Review Category : Small Business

When Is The Right Time To Sell Your Business?

There are different reasons why business owners decide to build a business.  Some do it for their family legacy.  Some do it for the potential of a big cash out down the road.   Some just build a business so they don’t have to work for the man, and get the business to generate enough income to support their lifestyle.   Whatever may be the reason you start a business, the question will come up at some point on when the right time (if at all) will come to eventually sell your business.  Here are some smart money moves thoughts on when may be a good time to sell your business. Historically low capital gain rates–  Currently, we have long term capital gain rate of 15% on most items, especially if you are considering doing an asset sale of your business.    It has been very uncertain where this rate will head in 2016 or 2017 with a new President,  but 20% is ...

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It’s SIMPLE the deadline is October 1st

After an owner makes heads or tails at the end of the year, they will usually determine whether or not money is left behind for setting up some sort of long term retirement plan within their business.   Since there are so many people setting up individual LLC’s or home based side businesses, you need to keep a close eye out this time of year for setting up one kind of retirement plan, a SIMPLE IRA.   The deadlines are just around the corner in the next few weeks, so could this be the right type of retirement plan for you? A SIMPLE IRA (Savings Incentive Match Plan For Employees) was first available to small business owners in 2001. A SIMPLE IRA plan is an IRA-based plan that gives small employers a simplified method to make contributions toward their employees’ retirement and their own retirement. Under a SIMPLE IRA plan, employees may choose to make salary reduction contributions and the employer makes ...

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Six Important Lessons For Every Entrepreneur

Most people daydream about the idea of running their own business.  The freedom to have no boss, set your work hours, and control your own financial destiny.  However, running your own business doesn’t come without taking on some bumps and bruises.   Here are ten important lessons that every entrepreneur should keep in the back pocket. Entrepreneurs Are Always Overly Optimistic-  I often use this phrase with the works; irrational exuberance.  Be very careful of letting your own rose colored lenses cloud the quality decision making your company needs based upon the facts. Measure Twice And Then Measure Again- No matter how many pro forma sheets you run and how many classes you sit through, nothing can prepare you for the certainty of uncertainty.  Make sure to margin for error in the beginning. If It Doesn’t Smell Right, Don’t Do It- You’ll have lots of salespeople wanting to sell you different solutions or products for your business.  If they don’t pass ...

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How Much Money Did My S Corporation Make

When business owners set up an S Corporation and creates a business entity, it is usually an accountant or bookkeeper (or both) that crank out the profit and loss statements for an S Corporation owner.   What can be confusing at the end of the year, because an S Corporation owner has multiple methods to receive cash through the business, is to actually figure out what you made in the business.   Taxes in many cases can be even more confusing to the S Corporation business owner.   Here’s a ‘your smart money moves’ breakdown to figure out just how much you made in your business. Salary- When you own an S Corporation, the IRS has salary guidelines on how much you should be paying yourself.  The IRS has created an outline of what’s called “reasonable compensation” that should be paid to the owner.    There are a myriad number of factors including industry averages, number of hours worked, and what is being paid ...

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How To Pass On Your Family Business

You have spent 15, 20, or even 30 years building up a business that you plan to pass on to your family.   Now, most of your time is spent laying out your future travel schedule, perfecting your golf game, or thinking about lazy Sunday afternoons hanging out having fun.   You are finding it hard to get away from the business because it still requires your attention, and now you are wondering whether or not your son or daughter are even interested in taking over this family business that runs like a machine.   How will you be able to pass on your family business that you have worked so hard for your entire life? Unfortunately, most business owners are so frantic running their business to create top line revenue that they don’t spend the time to lay out their own succession plan.   If you pass the business on to only one child, will there be some sort of sibling rivalry?   If ...

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Does Your Business Need A Buy-Sell Agreement?

One of the questions I will ask a business owner in my interview process is “Do you have a business will?”  By this line of questioning, I am simply asking what happens to the business if you die.   Some businesses have one or multiple partners and others businesses are owned by a single individual.   Far too often, most owners after they have built a successful business don’t take the time to flesh through the details of what will happen with the business in the event of death, disability, retirement, etc. One of the most important discussions for any owner is how to install a buy-sell agreement.    The buy-sell agreement is typically between partners or co-owners, although it could work with an outside third party if there aren’t other owners in the business. Think about this almost as a premarital agreement between two parties about the value of the business and what will get paid out to the other owners family ...

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