Your business is doing well, with 2009 in the distant past. But you are also getting older and worn down from many years – maybe even decades – at the helm, with no heirs apparent to take your company over. What to do? Your menu of options is limited, though selling your company to an unrelated third party is an obvious first choice. OK, so it is now time to take the next logical step and contact a professional business advisor to learn about the selling process and to get a valuation on your company.
Q: I need to hire three employees to help get my business started, but I don't have enough financing to pay the salaries for all three. Should I try to raise more money before hiring anyone or should I hire just one employee and hope that I can make it work with limited resources?
A: Every entrepreneur faces the question of how to pay employees during the startup stage when money is tight and the business has yet to prove itself.
So you are thinking about selling your business…what is the first step? Most business owners want to know what they can expect to receive from the sale of their businesses. Some owners have a pretty good idea of the value of their company, while others don’t have a clue.
The biggest surprise many business sellers receive concerns what parts of the business are actually being sold. What should presumably be a simple concept is regrettably often quite complex and not intuitive. Here is a primer on what you might encounter during the sale of your business.
1. The first matter is whether you are selling certain assets or the stock of your business.
While there are few givens in business transactions, here is one: the presumed buyer of your business will not know as much about your business at closing (or even for months thereafter) as you – the owner-seller – know right now. This means that the successful business buyer is taking a real leap of faith when he buys your business. If there is even a smidgen of distrust of the seller, most business buyers will get cold feet well before the closing table and will walk away from the purchase.
If you have been thinking for a while about the possibility of selling your business, 2015 could be the year for you.
So you are in the process of or planning on selling your business. You will need legal help on document preparation and tax advice on deal structure. What’s the big deal, right? You have been with the same CPA and used the same attorney for decades. They know you and look forward to helping you with the transition. Not so fast…
Here are some common tax issues which deserve your consideration in the early stages of selling or thinking about selling your business. But, of course, before making any decisions, you should consult a tax accountant familiar with your contemplated business sale.
Seller paper, SBA financing and buyer cash often comprise the three major components of a business purchase. However, what happens when a really good buyer (as perceived by the seller) wants to buy the business, but a gap persists between what the buyer is willing to pay and what the seller will take?
Under the above scenario (which is fairly common), a business broker or other facilitator must get creative in conceiving other sources of payments to the seller which are palatable to the buyer. Let’s discuss some to them…
When the time comes to sell your business, it will be important for you to understand which type of buyer your prospective buyer is. They typically fall into three categories: