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Answer Upon - Checklist and Tips for Selling a Business
Let me share an inspirational story with you, a metaphor which was the catalyst of my personal growth financially and my very own paradigm shift.Busy working or being financially productive!Once upon a time a very strong woodcutter asked for a job in a timber mill, and he got it. The pay was really good and so were the work conditions. For that reason, the woodcutter was determined to do his best. His boss gave him an axe and showed him the area where he was supposed to work. The first week, the woodcutter cut down 18 trees. "Congratulations," the boss said. "Continue going that way!"Very motivated to hear the boss' words, the woodcutter tried harder the next week, but he only could bring 15 trees. The third we
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would ap
Tis the season when we are wracked with indecision on who to buy for and what to buy. We don’t want to insult anyone, but neither do we want to bust our budgets. Here are some of my thoughts on this dilemma.First of all, this is not a competition or at least it should not be one. The largest or most expensive gift is not always the one most appreciated.Make a list – a short list. Your gift giving list should include your immediate boss and perhaps those co-workers you think of as friends. If this gets uncomfortable because of your co-workers are less than what you consider worthy of your hard earned cash, then you might want to take the gift giving for those who have earned your respect and trust out of the office
Answer: Acquire every last after tax dollar and get paid in cash. Also, follow three critical steps before proceeding:
1. Preplan the sale of your business. This should not be a spur of the moment decision. Rather, it should be well planned in advance. Though it is not possible to control the external environment, such as interest rates and strength of the economy, it is possible to plan for an orderly transition. Start thinking about some obvious sources for a potential buyer. For example, should an employee be groomed for possible succession? Might a good customer be interested in acquiring your business in the event of its sale?
2. Recognize the importance of finding the right buyer. Most businesses don't have a value that is set in stone. Instead they have a range of value. This means that different buyers will have different perceptions of the same business's value. It becomes important to pre-plan your confidential marketing effort to gain exposure to multiple buyers, especially synergistic buyers. Synergistic buyers are those individuals who, because of their location, complimentary customer base, financial resources or market position, can profit more from owning your business and are therefore willing to pay more.
3. Consider getting professional help. Unless you have a background in taxes, legal issues and merger and acquisition work, you will probably unknowingly make a multitude of costly mistakes by trying to sell your business yourself. Those mistakes may cost you substantially more than any fees paid for competent professional assistance. Do some homework on various alternatives. Become informed by attending seminars regarding tax issues, estate planning, and so on. Ask your CPA or lawyer to recommend “general knowledge” seminars that might assist your learning curv
Question: How do I legitimately minimize my tax obligations when I sell my business? Answer: Plan well in advance by reviewing your corporate structure on an ongoing basis. This will enable you to maximize the amount of proceeds you retain from your business's eventual sale.
As one would expect, the tax rules make it difficult for any quick fixes that give rise to immediate benefits. Consider changes to structure now that may result in more favorable tax treatment when the business is sold in five or ten years.
Start by getting up to speed on recent developments in the tax code. Chances are the code is very different today than when you bought or started your business. So sit down with your professional advisor and review your current business structure and its appropriateness for your business's eventual sale.
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would app
I had a lunch meeting in an office building with a large open atrium the other day. It was a very nice spring day and the atrium was filled with sunlight. On the edges of the space were large trees and full green plants. These plants closely surrounded tables and chairs.We had our meeting in the atrium because it felt like being outside without the chill of a typical Midwest spring day. After the meeting, as I was getting ready to go I noticed that the plants were fake and I thought they were real. But the trees were large, about 14" tall so I knew they were real. Wrong again. I had to get very close but sure enough the trees were fake too.You might wonder how artificial plants and trees can be so real looking. We
2. Recognize the importance of finding the right buyer. Most businesses don't have a value that is set in stone. Instead they have a range of value. This means that different buyers will have different perceptions of the same business's value. It becomes important to pre-plan your confidential marketing effort to gain exposure to multiple buyers, especially synergistic buyers. Synergistic buyers are those individuals who, because of their location, complimentary customer base, financial resources or market position, can profit more from owning your business and are therefore willing to pay more.
3. Consider getting professional help. Unless you have a background in taxes, legal issues and merger and acquisition work, you will probably unknowingly make a multitude of costly mistakes by trying to sell your business yourself. Those mistakes may cost you substantially more than any fees paid for competent professional assistance. Do some homework on various alternatives. Become informed by attending seminars regarding tax issues, estate planning, and so on. Ask your CPA or lawyer to recommend “general knowledge” seminars that might assist your learning curv
Question: How do I legitimately minimize my tax obligations when I sell my business? Answer: Plan well in advance by reviewing your corporate structure on an ongoing basis. This will enable you to maximize the amount of proceeds you retain from your business's eventual sale.
As one would expect, the tax rules make it difficult for any quick fixes that give rise to immediate benefits. Consider changes to structure now that may result in more favorable tax treatment when the business is sold in five or ten years.
Start by getting up to speed on recent developments in the tax code. Chances are the code is very different today than when you bought or started your business. So sit down with your professional advisor and review your current business structure and its appropriateness for your business's eventual sale.
