There’s a range of key factors that can affect the value of a business. While some of these factors are outside of the owner’s control, steps can be taken to make the business as valuable as possible. Start planning well in advance and consider inserting an exit strategy into your original business plan. Then start implementing the factors that increase value and eliminate the factors that decrease the value. (more…)Read More
A business should be a constant ball of energy moving in different directions as the economy changes, new tools and innovations come to the market, the stress and strain from competitors and the ever changing demands of customers. This is what gets an entrepreneur out of bed every morning; the chance to do something different, learn something new, to see the rewards of hard work, to plant new ideas and watch them grow or to help someone do something they thought they may not be able to do. (more…)Read More
Since 2003, the top tax rate on most capital gains has been 15% for people in the 25% or higher tax bracket. Although a lower level tax rate has also been in place since 2003 for people in the 15% or lower tax bracket, this rate is only applicable until a person has enough income to cause him / her to enter the 25% tax bracket. As a result, for people incurring a capital gain from selling a business, most of them are in at least the 25% tax bracket so the top 15% rate is generally the rate they experience.
By Emily Maltby, The Wall Street Journal
October 2, 2009
The Small Business Administration ended its 2009 fiscal year on Wednesday, marking the close of a tumultuous year of lending initiatives to keep banks’ doors open. Despite the efforts to revive the credit market, the SBA approved less than 45,000 loans, down 36% compared to last year and 56% from 2007.
The loan volume reflects all the small business loans approved by lenders that are guaranteed by the government under the SBA’s flagship 7(a) lending program. In addition to the drop in number of loans that were approved to small businesses, the total dollar amount also fell drastically to $9.3 billion total, falling short of last year’s total by about $3.4 billion.
Lending, however, appeared to rebound in the later part of the year, which the agency attributes to (more…)
By Monty W. Walker CPA, CBI, BCB
February 26, 2009
The need to use retirement funds for the purpose of making non-publicly traded investments such as buying a building, purchasing a parcel of land or acquiring a business is growing. It is extremely common to find people whose liquidity is located primarily in qualified vehicles such as IRAs, Pensions and 401(k) rollover accounts. As people are being downsized from Corporate America, they find themselves at a crossroad of either taking the entrepreneurial road or finding another job. Many people are deciding to take control of their own destiny by starting or buying a business. Thus comes the problem.
Large bases of these people have been building retirement accounts so most of their money is located in qualified vehicles. If improperly accessed, they stand to be hit with a 10% penalty and often pay 30% or more in federal income tax. Depending on tax bracket and the state of residence, total federal and state taxes can encroach on 50%. The idea of losing from 30% to 50% on a distribution from a qualified account does not set well with most people. So, the question to be answered is, How can a person access his/her retirement funds to purchase a business (more…)Read More