Financial Freedom Tips

Posts Tagged ‘Exit’

We Purchase Your Business

In today’s dynamic business environment you’re either Growing or Going…out of business that is! If you’re part of the latter contingent and have prefabricated the decision to get out of a business but are unable to transition your business internally or sell it as an intact entity, full or partial liquidation of assets might be an appropriate exit strategy. Asset liquidation can wage swift cash and assist in diversifying equity. However, before you terminate your lease, sell a key piece of equipment, or disconnect your utilities, make sure you have a well-thought-out plan.

Getting out of business successfully requires careful planning from begin to finish. If you are looking at quality liquidation as a part of your exit strategy, think about incorporating the following suggestions into your plan to increase your chances for success.

1. Speak to your lawyer and accountant.

2. Establish the liquidation value of your assets; remember liquidation vs. retail value can differ substantially.

3. Identify the ideal venue and timetable to sell your assets.

4. Arrange the understanding at the most appropriate location with an expert.

5. Use a non-recourse bill of sale.

Understanding and incorporating these steps into your exit plan will not only help you recover as much money as possible, they might also help you achieve the freedom needed to oppose new endeavors.

It is important to note that the suggestions discussed above are intended to serve as a general overview to assist with the quality liquidation process. It is not a alternative for case-specific advice that only your lawyer and/or accountant can provide. Also, depending on the situation and necessity of business divesture, the cooperation of creditors might need to be considered. Cover your bases and speak to the experts before liquidating any assets that might be in question.

Initiate the process by preparing a current inventory of your business assets. Include photographs, serial numbers and a brief description of the condition of apiece item if possible. A thorough inventory will save considerable time and expense as you navigate the understanding process and can be invaluable if you are asked to wage documentation for creditors or the Internal Revenue Service.

Next, begin preparing your assets for sale. To elicit the ideal offers, take care that you do not diminish the appeal of your most marketable items by lumping them in with outdated or worn-out equipment, furniture or inventory. In most cases the most lucrative value of these lesser items might be in the form of a tax deduction, so why not donate them to an appropriate charity?

Finally, don’t overlook your intangible assets. For example, is your lease assignable? Are the business licenses, permits, patents or trademarks that you hold in demand? Can they be transferred? Is there a market for your customer list, contract rights or accounts? You might need to check with your attorney or accountant to determine what information and agreements are transferable but once cleared these types of assets can also wage a substantial return.

We Purchase Your Business (WBYB) provides cash offers for all assets in order to assist in the liquidation process. Please contact your WBYB representative for more information at www. WeBuyYourBusiness. com

We Purchase Your Business

For some, planning a business exit can be a predictable, methodical process. We know the competition; we comprehend market demands, know when we want to sell and might even know the actual date. But for far too many business owners, the business exit comes as a harsh reality and often unplanned event.

Protecting your business and assets against the dreaded six D’s of an unplanned business exit can give whole new meaning to the term “Disaster Management”. While apiece business might experience unexpected pitfalls, careful planning to ensure risk exposure is minimized can assist in keeping you in the driver’s seat when it comes to managing your company. Familiarize yourself with the six D’s of an unplanned business exit: debt, death, disability, divorce, departure and disaster. Know the enemy and look to address all six D’s in your operating and purchase / sell agreements.

The Six D’s of an Unplanned Business Exit

Debt:No one goes into business and plans on it not succeeding, but 40,000 businesses change apiece month in the United States. When debt exceeds revenue, it is critical to exit timely in order to minimize loses. Understanding limitations and protecting critical assets are key to successful divesture.

Death:Many businesses are solely dependant on their owner’s abilities, relationships, and passion to drive success, and when there is a death of an owner or partner of a business, it can have significant impact to a business nearly immediately. While no one wants to think about their own demise, the strength and longevity of a business relies on being healthy to plan for such a critical loss even if it means downsizing or reorganization. The survival of a business in relation to key individuals needs to be evaluated and exit strategies planned accordingly.

Disability:Unbelievably, death is not as likely to end the business as a disability. A disability to a business partner can place a significant drain on cash flow, regular workloads, and excess down time, all of which can be devastating. Insurance and financial planning towards alleviating such an impact needs to be carefully evaluated especially when dealing with small business begin ups where funding and resources are limited.

Divorce:No one wants to plan for a business or individualized divorce, yet while Pre-nuptial agreements might be gaining in popularity many people never look to manage such impact to their businesses. What happens when the partners can't get along? Or worse, you inherit another partner due to a individualized divorce settlement? Exiting the business might be the only substitute you are provided.

Departure:It does not sound as bad as death, but it can wreak the same results. A partner, key employees, or other resources decide to go to the competition, retire, burn out, or win the lotto. When they leave, how does this impact your business going forward?

Disaster:If the five D’s above where not enough to impact your business, there are no limit to the other disasters that might occur that were never planned on: robbery, sickness, employee theft, employee turnover, natural devastating events, etc. In today’s post Katrina, 911 world the impact of the chaos theory is enough to keep even the ideal business minds awake at night. Plan for the worst; strive for the ideal and know when to get out if need be.

For the typical business owner, apiece one of the six D’s has special demands on the family, income, taxes, and control of assets. An agreement, commonly called buy/sell agreements, can be used to plan for the impact associated with the dreaded six D’s. A successful sustaining business exists as a separate entity from individualized concerns and risk can be reduced by developing mutually clean and equitable agreements prior to these events occurring.

Business is an evolution and travels a diverse path. While some might look on an unplanned exit as a unfortunate others might see an opportunity for growth and freedom.

www. WeBuyYourBusiness. com

My neighbor asked me, “Why would anyone sell a successful company?”. He could not comprehend why anyone would leave a business that was doing well. Of course successful companies get sold all the time.

So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other individualized reasons. Usually the business is fine but the human being running the business needs a change. To comprehend this superior it is key to comprehend the other options for exiting a business.

Close the Business/Liquidation

Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are injured by this type of exit.

Accident, Illness or Death

No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they unsuccessful to create an alternate plan.

Succession

Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, eligible and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead select the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare mortal can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So even though succession can be operationally successful it is rarely a financial success for the outgoing owner.

Sell

Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.

Selling on the other hand grants the business owner to decide their saint timing, maximize the value of the business they worked so hard to build, coordinate the use of the understanding proceeds for financial planning and align their individualized goals with the understanding of a business. Selling the business grants the business owner to create a wealth event and often significant on-going passive income without having to run their business.

Whatever they are, human reasons are always actuation and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that near owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a understanding as their saint exit plan is control. The business owner chooses to comprehend the value of their business and to proactively oppose the right buyer and the right price. By selling a business you select to exit your business by choice, not by force.

The professional team at Sunbelt Midwest can help you confidentially sell or purchase a business in Minneapolis, Milwaukee, Chicago, and surrounding areas. For more information check out our site at http://www. sunbeltmidwest. com.