Michigan small business owners may be wondering if the time to sell their company is now or in the near future. There are many things to take into consideration, decisions to be made and actions to be taken if an owner is contemplating a sale.
A sale of a business touches about every aspect of an owner’s life. Accountants and financial advisers can help rework family cash flow projections, tax liabilities and estate plans. The owner will also have to decide if they are willing to work with the new owner setting up an installment arrangement if the sale cannot be completed in one transaction. Even though there may be more risk in an installment sale, the arrangement could be beneficial for income tax purposes. In some cases state taxes will need to be taken into consideration.
Whether a sale is anticipated or not, it is always a good idea to have an accurate, complete and current set of company financial statements. An accountant can work with the owner to make sure a reliable picture of the business is put together in those documents, which will usually be a crucial element of a company’s potential valuation.
The opportunity to participate in the sale of a business may be available once in a person’s lifetime. It may be one of the major changes that an owner experiences. The appropriate mindset and accounting records can help ensure a smooth transaction. To help oversee the whole process of a sale and to ensure accurate paperwork is generated and filed, most business owner’s value input from an attorney who has experience in these types of complex business transactions.
Source: Comstock’s, “Is It Time to Sell Your Business?”, Barry Brundage, Jan. 26, 2015