Homeowner Digest

Dustin Cannon asked:


You have worked long and hard to build a home business which is profitable, respected, and in a state of constant growth. However, now you are interested in moving on to bigger and better things and you are interested in selling your home business and you want to know what you should do and where you should start. Selling a small business is a tricky process because in a number of ways it different from a traditional business. For example home business are ran out the home and therefore there is no selling of real estate. If you are interested in selling your business you might want to take a look at the following suggestions which can make or break the process of selling your home business.

If you are interested in getting rid of your home based business talk with your friends. These are the people that stuck by you when you were making the business work. Gosh, they may have even given you a helping hand and where there for you to lean on. Perhaps one of your close friends would be interested in running a small business. This is the first step to selling your business letting people know it is for sale. You can offer to work closely with them while the transition takes place. You will also have the comfort knowing that your “baby” (your home business) is in th right hands and being used for good. It is often hard to let go of the business you have created. Wouldn’t you just love to have the people close to you reap the rewards just as you have?

The next best thing to friends is family. Selling your home business to family can be a tricky process because there are emotional ties which can be effected if the deal goes bad. Make sure if you are going to sell your business to family there is a clear written contract and the people involved understand the commitment, both financial and personal, that it takes to run a home business and make a profit. Of course if your family have been helping you all along, this may be an extremely easy transition from brother to brother. Obviously how it goes is going to be different for different people.

Trade shows are also great places to get the word out that you want are interested in selling your home business. Perhaps there is a business similar to yours that is looking to increase their size and the number of their customers. By buying your home business it would increase their profit and their company size. Selling a small business can be extremely profitable if you understand how to market and get the word out that you are interested in selling.



business for sale

Ellen McNulty asked:


Becoming a seller on ebay can be daunting. Becoming a travel seller can be impossible, unless you know the secrets. My tips on selling on eBay can apply to all categories of items, but some steps are unique to selling travel.

The travel industry is highly regulated on EBay, as it should be. High standards keep out disreputable sellers and scam artists, and adds to your own company’s trustworthiness when you are approved by eBay..

1. Before you are even thinking about selling travel on eBay, it is important to get a username and email address just for eBay. Registration is free and only takes a few minutes. Register as a seller and you can use the same username to buy as well. Choose a name that reflects what you sell i.e., “Bermudabound” rather than “sexyblueeyes”. Other eBay members will come to recognize you by your User ID, so it’s a good idea to choose one you’ll want to use for the long term.

2. Your eBay name has sunglasses (i.e., read “shady character”) for the first 30 days, so don’t try to sell anything while you are wearing shades. Use this time to buy on eBay and learn good practices from other sellers.

3. Set up a PayPal account. EBay buyers feel more confident purchasing something from a seller who accepts PayPal. According to PayPal, “Listings that offer PayPal are 6% more likely to sell and experience a 5% average increase in final price.” Go to www. Paypal.com. Get a business account. Registration is free.

4. In the first 30 days, buy small items on EBay, pay for them promptly. I have always found eBay sellers to offer good values, provided that you check their feedback listing first.

5. Pay your seller promptly, because then you will always get positive feedback from your seller. Your feedback profile is the most important aspect of your reputation at eBay. Feedback is extremely important on eBay, as your future buyers can evaluate you at a glance. Even one strike against you counts heavily.

6. Create your “About Me” page on eBay. Use this page to tell other eBay users about yourself and your interests, your experience and your products.

7. While you are waiting the 30 days, also become a) ID verified and b)square trade approved. a) Get ID Verified through eBay as an extra sign of security for buyers. When a member gets ID Verified, a third-party company working with eBay confirms the member’s identity by cross checking their contact information across consumer and business databases. You’ll see the ID Verify icon in verified members’ profiles.

B) The Square Trade Seal is one way for sellers to show bidders that they are committed to high selling standards and have had their identity verified by a third party. You will need a credit card and your IATA, ARC, or seller of travel number. Both are requirements for selling travel, and you must place these numbers as the first lines of your ads on EBay. All members listing airline tickets, cruises, vacation packages, or lodging must be participants in the Seller Verify by SquareTrade Program. This program combines verification of sellers with ongoing monitoring. For instructions on this, go to eBay.com.

8. When you are ready to list your items at auction, sell small stuff first, building customers and credibility. Sell all items with no reserve, at the lowest price you can afford to accept, and fill all orders promptly.

9. Choose carefully what you will sell. You cannot sell some travel certificates, or vouchers and all listing must list the exceptions, blackout dates, and extra taxes and shipping charges. Travel agents, and other businesses selling travel services are regulated in eBay. According to the eBay rules for selling travel, “Businesses and individuals who sell and/or arrange air or sea travel or accommodations (but do not directly provide the travel service themselves) may list air and ship related travel items (i.e. airplane tickets and cruise trips), along with accommodations, on eBay only if they are licensed as sellers of travel lawfully able to do business in all 50 states and they themselves will be booking the travel for the winning bidder. Their listings should clearly set out their California seller of travel license number as well as any other license information required in other states. It is against eBay policy for travel clearinghouse affiliates, that are not actual agents booking the travel themselves, to list travel auctions on the site. Sellers are required to include the following disclaimer in all listings for travel exactly as it appears below and in a text size and color that can easily be seen and read by all bidders:

“By listing this auction I verify that I am the actual travel agent or travel provider and not a third party affiliate. The travel/accommodations in this auction will be booked directly through me and not an outside agency. I also verify that, other than the government taxes and related government fees stated within the listing description itself, there will be absolutely no additional fees, charges or after auction purchases associated with booking the travel within this listing.”

For travel services other than air or sea travel, businesses and individuals may offer gift certificates or coupons that are issued by a specific provider of travel, such as a gift certificate to a particular hotel. They may not, however, offer travel club memberships or “choice travel” certificates.”

10. Setting your price

Selecting your starting price requires balancing between how much money you want for the item, and what buyers will pay for it. As part of your pricing strategy, you can research the ending bids for similar items. You can look at similar item completed eBay listings using the completed listings search.

