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Amy Lindgren: When Entrepreneurs Are Offered Jobs

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press
Thursday, March 02, 2017 09:00 pm

If you’re a small business owner or consultant, you probably conduct SWOT analyses (Strengths, Weaknesses, Opportunities, Threats) almost instinctively, keeping an eye out for situations that can help or harm your enterprise. A competitor is closing? Maybe those customers will need a new vendor. A law is changing? Might need to research how that could impact the business.Even so, for all the strategic scanning of the horizon you do, there's one thing you might be overlooking: The possibility of being asked to join a client's company as an employee.

While it’s common to imagine (or plan for) purchase by a larger entity, that’s quite a bit different than starting a business with the idea of being "discovered" by an employer. If the entrepreneurs I've counseled are any measure, that's the last thing on their minds when they hang out a shingle.

Even so, offers do come on occasion and there's not always much time to consider the ramifications before giving a response. If our nation's predicted worker shortages occur, we can expect creative employment recruiters to step up their outreach to the self-employed. Here are some things for the independent worker to consider should that call come in.

1. Why are they interested in you? In other words, do they want you, your business assets, or something else altogether? It could be a simple financial equation, where bringing you on board will save them money over paying your hourly rate. But if it's primarily your assets they want - your clients, intellectual property, products, etc. - beware. Your value to them decreases the moment ownership changes hands. An attorney or broker experienced in mergers and acquisitions can help protect your interests in this situation.

2. Would the new job require new learning? Of course you need to learn their systems, but will you also need to significantly increase your understanding of something you don’t usually work with, such as key regulations or proprietary processes? To find out, you need a frank discussion with your potential boss about timelines and support for productivity while you ramp up. Ironically, your reputation as an expert can harm you in this circumstance, leading a new employer to make unrealistic assumptions about your knowledge in other areas.

3. Will you be expected to stop working for other clients, or selling your products? From the employer's point of view, this is a reasonable request. They want your full attention, without the additional concern that you could inadvertently share their plans with competitors. To balance the sacrifice they're requesting, they might offer a signing bonus or other heightened compensation. That's nice, but here's the problem: They're essentially asking you to give up something certain - your current client relationships - for the "blue sky" of an untested employment relationship. To compensate, it's not a rich offer you need, so much as an airtight exit package. Since you're about to enter an "at will" relationship where you can be dismissed without cause on a moment's notice, you need the protection of a golden parachute.

While this is another situation where an attorney is more useful to you than an advice columnist, I'll note two of the many things you want to watch for as you negotiate your offer. One is any non-compete agreement that precludes you from restarting your business in a reasonable timeframe or which bars you from working again with clients you may be bringing with you to this position. The other is any agreement that assigns ownership of your processes or products to your new employer, but which forbids you from using them yourself if you part ways.

In these and other cases, a strong parachute can compensate for agreements that otherwise don't favor you. For example, imagine your new boss is firm in requiring you to close your business and insists on a one-year non-compete after you leave this job. That's fine, as long as your parachute includes an equal period (one year) of severance, regardless of the reason for your departure. With this arrangement, you're both invested in the success of the relationship, instead of you taking the bulk of the risk.

What happens if you present your request and they decide you're asking too much? That's awkward, but it doesn't have to end badly, especially if you’ve been respecting their point of view while trying to seek the proverbial win-win. You may not be able to save the situation, but you should be able to preserve their goodwill. Eventually that will pay off, in terms of new contract opportunities, or even new and better offers after they’ve had a chance to regroup. That's the good thing about running a business: Even the disappointments have a way of turning into positives. 

Amy Lindgren owns Prototype Career Service, a career consulting firm in St. Paul. She can be reached at alindgren@prototypecareerservice.com or at 626 Armstrong Avenue, St. Paul, MN 55102.

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