Building successful businesses from the ground up gives owners senses of pride and accomplishment -- and for good reason. However, there comes a time in every business owner's life when he or she will have to decide what to do with his or her company upon retirement. For some owners in Michigan and elsewhere, the sale of business may be the answer.
Most business owners in Michigan start out with small operations. Some choose to stay that way, while others work hard and grow their products to become nationally known brands. Massive growth is something the creators and original owners of the Flatout bread company have succeeded in doing. However, in order to help their business grow, the owners made a sale of business.
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 Michigan entrepreneur may not think about getting rid of a business at the start of operations. However, experts indicate that this is the very point at which the sale of business should be considered. Planning should continue from this point going forward. As an example of the importance of the issue, statistics indicate that an estimated 12 million small businesses in the nation will be sold over the next 10 years, attributed primarily to the imminent retirement of many Baby Boomers.
Business owners and entrepreneurs in Michigan might find it beneficial to learn more about the sale of an enterprise as described by the IRS. Each asset associated with the business is to be sold individually so gains and losses can be properly evaluated. However, because many businesses require a variety of assets to sustain operations, the assets should be classified appropriately.
Michigan businesses may be interested in an alternative method to take a company public. This method allows the company to save time and money while gaining access to a much greater pool of capital than when the company was privately owned.
For any business in Michigan, the Initial Public Offering of stock is a coveted rite of passage for any corporation that has proven itself to be viable and profitable. The increase in liquidity, the possibility of listing on a stock exchange, the additional sources of capital that comes with the sale of the stock and the improvement in profile are all desirable accoutrements to any successful enterprise. However, the process of creating and managing an IPO may be arduous, and the costs and fees associated with it can be expensive.
Selling a business in Michigan is likely to be a less stressful experience if the business owners have done their homework and has realistic expectations. While the sale of a business may sometimes throw up completely unexpected problems, some common pitfalls may be avoided when proper preparations are made prior to putting the business on the market.
Michigan residents may often hear about business acquisitions that ultimately allow a company to consolidate its market share or expand its range of product offerings. A less common though equally interesting event that takes place in the business world is a reverse merger.
Before a business is bought or sold, it is essential to the process that both the buyer and seller have a firm grasp of the value of the organization in question. Failure to completely take into account for the worth of a business can lead to a variety of problems, both legal and financial. There are a variety of factors involved in determining the value of a business, including goodwill, a client list, any real property, inventory and other assets, such as machinery and equipment.