Be sure to include in your price enough to cover your insertion fees, final value fees, and your paypal fees. Set the LOWEST possible price you can afford to accept, but don’t offer something at a price you really don’t want to accept. Buyers expect bargains on ebay purchases, and you may, in the beginning, only get one bid on your item.

Attractively priced items (such as those priced at 99cents) may receive many bids, but unless it is a really outstanding items, the winning bidder may not have bid anything near your cost.

Setting your price involves not only deciding the starting price of your item, but also selecting pricing options based on which selling format you select.

Pricing for the auction-like listings:

The starting price is the lowest price you are willing to sell your item. Bidding will start at this price. Sellers have found that setting the starting price too high may discourage bidding.

If you do not want to sell your item below a certain price, you can specify a reserve price. A reserve price is an option you can use to stimulate bidding on your listing and reserve the right not to sell below the price you want. I do not recommend this option as it discourages buying.

Pricing for fixed price listings: In my experience, this is not a good way to sell anything, since the ebay method is based mainly on auction items. Enter the price at which you wish to sell your item or items as the Buy It Now price.

 

11. Build a store. EBay stores are free for the first 30 days. Afterwards, they are a small fee per month. ($15.95 / month) According to eBay, Store sellers see on average a 25% incremental increase in sales the 3 months after opening their Store.” Here is where you can list all those other items that are higher priced, but good value at a low listing fee - at Insertion Fees of .03-.10 per month - use good til cancelled

Note: The Insertion Fee covers a single listing (with any quantity of items in the listing), whether you list 1 or 1,000 of the same item. Final Value Fees range from 12.00% of the closing price for cheap items to

Over $1,000.01

12.00% of the initial $25.00 ($3.00), plus 8.00% of the initial $25.01 – $100.00 ($6.00), plus 4.00% of the initial $100.01 – $1,000.00 ($36.00), plus 2.00% of the remaining closing value balance ($1,000.01-closing value)

Auction and Fixed Price listings appear in your eBay Store as well as in eBay Search and Listings. The store allows your buyers to peruse your other items in addition to your auction items. Go to: http://pages.eBay.com/storefronts/openbenefits.html

12. Completing a sale: Remember, your reputation is of utmost importance. If your item sells successfully, the sale needs to be completed. This includes contacting your buyer, accepting payment and shipping the item.

13. I also recommend a “buy it now” listing, using the actual price of your item, i.e, what you really want. Using the “best offer” option allows members to make you a lower offer. Tip: Set a limit on “best offer” minimum bids, or you will get absurd offers of 1 cent or more.

14. Don’t use Listing Upgrades when you are new. Use your own hosting for pictures or eBay Picture Hosting.

15. For free templates for use on ebay, I like http://www.template-o-matic.com/

16. Examples of actions that are not allowed on eBay:

Bidding on your own item, or having family members, roommates or employees bid on your item (called shill bidding). For policy and examples, see Shill Bidding.

Interfering with another member’s transaction.

Accepting payment and sending an item that is significantly different from the item described in the item listing. For policy and examples, see Seller Non-performance.

Refusing to accept a buyer’s PayPal payment using a credit card when the seller included the PayPal logo in the listing.

Charging buyers an additional fee for their use of ordinary forms of payment including acceptance of checks, money orders, electronic transfers or credit cards.

If something goes wrong, including having problems with your buyer, there are options to help with your transaction problems.

17. Some ebay fees:

When you list an item on eBay, you’re charged an Insertion Fee. If the item sells, you are also charged a Final Value Fee. The total cost of selling an item is the Insertion Fee plus the Final Value Fee. The minimum insertion fee is 15 cents and goes to $4.00, depending upon the starting price of the auction. Final Value Fees:

Item not sold No Fee

 

$0.01 - $25.00**

8.75% of the closing value

 

$25.01- $1,000.00

8.75% of the initial $25.00 ($2.19), plus 3.50% of the remaining closing value balance ($25.01 to $1,000.00)

 

Equal to or Over $1000.01

8.75% of the initial $25.00 ($2.19), plus 3.50% of the initial $25.01 - $1,000.00 ($34.12), plus 1.50% of the remaining closing value balance ($1000.01 - closing value)

 

 

 

For examples of travel stores on eBay, take a look at: http://stores.ebay.com/Travel-Ireland-and-Britain_W0QQsspagenameZMEQ3aFQ3aSTQQtZkm

 

Ellen Mc Nulty is President of Lynott Tours, specialists in travel to Ireland and Britain.. Lynott Tours has been selling travel for 38 years, and can be found on the Internet at www.lynotttours.com and www.cruisetourplanners.com as well as www.australiatravelmaster.com



Ontario business for sale

Bill Henthorn asked:


The obvious answer is when you have a buyer with cash ready to buy. The serious answer is when you have had a pretty decent three-year run with a rising profit each year. A buyer likes to see increasing profits each year. They also like to see bills paid on time and no delinquent debt. A steady deposit flow in the bank, little employee turnover and increasing table occupancy are all signs of a healthy business.



Health or Intended retirement



These both are legitimate reasons for selling a business. A key partner’s death would be another solid reason. Any time you wish to sell a business, you will be asked why you are selling and walking away from a sure income. The reason must stand scrutiny and in any case the business numbers must back up your asking price.



Selling an existing business vs. starting one



According to industry statistics, the chances of a new restaurant making it and being live and well at the end of a year are one in ten. The odds for success are not very good even for an experienced owner.

Buying one with a following that has been around for a while and has healthy numbers would seem to be a better gamble on the part of a new owner. If your business were one of these, then almost anytime would be a time to sell.

After the first of the year would seem to be a good time to sell as the owner has gotten the benefit of the holiday business and the next few weeks may be slow as the public recovers from holiday spending.

A new start up has the problem of marketing a new entity and making the potential customers ready to try your company out for the first time. This marketing is far different than what an existing business would do.



Hotel and Resort business selling time



If there is a natural time of the year when the tourist business slows down, then that is the time to make a sale final. The old owner would have gotten full value from his ownership and the new owner will have to live through the slow period.

Of course the new owner if he has his wits about him would know this and take this into consideration when finalizing the sale. If he is unaware of this natural slow time then he has not done his homework or the broker working for him has fallen down on the job.