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would ap
Unless you’ve been living under a rock for the last few years, you’re well aware of the online-shopping craze that’s sweeping the country! From rare books and CDs, to cars and vacations, shopping for unusual items and oddities has been simplified with just a click of a mouse with the Internet’s virtual shopping malls. But what about the latest trend- the one about shopping for your “not so atypical” office supplies online? What exactly are your peers and competitors shopping for online, saving both time and fuel in the process? To aid you in your quest, we’ve compiled a list of the “top 5 office supplies shopped for online”.1. Office Planners and Calendars- Organization is key to productivity. Having all of your employees
3. Consider getting professional help. Unless you have a background in taxes, legal issues and merger and acquisition work, you will probably unknowingly make a multitude of costly mistakes by trying to sell your business yourself. Those mistakes may cost you substantially more than any fees paid for competent professional assistance. Do some homework on various alternatives. Become informed by attending seminars regarding tax issues, estate planning, and so on. Ask your CPA or lawyer to recommend “general knowledge” seminars that might assist your learning curv
Question: How do I legitimately minimize my tax obligations when I sell my business? Answer: Plan well in advance by reviewing your corporate structure on an ongoing basis. This will enable you to maximize the amount of proceeds you retain from your business's eventual sale.
As one would expect, the tax rules make it difficult for any quick fixes that give rise to immediate benefits. Consider changes to structure now that may result in more favorable tax treatment when the business is sold in five or ten years.
Start by getting up to speed on recent developments in the tax code. Chances are the code is very different today than when you bought or started your business. So sit down with your professional advisor and review your current business structure and its appropriateness for your business's eventual sale.
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would ap
In this installment of DME software for medical billing, we're going to cover one of the most important parts of the system, updates.As much as medical billers would like the DME and medical billing industry to be stagnant, that is just not the case. Regulations are constantly changing as well as prices, diagnosis codes, procedure codes, electronic billing specifications and on and on. So what does one do when they just got the latest software and one week later Medicare pricing for wheelchairs has just changed? That's where updates are so important.In the DME system, there are a number of updates and not all of them are done at the same time. Some are done monthly, some quarterly and some are done whenever needed
As one would expect, the tax rules make it difficult for any quick fixes that give rise to immediate benefits. Consider changes to structure now that may result in more favorable tax treatment when the business is sold in five or ten years.
Start by getting up to speed on recent developments in the tax code. Chances are the code is very different today than when you bought or started your business. So sit down with your professional advisor and review your current business structure and its appropriateness for your business's eventual sale.
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would ap
Elizabeth is the executive director of a large non-profit organization that provides wide-ranging services to people in need. She and her staff work long hours to help their clients as effectively as possible, always trying to make the best use of limited resources. While she acknowledges that hard work and scarce resources are the way of the non-profit world Elizabeth admits that she feels increasingly overwhelmed. She accepts as fact that she will work herself to burnout then leave the organization.Frank, a successful surgeon, is a popular, sought-after speaker at medical conferences around the world. He struggles to balance the challenges of his work with the demands of his family while trying to squeeze a little time for
For example, if you are structured as a corporation, the substantial difference to your after tax dollars on sale depends on whether you proceed with an “asset” sale or a “stock” sale. Selling the corporation's assets can result in proceeds being taxed at the corporate level as well as the individual level when the remaining proceeds are distributed to the stockholders. However, if the stockholders sell their stock, it is likely that capital gains provisions would apply. The difference this makes to retained proceeds can be enormous.
Paying our share of taxes in the United States is an economic reality of life. Yet after tax dollars in the sale of a corporation can vary between 45 percent and 85 percent of the sales price based solely on tax structuring issues. The earlier you start planning for the sale of your business, the more likely you will be to minimize tax obligations.
Question: When is the best time to sell your business?
Answer: The best time to sell your business is determined through a careful consideration of the factors that can and cannot be controlled to maximize the amount of cash you receive. These factors include:
Environmental/External Issues- Beyond our Control
Low interest rates and a low inflation environment with plenty of liquidity and a buoyant economy create an ideal scenario for mergers and acquisitions. Clearly, we have enjoyed this scenario in the United States over the last few years. As a consequence, there has been a flurry of activity in corporate America as well as small business America . Well-run, sound businesses are selling relatively easily for nice multiples. Yet, as we all know, the economy goes in cycles. If the sale of your business is on the immediate horizon, then perhaps consideration should be given to bring the “sell” decision forward in order to take advantage of these robust conditions.
Internal Issues-Within our Control
A potential buyer is going to pay significantly more for a business that demonstrates a consistent track record of growing revenues and profitability. However, all too often a business is allowed to stagnate or even decline because the owners have taken their foot off the accelerator. Getting “burned out” and other health issues are probably the most often cited reason for a small business owner wanting to sell. This is understandable, but also often controllable. Recognize the warning signs and take whatever corrective action possible. Again, choosing to sell for a good price while the business is buoyant is far superior to forcing a sale because of health or other issues that have impacted revenues and reduced the business's value.
Above all, think with the head and not with the heart. A decision to sell can be very difficult for a host of good reasons. Most small businesses don't have boards of directors holding management accountable. However, sometimes it is prudent to seek outside objective advice from respected confidantes or professionals. These individuals bring a fresh perspective and
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