EP 532 - Build Wealth Buying Into Your Employers Business
·51 min·5 clips
How can you buy into your employer's business with no money down, even if it owes the IRD?
This episode explores how employees can purchase a stake in their employer's business, often with minimal upfront capital. Hosts Phil Smith and his business partner, from The #WhatsNext Podcast, guide listeners through the practical and financial considerations. They position themselves as experts in business acquisition and employee ownership pathways.
The discussion begins by contrasting buying a business stake with purchasing property or an entire company, noting the unique possibility of a "no money down" entry for employees. Phil Smith cites statistics indicating one in two New Zealand businesses are owned by individuals over 50, many lacking a succession plan. The hosts outline key topics including how to determine if an employer is willing to sell and assessing one's own financial capacity for such a purchase.
They plan to cover the process of valuing a business and the critical role of shareholder agreements, especially for minority stakes. The conversation will also weigh the opportunity costs of investing in an employer's business versus other options. A specific scenario raised involves the risks of buying into a company that may owe significant tax debt to the IRD, New Zealand's tax authority.
A surprising claim is that employees can technically acquire a minority shareholding with no cash deposit, which the hosts acknowledge sounds "too good to be true." An interesting insight is that simply asking an employer about succession could unlock ownership opportunities, given the prevalence of unprepared aging business owners. The episode promises to delve into the practicalities not taught in traditional education.
The hosts adopt a conversational and educational tone, using relatable analogies like comparing business purchase to property investment. Their style is direct and advisory, aiming to demystify a complex financial topic for a general audience.
This episode is ideal for employees curious about business ownership or those whose employers have hinted at succession. Listeners seeking structured investment advice or highly technical legal/financial analysis might find the discussion too introductory.