This slow time may work to the new owner’s advantage if he plans to change the décor or the menu of the restaurant. It is also a natural time for employee turnover as this period is usually one for short layoffs of staff. A full-scale grand opening can be advertised for several weeks, with the mandatory invitation of the press, radio and TV. Any organization, a new owner belongs to should be invited in for a special evening of their own. Birthdays that fall within a week or so of the grand opening could be given special consideration.

If there is special time of the year for your business, use it

If there is a time that your business is really humming, use it to advantage to show off what your business is like. Any new potential owner wants to see activity in a business they are thinking of purchasing. These active weeks or months can be used to show the possible new owner what they can expect if they become the owner.

You would need to make it clear that this is a normal occurrence, but not a year around day-to-day example of the business’s operation. But there is nothing wrong with showing the business off at its best



After tax time, time to sell



Speak with your accountant as to a better time to sell your business as far as taxes are considered. All expenses related to the sale of your business can be written off against the sale. It may be better to make the sale final in a year where you have little other income. In other words run the company to the end of the year and then sell it after the first of the year. Make sure you get professional advice that is specific to your situation.

It may be possible to make a three way deal out of the sale to cut taxes for the present owner. Maybe a sale could be made to another member of the family with no tax problems and then the sale to the new owner. It is a possible way to get money to an heir.



Cut expenses



It may be worthwhile to lower your inventory as low as possible and also cut out any other expenses without hurting the business. This could include some advertising that is done on a monthly basis or similar expenses. If the sale is going to be final in two months, then cutting out non-essential spending makes sense, as the new owner will probably want to change things to their way of doing things.

Any long-term agreements that come up or are up for renewal should be discussed with the new owner before committing to them. Make sure they are transferable to the new owner and that is acceptable to both parties. The last thing you want to happen is a last minute problem that could jeopardize the sale.

Any repairs that can be delayed without hurting the business should be put off until after the sale is final. Maybe the new owner will replace rather than repair. New signs or roofs should be discussed with the new owner before taking on the obligation.



Conclusions for a time to sell



As you can see there are many situations that make it the right time to sell. Each deal is different and will have critical times that steps should be taken. The owner would be well advised to make a list of these criteria and use this list as a guide for timing the sale. After collecting the information as to the best time to be out of the company, the owner can plan to try to make the sale happen at that time.

Sell the company if possible after a profitable run of years. This gives validity to your asking price. Businesses with this income history are sold for a premium compared to a business that is just starting to make money. The money history is one of the most critical factors in the sale of any business.

Tax considerations, seasonal timing or a sale prompted by health or retirement reasons are all valid times to sell. If you are lucky enough to get more than one prospect bidding on your company, then you are certainly at the right time to sell. As stated at the beginning of this article the right time does turn out to be when you have a buyer willing to buy. A cash buyer is a thing of beauty and should be treated well.



Ontario business for sale

Dave Kauppi asked:


The sale of business is a challenging and difficult transaction with several complicated aspects. Whether it’s the complete sale of a business or simply the sale of a partial ownership interest in a company, one of the most troubling issues created by this disposition is the manner in which capital gains and other taxes are addressed. There are not many options available to a business owner, and the few that are come accompanied by complex rules and regulations. There are also restrictions that can increase future risk and possibly trigger IRS penalties.

We are always looking for ways for our business sellers to maximize their transaction proceeds while keeping as much possible through the use of intelligent tax planning and deal structure. I asked Dan Carroll from Brook Hollow Financial to explain a unique way to defer capital gains taxes that are the result of a business sale.

Large Tax Bill Due upon Sale

Capital Gains, Depreciation Recapture and even Income taxes may be levied against the proceeds of the sale of the business. Depending on the initial amount invested and how much the business has grown, these taxes can consume much of the sale price. Currently the Federal Capital Gains Tax stands at 15%. Most states have a Capital Gains Tax as well, with the total amount often exceeding 20% of the gain. We believe that these rates will have near term upward pressure caused by the need for the Treasury Department to make up for the $800 billion shortfall that will result from the repeal of the Alternative Minimum Tax. Other taxes, particularly if held in a ‘C’ Corp., can exceed 60% of the transaction.

Loss of Regular Income

When a business is sold, the owner’s cash flow stops as well. Therefore, the amount of money that was being produced needs to be replaced. Without this regular income, former business owners are left with a significant gap in what they receive each month and must alter any plans or budgets accordingly.

What to do with the Proceeds

Another major challenge that a business owner will face is what to do with the proceeds of any sale. There are many ways to put this money to work for you, but this often means accepting significant risk and investing in markets without much experience. Alternatively, sellers might mitigate risk, but only at the cost of getting a very low return. Either way, inadequate returns and potential loss of capital are serious risk factors that must be considered.

Need to Mitigate Future Risk

Among the challenges presented by investing the new capital is that there may be different goals for the individual at this stage of his or her career. If the sale is prompted by a desire to move away from daily management and responsibility, or simply to cash out at a good time in the market, the owner may want to revisit his or her goals. A review of the financial needs and expectations may reveal a requirement for total investment certainty. While these alternatives do exist, most do little to provide a reasonable return and can make planning more difficult with these limited resources. The need and desire to mitigate future risk should play an important role in any decisions about your investment plans.

The Traditional Business Sale - Cash Transaction

The cash transaction option is fairly straightforward. The seller is paid cash from the buyer. After any loans or other debts are paid, the funds are then made available to the seller. At this point, the seller must pay federal and state taxes on the proceeds, and then the remaining balance is left to invest. This drastically reduces the principle and lowers any future returns. The stock market and other liquid investments carry very significant market risk, and the individual could lose some or all of the money. On the other hand, the individual could place the money into a guaranteed investment such as a certificate of deposit, but the returns will drastically lag other possible alternatives. Investing on your own requires some planning and active management of the portfolio, but more importantly, it may provide for unpredictable future income necessary to manage and care for an investor and his or her family.

