Teach Soap

I recently had a large company approach me to purchase my VERY small, local soap company for what I would consider a substantial amount of money. They want all recipes, formulations, records, etc, and they are requesting that I sign a non-compete clause that will be good for 18 months.

I did plenty of research to ensure that it is legitimate. I've met with them at their company offices. It just seems odd to me that this very large company is reaching out to me. My soaps are not unique, or special. I'm just a small time soaper who's done a few fairs, and festivals. Our sales aren't large, but we are profitable.

Has anyone else had a large corporation approach them like this? It just seems strange. I don't think it's a hoax, just wondering about the motivation.

I can't help you out, but I am very interested in how this plays out. Very intriguing. Would you mind revealing some details about your location - US (state/city)? Canada?

I'm in CA. I don't want to tell too much about the purchasing company until my attorney has finished reviewing the contract and it's all said and done. I'm not trying to be coy or brag. I'm truly shocked. Some of the soaps on here are far more beautiful and creative than mine. Mine are very standard soap bars. We have barely been in business less than a year. It's just crazy.

I'm wondering if anyone else has experienced this before.

Not to be pessimistic, but my first thought was "Why?" Why do they want to buy your business? Have they told you why? It seems like one of those "if it sounds too good to be true, it probably is" type deals. I'm glad you are working with an attorney. I hope it works out to your benefit if you really want to sell.

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Linda
I know the voices in my head aren't real, but they sure have some great ideas!

I'm in Cali as well. I received a letter from a company that wanted to buy me out. I had my lawyer check it out and it was fraudulent. I don't know who you are dealing with, but I passed.

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Irena
Closed minds are like faulty parachutes; they refuse to open.

I am asking myself the same question. Lol. It is odd. But, I've really tried to do the right thing and follow the rules about investigating the deal. It's a well known company. They flew me to their headquarters. They saw me at a wholesale fair in San Francisco and that's how they found out about me.

I wondered if they were maybe picking off a large group of soapers. But no one else has come forward saying this company contacted them too. I'm optimistic but using restraint too.

It sounds like they might be buying out small companies that they consider to be competition. I'd think really long and hard about going through with it - they are buying your recipes, your branding, your business name, your everything. And chances are they are just buying it to shut you down, if they are a big company they probably have no intention of keeping your business alive. Are you ok with that?

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Irena
Closed minds are like faulty parachutes; they refuse to open.

I meet with my lawyer Monday afternoon. We are flying in to meet with the company's lawyer's on Thursday next week. My lawyer is of the belief that it is a legitimate offer. He said he has another client with a similar offer from the same company. So, it is a larger company trying to buy the smaller ones out, as I suspected. But I still don't know why they chose me, and not the many other talented soapers out there.

So, hopefully, by the end of next week, I'll be in a position to consider everything, and make a well-informed decision.

Thanks for the feedback everyone!

Here is what puzzles me about this. So they buy up a few small soap companies. However, as anyone can tell from spending time on this board, new soapers are popping up all the time, and a percentage of those will decide to make a business of it. It will never stop - so what are they going to do - keep buying them up as they get established? Sounds like an endless game of "whack-a-mole" to me.

What role is the state of CA playing in all this? Putting on my "conspiracy theory" hat, I wonder if they are gearing up to implement some tough regulations that will put a stranglehold on the creation of new, handmade soap companies? They buy as many as they can, wiping out competition, then CA makes it impossible, or very difficult and costly, for such companies to start up.

California is up to no good, I tells ya.

Actually, CA just recently passed a law that makes it easier for people to start businesses out of their homes - particularly for those who make food.

http://www.csmonitor.com/World/Making-a ... businesses

Although this applies to food, I think it shows that some states are trying to help people trying to make a business out of their homes during tough economic times.

Interesting article - nice to see some good news in terms of small business!

ETA: My sister is in CA and needs extra income - I sent this along to her! Thanks again.