Sooner or later, you will cancel your business. The question is not whether you will be ready or not. The question of sixty four thousand dollars is whether your business will be ready or not.
It is estimated that seven out of ten private companies have no plans to transfer the company to the next generation of owners. What does this mean for you? That means if you do not have a plan to transfer your business to family members, current affiliates, managers or employees, you'll ever be selling your business.
That day may come sooner than expected. Do not make a mistake thinking just because you are not ready to retire that you have enough time to prepare your business for sale.
As a business broker, I've participated in a number of transactions (and potential transactions) where the business owner would sell or in some cases be forced to cancel business until expected. In fact, retirement is NOT the number one reason companies sell.
Here is a list of the most common reasons why owners sell or discontinue their use:
Burn Out (Number One Reason To Sell)
Take Good Practice
Get a Good Work
Get a Good Work
Get a Good Work
The sad truth is that many business owners do not take advantage of their most valuable asset: the company. They do not marry anyone to resume business in their absence and do not keep business in a salesable form at the time they work in business.
Business owners tend to be too worried about business operations to worry about – or think that an event they perceive will not occur until sometimes in the near future; sell the company.
Unfortunately, fate determines slightly circumstances that are not your control and difficult decisions must be made. If your business is not ready to sell when time comes, what are your benefits?
1. The liquidity of assets – can be a solution, but one who usually returns very little money to the owner of the company. If the operation had been driven, underlying assets (excluding real estate) could be old-fashioned and low for use by anyone. At auction, the assets will only come with what the bidders are willing to pay. In some cases, underlying assets are sold to liquidators (or trash) for only pennies per dollar. Liquidity positions often occur as owners have become ill or disabled, or need to retire and have not adequately planned their departure from the company.
2. Close company – is even less attractive than winding-up. That's because many people who find themselves in this situation tend to "turn off" breaking down underlying assets in the hope that maybe someone will come together to buy this company. This almost never happens.
BUILD NOW OR WARRANTY FOR SALE SALE
Okay, so you think you have enough to do without throwing more on the hill. Am I right? That's why I have written this article to you. It provides a "down and dirty" overview of items you purchased to start thinking about and planning for now. By doing so, you will provide additional security networks that will help ensure the company's valuable assets.
Here are just a few of the advantages of planning now:
Proposed sales allow your goals and goals in your schedule
You may begin to identify potential buyers
You may need to create an attractive buyer
] You can start to understand why buyers may want to buy
You could learn why buyers would not want to buy – and be able to fix the problem
You could start to appreciate the value of your business now and learn How To Increase Value As Part Of Your Retirement Plan
BUSINESS VALUE HOUSEKEEPING CHECKLIST
List All Sales
Business owners often find unbelievable ways to enter the collector. But the taxpayer can be the owner of the company's best friend when it comes to selling one company. Income tax is a major investment in the years before the sale of the transaction is expected.
Taxpayer tax shows the buyer and banker that your transaction has been profitable.
Nobody wants to pay more income tax. But consider this example: Ronald Bunk announced a systematic income statement of an average of $ 20,000 a year. Taking into account the total tax rate of 40%, mr. Bunk $ 8,000 in taxes per year. But underlying revenue also reduced the company's income acquisition by $ 20,000 a year. For example, if the company could be sold for a multiple of 5x, the company received a receipt – the company would sell for $ 100,000 less ($ 20,000 average of email not announced times the price of 5) but it's really worth it!
Without taking into consideration time-consuming money, it would take over a twelve-year (illegal) tax act to make up $ 100,000 for commercial purposes. The guide: We try to screw the government, owners of the company are often found at the short end of the letter; often in more ways than one.
Eliminating merger of commercial and other fixed assets
Common among closely related companies is to mix assets and cost of business and asset management. I have seen companies own motor coaches, boats and airplanes; all listed as business assets. The cost of maintaining and operating the assets had expired as ordinary operating expenses.
It is true that these companies (not revised by IRS) are saving a certain amount of income tax and providing extra "fringe" benefits for the company's owners.