Another Approach - The Installment Sale

The Installment Sale is a mechanism that has been available since the 1930’s. In this type of transaction, the buyer of a business agrees to pay the seller a certain amount of money over a fixed period of time. Under this approach, the IRS has ruled that only the amount of distribution in any given year is subject to any applicable taxes in proportion to the total due. The problem here had been reliance upon the buyer to continue to make the payments promised. Often times the business is run poorly and is no longer producing enough revenue to make the promised payments. There has always been recourse in these transactions, so that if the buyer did not live up to his obligation, the seller could foreclose and reclaim ownership of the business. However, this offered little protection if the business has not been run properly or the value lowers for other reasons, since the original seller would now reclaim a much less valuable business.

An Improved Approach - The Installment Sale with Guaranteed Annuity Payments

There is a way to ensure that these types of transactions could still be utilized while eliminating the possibility of default. The transaction takes place as described above, only there is a second transaction that occurs simultaneously. At the time of closing, the buyer purchases an annuity from an A+ rated Annuity company. Therefore the seller receives a guarantee that regardless of the future strength of the business, the payments will be made as agreed upon, and all of the tax deferral benefits remain intact.

The benefits of this type of transaction are as follows:

Seller is able to sell the business without future risk

Tax-deferral creates much greater taxable equivalent return

Flexible planning allows for specific plans tailored to individual needs

Stabilizes future income with certainty for life

Much larger total benefit over time - guaranteed

Payments can continue to pass on to heirs in the event of death

Eliminates need for expensive life insurance

Requires no management responsibility

There are no direct or on-going fees

Expedited closing

A simple way to look at this plan is to compare it to an IRA. With the IRA your investments get to grow on a tax deferred basis for many years and you get the benefit of earning investment returns on the amount not paid in tax. When you draw the funds out of the account, you are then taxed at your then current rate. With the guaranteed annuity installment sale, you may elect to take a portion of the business sale proceeds at close and pay all of the appropriate taxes on that portion.

You then could structure the guaranteed annuity to begin paying you a certain amount starting in 5 years for another 20 years. The investment would be allowed to grow tax deferred for that 5-year period. When you started taking distributions, you would be taxed at the rate you would have been from the original sale transaction. The important thing to remember here is that instead of receiving the entire distribution at closing and paying a huge tax bill up front, you are taking 1/20th of the distribution each year and paying 1/20th of the tax. The remaining portion of the deferred tax stays invested and earns income over the 20-year period. This substantially increases your return on the deferred portion of your sale proceeds.

This mechanism is a great way to secure your proceeds with guaranteed payouts, no ongoing involvement or management responsibility, and beneficial tax treatment. This will ensure the highest possible taxable equivalent return when compared to any fixed-income, guaranteed investment. Remember in a business sale the important number is how much you get to keep.



Ontario business for sale

Kris Koonar asked:


Have you been scouring through all those home-based business opportunities on the Internet looking for the perfect niche? Have you invested in a couple of them and realized that the home-based business you picked was not what it seemed at first? Have you watched dozens or even hundreds of multimedia presentations while visions of dollar signs danced in your head?

If you’ve answered “yes” to any of the questions above, you may be facing some difficult decisions regarding starting a home-based business. Do not part with another cent of your hard-earned money until you thoroughly read this article about what some home-based business sellers do not want you to know.

Every day millions of people dream about owning their own home-based business. What’s not to dream about? The opportunity to work the hours you desire and make an extraordinary sum of money is an intoxicating idea. In fact, it can be downright addictive. In response, thousands of new home-based business opportunities spring up every day that promise investors easy riches and the lifestyle that comes with ultimate success.

Most new business opportunities are quick to tell you about all the great things about their particular business model. Flashy websites, well-crafted audio presentations, and difficult to ignore graphs and charts are all part of the equation. Lost in the throes of all the excitement is that many people that buy into these programs do not consider the downside. Let’s take a look at some of the downsides that many of these businesses conveniently forget to mention.

Most home-based business opportunities leave out the fact that you will have to SELL…SELL…SELL! You should ask yourself if you like selling? Most business opportunities require you to be an expert salesperson. That’s what business is all about. Contrary to what you may believe, selling is an art. The person who may have gotten you to join in the first place might actually be making a lot of money, but again they may be a great salesperson blessed with a golden tongue (they sold you didn’t they?). So unless you really like to sell, you should be careful about the business you invest in. The art of selling is not something that everyone can do. It takes a type of dedication that has to be immune to rejection and the ability to persevere through difficult times. The fact is that most people hate selling so much that they never really succeed in their home-based business.

Did you really think the product your home based business offers will just “sell itself”? Many of the home-based business opportunities bandied across the World Wide Web indicate that their products do in fact, sell themselves. This is a definite warning sign. Very few ideas sell themselves, and in the rare occasion that an idea is so extraordinary that it would sell itself, it usually takes an inordinate effort to get the word out. A huge mistake that most first time home-based business owners face is not having enough cash to invest in advertising.

Advertising, of course, is the medium through which a product or service gathers name recognition. A basic rule in advertising 101 is that in order to be effective advertising must be consistent. It must also target a specific group of people that are likely to buy. You wouldn’t target a sports product to those who detest sports, would you? Contrary to what many home-based business sellers might tell you, very few buying decisions are impulsive. This means that a potential customer might have to see an advertisement for your product or service dozens of times before they decide to make a purchase. So if you business plans is to just invest a few hundred dollars on advertising with the hopes of gaining thousands of dollars to reinvest—think again! In order to get sales rolling you need to make a bigger commitment than that. Think about the vast amounts of money that change hands for a thirty second Super Bowl commercial. If you don’t think advertising works, then it’s already too hot in the kitchen!

Most home-based business sellers promise you that once you sign up there is very little work involved. It’s amazing that after all these years people still believe that you can get something for nothing. Can you imagine going into a job interview and expecting not to do any work? Do you think that you will be paid to just sit back on a white sand beach in some tropical paradise and drink margaritas all day while your bank account continues to grow and the good times continue to roll? If you’ve got that mindset, it would be wise to shed it in favor of a more logical approach. Of course, without proper advertising, you are not going to get very far. If you are spending your time trying to close unqualified leads then you are not going to have much time to lie on the beach and soak up the rays.

One of the ways you can get around some of these important considerations is to look for a home-based business that automates the sales process. Without automation tire-kickers and time-wasters will rob you of your valuable time. If the sales process is automated, you may be onto something. Think about the time you will save if you don’t have to track down each client and negotiate a deal. If you are on the edge of investing in a home-based business, be sure to ask if the business opportunity you are about to invest in has trained closers that work with you to close the coveted sale.

