
Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.