Month: February 2016

Sweat Equity Evaporates in Business Evaluation

Posted by | Feb 12, 2016 | ,

There’s Nothing Fair about the Fair Market Value of Your Business If you’re a business owner, you are acquainted with insomnia, 16-hour workdays and no weekends off. You used credit cards and borrowed from family and friends to keep your boat afloat. And just the time you think you’re on the Titanic, your business has its first profitable month. You’ve shed blood, sweat and tears, and now you want to somehow account for that sweat equity in the appreciable value of your business. It’s a good thought, but think again. The fair market value of your business will set...

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Should the Sale of Your Business Be Your Retirement Plan

Posted by | Feb 12, 2016 |

Over Valuation Is the Number-One Mistake if Your Business Is Your Retirement Plan It’s not uncommon for a small business owner to view the sale of their business as their retirement plan. They throw all their energies and profits into the business to bolster the valuation, so it’s not unusual they don’t have a 401(k) or IRA. That’s fine, if you can sell your business near its projected valuation. But most small business owners overvalue their sale price and often take less than anticipated. That’s why it’s important to create and maintain a personal retirement plan that isn’t dependent...

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Business Continuation is Contingent on a Plan

Posted by | Feb 12, 2016 |

Without a Business Succession Plan, Its Continuation is Doomed The successful transfer of a small business is dependent on funding sources and continuation documents to ensure a smooth transition from the present to future owner. The document needs to cover every contingency. Both parties agreeing to a business valuation at a future date may actually be the easiest part of the purchase agreement to draft. The harder scenario is to script the contingencies of death and disability into the buy-sell agreement, especially when family, friends and key employees are involved. When there is no continuation plan or the plan...

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The Futility of Unfocused Business Goals

Posted by | Feb 12, 2016 | ,

You Can’t Hit Goals When You Don’t See What You’re Aiming At Thousands of small businesses fail every month due to a lack of vision. It isn’t that they haven’t had an economic epiphany or inspired apparition. They just don’t see right. Many have experienced rogue thoughts that fire the imagination of ideas and invention. Indeed, many businesses are conceived in such moments of passion. But revelation in and of itself is never enough for a successful start up to gain traction. A business owner needs to determine if they’re seeing the world as it really is; seeing their...

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Every Small Business Start Up Needs a Plan

Posted by | Feb 12, 2016 |

The Entrepreneurial Spirit Still Needs a Business Blueprint The private sector generates the majority of jobs in America. Within the private sector, small business contributes significantly to job creation and is recognized as the economic engine that drives commerce in America. Thousands of business start ups occur every month, but many of them close their doors before their first year in business. Many times, the entrepreneurial spirit is willing, but the lack of a business plan weakens the potential for success. Rarely do you find a business plan among passionate entrepreneurs. Many first-time business owners have the emotional energy...

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