Passive income is the golden word in which most home-based businesses sell the dream of ultimate prosperity. In our society people continuously dream about having the freedom to do whatever they want, whenever they want. Passive income is income that you basically do not have to do very much for in the present. That is, it has been established already. While passive income is generated in the present, it is a result of PAST efforts. The foundation was previously constructed by people who had to work diligently and productively in order to reach their goals. Think about someone who owns a rental property and makes a nice income every month from rent. That property did not simply materialize out of thin air. The owner did not rub a magic lamp three times and receive three wishes for his efforts. It looks like the property owner has done nothing for that income but the truth is that they had to do a lot of work and build their savings in the PAST in order to be able to have enough money to buy that rental property.

Do not get sold on the idea that purchasing a home-based business will give you immediate passive income. This is a pipe dream that can cost you both time and money. Whatever endeavor you wish to pursue takes dogged determination, resiliency, and getting your hands dirty in order to succeed. You have to work and pay your dues before you can generate positive cash flow. This article is not trying to dissuade you from pursuing the dream of a home-based business - not at all! In fact, there are hundreds of thousands of people who have succeeded in starting their home-based business. What is being suggested is the fact that wealth and prosperity do not come easy. If they did, then wouldn’t everyone be working from home by now?

Starting a home-based business is a plausible investment. However, it takes hard work at first, but if you stick with it and demonstrate the ability to work through difficult times, you will be rewarded in the end. This brings up the last success factor that most home-based businesses neglect to tell you. Their advertisements show you flashy cars, luxurious homes, pearly white beaches, and vast landscapes that are usually the playgrounds for millionaires. The truth is that pursuing a home-based business takes a serious commitment of time and effort. Very simply put, you get out what you put in. A business opportunity is just like a car. If you continue to pump fuel into it, make sure it is properly maintained, and get the oil changed every couple of months, it will perform at its peak for a long period of time. On the other hand, if you let it run dry you’ll be waiting for a tow truck on the highway to oblivion!

The goal of attaining passive income is very possible if you pay your dues and do a little bit of hard work. Never forget that the time you put into your home based business is an investment. It is more than likely that your business will not take off the first day, week, or month after you start it. However, with persistence and a never-say-die attitude, you will probably experience success faster than others.

If you have the drive to make your home-based business a successful and thriving reality, visit our website for a free 6 Minute Movie. If you are interested in a home-based business that has an automated sales process and helps you close the sale then visit our website for a free no hassle presentation without pushy sales staff that pressure you into action.

This could be a watershed moment in your life. It could be a time where your fortunes do indeed change for the better, so it makes sense to carefully consider your options. After you view the free 6 Minute Movie on our website, you will have a better idea of what is entailed in the automated sales process, and how you wish to proceed with your dream of a realistic, successful, and quality home-based business.



quebec business for sale

Bill Henthorn asked:


Selling your business takes planning and careful documentation of information about the business. The financial statements have to be brought current and also all past information say for the last five years should be reviewed for accuracy. A current inventory should be prepared if the business is inventory sensitive. A list of leases, legal obligations, loans to be assumed and other obligations should be made and classified. In short, all money matters of any importance should be noted and documented.



Expert help with the numbers



Any projections of future business should be explained and the facts that led to the conclusions should be detailed. Any problem areas should be listed and how the present owner or the new owner can resolve them. If a lease is about to expire, can it be extended and if so at what expense. If major repairs are required to upgrade the building that comes with the business, these should be noted and the estimated cost of the repairs. Once all of this is done, the owner should decide how he is going to market his business so as to attract prospective buyers. Is he going to go it alone or hire someone to help in finding a buyer? How is the asking price of the business being set and using what criteria. Is a professional business broker going to be brought in to help with all of these questions? The suggestion in this deal is an expert can be worth the expense as they can find buyers, help to set a realistic price for the business and make up a proposal that puts the business in the best possible light. They can provide the marketing that will help to sell a good business in a quick and efficient manner. The longer a business is up for sale, the more questions prospective buyers will come up with. A business that is profitable and selling at a fair price should sell rather quickly. In fact such a business may find itself in the happy situation of a bidding war between buyers.



Owner help and other agreements



The owner should have the answers to whether his employees will stay if the business is sold. He should have a valid reason for wanting to sell the business.

Details such as cleaning up the office or the work area while minor in the scheme of things can be major as to first impressions. People are influenced by their first impression and this should be made positive if at all possible. Clean and efficient is the key impression that helps to sell a successful business. A sloppy environment gives the impression of a sloppy operation. Clean and snappy is the impression the seller should present to prospective buyers.

Make sure any agreements you have between the business and a third party are transferable to the new owner. Do not get caught unprepared to answer this type of question. The new owner would be foolish not to want to know these details. This information has the power to make or break a pending deal. If the building you are located in is rented to you, make sure your rental agreement can be transferred to the new owner. The secret here is to keep the purchase as simple as possible. Try to keep these details from becoming major discussion points.

Do your homework and know the answers to obvious questions like these. If you are asked a question that you are not sure of the answer, do not guess but state you will get the answer as soon as possible.



The presentation of facts



You have gone to the trouble of collecting all of the relevant facts associated with your business. Put them a pleasing presentation form. Have the numbers certified by your accountant. You do not want the buyer’s people to find errors in your information or the math. Make sure the information is presented in a readable form and it can quickly be understood.

A business broker can take all of these concerns off your plate. They do this all of the time and probably has staff that ensures the information is presented in a professional manner. Impressions as stated before are important and this is one of the areas of expertise that a business broker brings to the deal.



Setting a price and help doing it



A certified broker can help to set a realistic price for the business. The certification means they have passed a detailed exam on how to come up with a price for the business. They do not just pull the selling price out of the blue, but have valid reasons for it that can be explained to the buyer. This gives the price creditability in the eyes of the buyer and it is from an unbiased third person. This can be important in getting a sale, which is completed near your asking price.