Wise business owners should endeavor to distinguish intangible assets from the company three to five years before the proposed sale of the company. By doing so, it will be much easier to measure accurately and reflect the true payroll firm of the company, as it will be unchanged from the investment in non-operating assets and associated costs.
Your business purchasers generally purchase future earnings and benefit streams that will be produced by your company. The slower and most productive your business is – the more it's worth it. It's never too early to start segregating non-business assets from your business, as it may take some plans and time.
Make your own due diligence
Some managers of both public and private companies get a physical check once a year. Many of these same managers consider nothing to review their personal investments at least once a year, if not more often. Nevertheless, these same wise executives are never considered to physically give their business, unless they are compliant according to company rules, rules or other necessary reasons.
Anyone who is interested in purchasing your business will perform "due diligence" strategies for your business before closing the purchase. All too often, sellers are surprised by the skeletons that buyers can find in the closet. These skeletons can reduce the value of the company and, in some cases, kill some opportunity to close sales. What skeletons are your company's lockers?
Why not give your company a regular physical appearance? Basically, I suggest that you would like to treat your business as someone else had it – and you were possibly the buyer. What problems would you discover that could cause you and your advisors to reduce or reduce your bid?
Spending time and money to discover and fix your company's problems now pays great profitability in terms of increased business value – which is exactly what you want when it's time to sell.
Compliance with taxation and supervisory authorities
Administrative rules often seem to prevent growth and profitability of the company. Some rules may seem rather easy to "small" or ignore.
Take, for example, one of my latest sellers who swore that I had no rules of violation. I remind the seller that something "hidden in the closet" would most likely be discovered following a diligence of the buyer. "No, no problem of any kind" I was sure.
Well, what happens because the buyer is reliable? Does the seller believe that there are a few vessels / storage containers that are located behind the house – as KNEW sellers were in violation of local planning rules. How did they know? They had received four previous "reminders" from the custodians and the need to remove them.
"Why do not you mention me, or do you mention it in your statement about disclosure?" I asked. "Give nothing, nothing happened, and Township never did anything – so we just speak it's no matter." Be the seller's comments.
No matter, unless the buyer prevents the matter from being matched, it stretches some extra wrinkles into the mix. In that case, the case was easily resolved (still a lot of additional costs and chagrin sellers). But sometimes it is not known that the fragments are so easy. In that case, the seller is at risk of blowing a lot.
What's the botany?
Clear all tax, industrial, OSHA, EPA or organizational issues that your company does not complain about.
Organize and keep files available. You never know when an opportunity could end. If and when it's coming, will you be ready to hit while the iron is hot? How often have you heard that someone says something like, "I sell something, including my business at the right price?"
Perhaps you've said it yourself. But would you know what paperwork and documents that a serious buyer will immediately need to do the purchase? When an increased trader is ready to start a serious due diligence, they need various business documents.
The following is a list of items that the buyer will request:
o Three to five year income tax rights
o Copies of one to three quarterly payroll reports
o Three to five years CPA prepared Interim Report
o Current Annual Accounts
o Detailed Depreciation Specifying All Fixed Assets Owned by Your Company
o Company Agreement with Updated Minutes
o 19659002] o Copy of Insurance Assurance Summary (provided by air carrier)
o Employee Insurance Information
o Employee Information Surveillance Programs
o Copy of Contracts of Work
o Copy of Other Contracts to which the Company is a member
o Copy of license, patent registration, copyright, trademark, etc.
The above list is an example of the types of files that your company should have up to date and exist at all times. These files are very important to accelerate the sales process. Although this advice is basic, I often met companies where the files are not complete and updated. This situation can have a significant impact on potential sales.
I suggest using three circles to keep major updated files accessible at all times. This also makes other business needs for the documents much more manageable.
You can increase your funds by knowing some simple principles to successfully sell your business. Just like other owners of closely related companies, you know how to run your business day by day, month to month and year from year to year. But your experience in running the company has not prepared to know how to sell your business.
While the information I provided in this article is not all inclusive, it should help you start preparing your business for success, not mom when the transaction could be sold.