• How to Prove Your Undeclared Income when Selling Your Business

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    One of the greatest challenges faced by entrepreneurs that have skimmed cash from their businesses, is to establish this income as ‘earned but unreported’. Without the ability to prove the existence of this income, the buyer will exclude it from the business value and decrease his/her purchase offer accordingly.

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  • How to Prove Your Undeclared Income when Selling Your Business

    Posted by:

    One of the greatest challenges faced by entrepreneurs that have skimmed cash from their businesses, is to establish this income as ‘earned but unreported’. Without the ability to prove the existence of this income, the buyer will exclude it from the business value and decrease his/her purchase offer accordingly.

    Read full post »

  • How Do You Handle Unearned Income when Buying or Selling a Business?

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    One of the common issues that arises when buying or selling a small business is how to tackle customer deposits and unearned income. This is an area that is often overlooked during the negotiations and can present unwelcome surprises for the Seller, the Buyer, or both, depending on how it is addressed, or if it is addressed, in the Asset Purchase Agreement.

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  • Yes, You CAN Sell a C-Corp

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    I was speaking with a business owner recently about selling his business. During the conversation, he told me his accountant told him he could not sell his business because it was a C-Corp. I have a feeling he misunderstood his accountant's statement. Nevertheless, it opened up an interesting dialogue regarding some of the difficulties in selling corporations in general and more specifically C-Corps.

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  • How to Do Due Diligence on a Small Business

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    When buying a small business, it's essential that you know what it is that you're buying. Many small businesses are sold based on seller stated revenue and earnings figures and without delving into the financials to make sure the numbers are substantiated, a buyer can end up overpaying for a business that generates revenue much less than what was stated.

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  • How to Get the Higher Multiple when You Sell Your Business

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    If a business in a specific industry is going to sell for 3 to 4 times earnings, what determines whether the buyer will be willing to pay the lower or higher multiple? In other words, if adjusted earnings are $800,000 and the industry multiple is 3 to 4 times earnings, what determines whether the buyer will be willing to pay $2,400,000 versus $3,200,000 for the business?

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  • Your Competitor Wants to Buy You Out—What’s Your Next Step?

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    It is not uncommon to be approached by a competitor that wants to buy you out to gain market share. If you have been thinking about selling your business, you may be tempted to start negotiating without really being prepared. Doing this will put you at a distinct disadvantage because you don’t necessarily know the value of your business, your business hasn’t been packaged property to show its value and there is no urgency factor to your competitor to move quickly or give you a good price because there are no other potential buyers in the picture. So what would be your best next steps?

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  • What is a Financial Recast and Why is it Important?

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    When valuing a business, it is important to identify and understand the economic value of the business. The economic value of a small business will typically be substantially different from the book value and from the tax mitigated value.

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  • What is a Financial Recast and Why is it Important?

    Posted by:

    When valuing a business, it is important to identify and understand the economic value of the business. The economic value of a small business will typically be substantially different from the book value and from the tax mitigated value.

    Read full post »