They can also be very good in the difficult negotiation stages of the sale. They can keep the buyer and seller appeased and moves the deal forward without the tenseness that can develop during serious deal making. Since they are seen as a somewhat disengaged third party, they can remain cool under the strain of making the deal. Business Brokers are inevitable in selling a business. Check out our article on Role of business brokers in Selling a business for a clear idea.

Remember they have been here before and they may have a better idea of what will make the sale come together than either the buyer or the seller. Take advantage of this experience and skill they have acquired over time. A quick sale at a good price is what all parties are looking for and a good business broker can make this happen. This is what they do for a living year round and they do not have an emotional interest in the sale of the business like the old owner may have. On the other hand they are interested in making a good deal for all parties, as that is how they make their money and keep their reputation as a good broker.



Prepared answers prevent cooling of buyer



If there are legal considerations that will need to be complied with, make sure you have a legal opinion ready to share when discussing this with the buyer or their agent. This is where a legal opinion from your attorney may come in play. In any event have it ready so that the process is not delayed. Hot buyers and sellers can cool off given enough time to let it happen. Keep the ball moving forward with as little delay as possible. Anticipating the questions and having the answers ready keeps the ball moving forward toward making the sale. Stagnation of the discussion can be deadly to the deal. Be prepared with the solutions to potential questions or obvious inquiries from the buyer. Be pro-active and not reactive to the selling of your business. Think of questions you would have and be prepared to answer them in detail if it is necessary.



Conclusions and terms



Have a ready answer to the question of whether you will help finance the purchase or not. If you are willing, make sure you have given some thought to the terms you would find acceptable. You may be able to get a higher price if your terms are good enough. This is one of the ways to get your asking price with little haggling. The art of all deals is each party must feel good about the final result. Do your part in making this happen.



business for sale

Dave Kauppi asked:


If you’re a family business owner, chances are you’re thinking about what you’ll do when your working days are over. As William Rothwell, a professor at Penn State University, noted in the foreword to Exit Right: A Guided Tour of Succession Planning for Families in Business Together “More than 40% of the people who run the closely held operations that comprise 80% of the North American economy will retire by 2007.”

Even if you currently view the idea as unlikely, you are wise to consider the possibility of selling your material handling company. The decision to sell is all too often a reactive one rather than a proactive one — the primary reasons are a serious health issue, owner burnout, the death of a principal, general industry decline or the loss of a major customer. Advance planning can ensure that you exit your business from a position of strength, not from weakness due to necessity.

1. The biggest mistake business owners make is waiting too long to sell. Have you ever heard, “I sold my business to early?” Compare that with the number of times you’ve heard somebody say, “I should have sold my business two years ago.” Unfortunately, waiting too long is probably the single biggest factor in reducing the proceeds from the sale of a privately held business. The erosion in business value typically is most pronounced in that last year before exiting.

The decision to sell is often times a reactive decision rather than a proactive decision. An individual who spends 20 years running their business and controlling their outcomes often behaves differently in the exit from his business. The primary reasons for selling are events such as a serious health issue, owner burnout, the death of a principal, general industry decline, or the loss of a major customer.

Exit your business from a position of strength, not from the necessity of weakness. Don’t let that next big deal delay your sale. You can reward yourself for that transaction you project to close with an intelligently written sale agreement containing contingent payments in the future if that event occurs.

2. Figure out what you will do with your time after you are no longer working sixty hours per week. We all create business plans both formally and informally. We all plan for vacations. We plan our parties. We need to plan for the most important financial event of our lives, the sale of our business.

Typically a privately held business represents greater than 80% of the owner’s net worth. Start out with your plans of how you want to enjoy the rewards of your labor. Where do you want to travel? What hobbies have you been meaning to start? What volunteer work have you meant to do? Where do you want to live? What job would you do if money were not in issue? You need to mentally establish an identity for yourself outside of your business.

3. Get your business ready to sell. Now that you are all excited about the fun things you’ll do once you exit your business, it’s now time to focus on the things that you can do to maximize the value of your business upon sale. This topic is enough content for an entire article, however, we will briefly touch upon a couple of important points.

First, engage a professional CPA firm to do your books. Buyers fear risk. Audited or reviewed financial statements from a reputable accounting firm reduced the perception of risk. Do not expect the buyer to give you credit for something that does not appear in your books. If you find that a large percentage of your business comes from a very few customers, embark on a program immediately to reduced customer concentration. Buyers fear that when the owner exits the major customers are at risk of leaving as well.

Start to delegate management activities immediately and identify successors internally. If you have no one that fits that description and you have enough time, seek out, hire and train that individual that would stay on for the transition and beyond. Buyers want to keep key people that can continue the momentum of the business.

Analyze and identify the growth opportunities that are available to your business. Get rid of that outdated inventory. The buyer will not pay you for it anyway and it just clutters up the place.

4. When you are wearing all the hats already, trying to sell your company yourself can hurt your business. A major mistake business owners make in exiting their business is to focus their time and attention on selling the business as opposed to running the business. This occurs in large publicly traded companies with deep management teams as well as in private companies where management is largely in the hands of a single individual.

Many large companies that are in the throws of being acquired are guilty of losing focus on the day-to-day operations. In case after case these businesses suffer a significant competitive downturn. If the acquisition does not materialize, their business has suffered significant erosion in value.

For a privately held business the impact is even more acute. There simply is not enough time for the owner to wear the many hats of operating his business while embarking on a full-time job of selling his business. The owner wants the impending sale to be totally confidential until the very last minute.

If the owner attempts to sell the business himself, by default he has identified that his business is for sale. Competitors would love to have this information. Bankers get nervous. Employees get nervous. Customers get nervous. Suppliers get nervous. The owner has inadvertently created risk, a potential drop in business and a corresponding drop in the sale price of his business.

5. To maximize your selling price, you must get multiple buyers interested in buying your material handling business. The “typical” business sale transaction for a privately held business begins with either an unsolicited approach by a competitor or with a decision on the part of the owner to exit. If a competitor initiates the process, he typically isn’t interested in over paying for your business. In fact, just the opposite is true. He is trying to buy your business at a discount.

