I have a successful IT company that I own/manage. I also have a low voltage division with 7 techs.
Currently, the LV team is sort of losing money. When I say sort of, its because on a cash basis it currently lost money last year, however when all of our invoices are paid to us (and they should be), it probably will have made $350k last year profit.
The reason why it's not making more than that is due to mismanagement. The current foreman is not doing his job properly, bills are not being sent out on time (especially for deposits) and there is no real marketing to get new customers.
An electrician (with about 15 employees) that I am friendly with approached me on joining teams. Basically, his concept would be that he would take 40% stake in the LV company. In return, he would manage the teams (he has foremen and the structure for it), get more customers, handle the day to day, etc.. I would be involved still on the LV planning side as he doesn't have LV experience. My more expensive higher-skilled LV techs would do the finals and his lower-paid workers would do the wire pulling (thus reducing the costs). In theory, most of the day to day headaches will be removed from my head. And he will be able to grow the business.
The other option would be for me to higher, a dedicated manager (I guess about $150k), higher someone to do sales ($60k) and get rid of my overpriced foreman (-$70k), and replace that with a cheaper but skilled work ($50k). So I would be looking at a net expense gain of $190k.
While the manager would be able to take over a lot of the headaches, it would not be as much as if the electrician took over. But if with both the company grew to bring in another $500k in profit per year for a total of $850k (a number that should be easy), with the partner, I would be walking away with $510k profit but with the employee, I would be walking away with $660k profit. And if the profits are more than that then it will be even more.
I am making a decent profit ($750k+) from the IT business, so on one hand I can say let's invest the $190k into the low voltage so I can make more profit. Or do I say, focus on the IT, and being that most of my headaches will be away from the low voltage side, I will be making a nice second almost passive income on it.
Any suggestions, comments, etc....?