Outside of yourself there is no one in a better position to understand the value of your business more than a major competitor. He will try to keep the sales process limited to a negotiation of one. In our mergers and acquisitions practice the owner often approaches us after an unsolicited offer. What we have found is generally that unsolicited buyer is not the ultimate purchaser, or if he is, the final purchase price is, on average 20% higher than the original offer.

If the owner decides to exit and initiates the process, it usually begins with a communication with a trusted advisor - accountant, lawyer, banker, or financial advisor. Let’s say that the owner is considering selling his business and he tells his banker. The well- meaning banker says, “One of my other customers is also in your industry. Why don’t I provide you an introduction?” If the introduction results in a negotiation of one, it is unlikely that you will get the highest and best the market has to offer.

You may have spent your life’s work building your material handling business to provide you the income, wealth creation, and legacy that you had planned and hoped for. You prepared and were competitive and tireless in your approach. You have one final act in your business. Make that your final business success. Exit on purpose and do it from a position of strength and receive the highest and best deal the market has to offer.



bc business for sale

Beth DaSilva asked:


Few people enter into business with any thought of how they will exit the business and realize returns in their investment of time, money & resources. Most entrepreneurs are too busy getting their business to a point that it becomes a profitable smooth running operation. A few years down the road, there comes a point when the founder may want to find a way to exit the business he developed. Some tire of the every day grind of running a homecare agency, some just want to diversify their assets and “take money of the table” and some just simply want to retire and do not have family or partners that are capable or willing to continue growing the company that they have started. If you consider selling your business, there are things that should be done, well in advance, in order to maximize what you can get out of the business.

1) What is your Business Worth?- The first step in deciding whether or not to sell your business is to get a clear understanding of what your company is worth. It may make sense to engage the services of a homecare industry expert to garner an honest assessment of company’s worth. This should be done well in advance of selling, and repeated periodically over the years, to give you an idea of what companies similar to yours are selling for. Not knowing what your company is worth may result in you either getting less than the business is worth or not selling your business because your expectations are unrealistically high.

2) Identify an Intermediary/Broker - There are many intermediaries that you can use to sell your business. Oftentimes, entrepreneurs first ask outside accountants or lawyers to help them. Some try and do it themselves, while some engage investment banks or experienced intermediaries. Most brokers and intermediaries work on some sort of incentive based scheme and consequently may try and get the contract by giving the potential seller a very high valuation for their business. It does not do you any good to hire a business broker who gives you a good valuation for your business and is ultimately unable to sell it. A good broker will give you an honest assessment of what your business is worth and start finding potential buyers for your business soon after they have started marketing your company. Find an intermediary that knows your business and has experience in healthcare mergers and acquisitions. This is the sole business of Fleetridge Pacific and we know the market of potential buyers and sellers.

3) Determining your Exit Strategy- Determining your exit strategy will help you and your broker identify what types of buyers will be interested in your company. What are you hoping to achieve when you sell your company? Do you want to continue to work with the buyer after the transaction is closed or are you looking to retire shortly after the sale closes? This will also help you, the broker and your other advisors, structure the deal as well as the transition to the buyer once the sale closes.

4) Enhancing Your Company’s Value- If after a financial assessment you are not satisfied with the valuation of your company or looking for ways to enhance value, identify how to enhance the value of your company through marketing programs, increasing operational efficiencies and exhibiting good fiscal & regulatory controls. You and your broker can identify specific actions on how to enhance current and future values for your company.

5) Understanding the Acquisition Process- Buying and selling businesses take tremendous amounts of work and can be quite stressful. Sellers should know before they start what the process involves and approximate timelines in which to get a deal done. They should also understand the roles of intermediaries and other consultants, such as accountants and lawyers, as they are an integral part of the acquisition/divestiture process. Not understanding the process can cause problems and frustration and ultimately lead to a very long or unsuccessful effort to sell your business.

6) Knowing the Right Time to Sell your Business- People don’t get into the homecare business with the intention of selling but at some point, people do make the decision to sell. Market prices tend to go up and down, even within the different sectors of the homecare industry, be it skilled certified agencies, private duty/homemaker services, DME and IV infusion. Knowing when to exit from our business can make a tremendous difference in the sale’s proceeds. There is some truth in the adage that you will get the best valuations when you don’t necessarily need to sell and the worst valuations if you need to sell desperately. Knowing when to sell can make all the difference



business for sale

Dave Kauppi asked:


When you are wearing all the hats already, trying to sell your company yourself can hurt your business. A major mistake business owners make in exiting their business is to focus their time and attention on selling the business as opposed to running the business. This occurs in large publicly traded companies with deep management teams as well as in private companies where management is largely in the hands of a single individual. Many large companies that are in the throws of being acquired are guilty of losing focus on the day-to-day operations. In case after case these businesses suffer a significant competitive downturn.

If the acquisition does not materialize, their business has suffered significant erosion in value. For a privately held business the impact is even more acute. There simply is not enough time for the owner to wear the many hats of operating his business while embarking on a full-time job of selling his business. The owner wants the impending sale to be totally confidential until the very last minute. If the owner attempts to sell the business himself, by default he has identified that his business is for sale. Competitors would love to have this information. Bankers get nervous. Employees get nervous. Customers get nervous. Suppliers get nervous. The owner has inadvertently created risk, a potential drop in business and a corresponding drop in the sale price of his business.

To maximize your selling price, you must get multiple buyers interested in buying your heavy equipment business. The “typical” business sale transaction for a privately held business begins with either an unsolicited approach by a competitor or with a decision on the part of the owner to exit. If a competitor initiates the process, he typically isn’t interested in over paying for your business. In fact, just the opposite is true. He is trying to buy your business at a discount. Outside of yourself there is no one in a better position to understand the value of your business more than a major competitor. He will try to keep the sales process limited to a negotiation of one. In our mergers and acquisitions practice the owner often approaches us after an unsolicited offer.

What we have found is generally that unsolicited buyer is not the ultimate purchaser, or if he is, the final purchase price is, on average 20% higher than the original offer. If the owner decides to exit and initiates the process, it usually begins with a communication with a trusted advisor - accountant, lawyer, banker, or financial advisor. Let’s say that the owner is considering selling his business and he tells his banker. The well- meaning banker says, “One of my other customers is also in your industry. Why don’t I provide you an introduction?” If the introduction results in a negotiation of one, it is unlikely that you will get the highest and best the market has to offer.

Because there is so much at stake you should hire a Mergers and Acquisitions firm to sell your heavy equipment business. You improve your odds of maximizing your proceeds while reducing the risk of business erosion by hiring a firm that specializes in selling businesses. A large public company would not even consider an M&A transaction without representation from a Merrill Lynch, Goldman Sachs, Solomon Brothers or other high profile investment banking firm. Why? With so much at stake, they know they will do better by paying the experts.

Companies in the $3 Million to $50 Million range fall below their radar, but there are mid market M&A firms that can provide similar services and process. Generally when you sell your business, it is the one time in your life that you go through that experience. The buyer of the last company we represented for sale had previously purchased 25 companies. The sellers were good business people, knew their stuff, but this was their first and probably last business sale. Who had the advantage in this transaction? By engaging a professional M&A firm they helped balance the M&A experience scales.

Engage other professionals that have experience in business sale transactions and especially the unique valuations of heavy equipment dealers. You may have a great outside accountant that has done your books for years. If he has not been involved in multiple business sales transactions, you should consider engaging a CPA firm that has the experience to advise you on important tax and accounting issues that can literally result in swings of hundreds of thousands of dollars. What are the tax implications of a stock purchase versus an asset purchase? A lower offer on a stock purchase may be far superior to a higher offer on an asset purchase after the impact of taxes on your realized proceeds. Is the accountant that does your books qualified to advise you on that issue? Would your accountant know the best way to allocate the purchase price on an asset sale between hard assets, good will, employment agreements and non-compete agreements? A deal attorney is very different from the attorney you engage for every day business law issues.

Remember, each element of deal structure that is favorable to the seller for tax or risk purposes is generally correspondingly unfavorable to the buyer, and vice versa. Therefore the experienced team for the buyer is under instructions to make an offer with the most favorable tax and reps and warranties consequences for their client. You need a professional team that can match the buyer’s team’s level of experience with deal structure, legal, and tax issues.



quebec business for sale

Paul Leach asked:


Tax Tips for Selling Your Business

Selling a business can be a roller coaster ride. From the emotional involvement inherent in business ownership to the practical considerations of determining pricing, finding a buyer, and completing the sale, business transfers present numerous occasions for stress.

Added to this the prospect of navigating government tax regulations, and sellers may be tempted to throw their hands up in the air in frustration! But if you are seeking to sell your business, be encouraged. By investing a bit of time to read this article, you can ensure that abiding by tax regulations remains as least “taxing” as possible.

Before You Sell

Once you decide that you are going to sell your business, there are several preparatory steps you should take in order to be able more easily to abide by tax regulations.

• Update any and all official records relating to your business.

• Complete all final collections procedures with your customers.

• Have ready appropriate documentations for the buyer.

o For instance, many buyers’ agents will request background information regarding your business. This may include profit and loss data, lease agreements if applicable, and any pending loans.

• If you have any outstanding issues with HM Revenue & Customs (HMRC) – be they tax, VAT (value added tax), or National Insurance issues – be sure to adhere to the appropriate procedures for resolving these issues.

Depending upon the type of transaction your business sale will be – i.e., large-business or small-business, whether the transaction involves changes to business directors, etc. – you may need to notify certain officials of the pending sale and/or follow certain additional regulations.

These include:

• Notifying Companies House if your business sale involves personnel changes with the secretary or directors. (Additional information and forms can be found on the Companies House website.)

• Following the Information and Consultation of Employees (ICE) Regulations if your business is of a certain size.

Tax Regulations

Once you have completed these preliminary preparations for the sale of your business, you must be sure as you complete the sale to continue to adhere to the legal tax regulations for business sales. These include regulations regarding capital gains taxes and value added taxes (VAT).

• Capital Gains Tax

A capital gain is defined as an increase in the value of an asset from the time you acquire it to the time you dispose of it, such as through a sale. The value of this increase is viewed as a profit, i.e. as income, and, as such, may be subject to the capital gains tax.

For the purpose of selling a business entity, if since the time you acquired your business, it has experienced a profit resulting from the sale of assets, then you may be required to pay capital gains taxes on these assets. However, if you choose to reinvest any or all of the profit in the purchase of another business, the law includes a provision under which you may temporarily escape the capital gains tax through an asset “roll-over” into your new business.

• VAT

Certain companies are required to register for VAT, or the value added tax, and this registration requirement depends upon several factors.

1) Sales Outside of the European Community – When an EC company services a non-EC customer, the servicing company may be required to register for VAT.

2) Dealing in Taxable Supplies – When a company supplies goods or services that are subject to the value added tax, the company may be required to register for VAT.

3) Acquisitions – When an UK company purchases supplies for import from a VAT-registered company in another EC country, the UK company may be subject to VAT registration.

If the company you are selling is a VAT-registered company, then you must either cancel your VAT registration with the HMRC or transfer your registration to the new owner. A registration cancellation may be accomplished by filling out form VAT 7, and a transfer may be achieved by completing form VAT 68.

Additionally, effective September 1, 2007, regulations guiding VAT record-keeping have been updated, and current law now requires that the business seller keep all VAT records following the sale of the business. Once the business is in the hands of the new owner, the new owner may request permission to retain the seller’s original VAT registration number. If permission is granted, then the seller is required to transfer the VAT records to the new owner. The one exception to this requirement is if the seller requests and receives permission from HMRC to keep the original records. In this case, however, the seller must still provide to the buyer certain information to enable the buyer to remain in full compliance with VAT regulations.

While these rules and procedures may at first seem overwhelming, by following them, business sellers can, in reality, reduce the overall stress that so often seems “par for the course” in selling a business. So before yielding to the temptation to buckle under the “taxing” weight of tax considerations, implement the tips offered in this article – one step at a time – and you may just find that the weight of tax regulations suddenly becomes a bit lighter on your shoulders!

Find other information about selling a UK Business at www.thebusinesswizard.co.uk

 

This article was submitted by Paul Leach of PGL Internet Services, a Sydney based Search Engine Optimisation company.



quebec business for sale