Is A Business Valuation Useful? Absolutely!

For many business owners, a business appraisal or “valuation” can furnish vital planning information and help mitigate risk. Consider the following: * Establishing a verifiable value for your business can show whether assets have appreciated at a reasonable rate. If not, the firm’s strategy may need to be adjusted. * Business valuations furnish documentation to support new financing. Lenders need strong evidence that their loans are properly secured, and a business appraisal can supply that evidence. An independent evaluation of business assets also may encourage lenders to offer favorable interest rates. * If you decide to sell the business, a
Read More

Incorporate or Not To Incorporate – That Is The Question!

One of the first decisions you face as a new business owner is whether or not to incorporate the business. The biggest advantage of incorporating is limitation of your liability. Your responsibility for debts and other liabilities incurred by a corporation is generally limited to the assets of the business. Your personal assets are not usually at risk, although there can be exceptions to this general rule. The trade-off is that there is a cost to incorporate and, in some cases, tax consequences. Should you incorporate? You might not need to incorporate. Depending on the size and type of your
Read More

Who Owes Self Employment Tax?

If you earned $400 or more of net profit during 2013 (as an example) from work as a sole proprietor or independent contractor, you may owe self-employment tax. That’s true no matter what your age – even if you’re receiving social security benefits. The tax is assessed on your net earnings from self-employment, which can include income from qualified joint ventures and partnerships, as well as fees you earn working as a director for a corporation. In this context, “earnings” generally means your income after deducting expenses incurred while operating your business. If you have multiple businesses, you combine the
Read More

Dealing With Death, Disability & Departure in Business

Every business should give serious consideration to how the company would deal with the death, disability, or departure of one of the owners. Like a will, a buy/sell agreement (also known as a business continuity contract) spells out how assets and other business interests will be distributed should an owner quit, become disabled, or die. Without such an agreement, complications arising from ownership succession may capsize an otherwise thriving company. The remaining owners might be forced to share management and profits with unskilled or contentious outsiders. They may be embroiled in legal disputes over business assets and liabilities. A firm’s
Read More

Why Every Small Businesses Should Establish Control

Every week reporters publish stories about companies that have lost thousands, even millions of dollars because of fraud. They recount the dreadful details of business owners who learned – too late – that a lack of basic controls left their companies vulnerable to pilferage, embezzlement, and other types of misappropriation. How do these lessons apply to small businesses? After all, small firms generally can’t afford to hire internal auditors or set up separate divisions to break up incompatible duties. While it’s true that a small company can’t always protect itself in ways larger firms might, management can establish controls in
Read More

Archives

Categories

Is A Business Valuation Useful? Absolutely!

For many business owners, a business appraisal or “valuation” can furnish vital planning information and help mitigate risk. Consider the following: * Establishing a verifiable value for your business can show whether assets have appreciated at a reasonable rate. If not, the firm’s strategy may need to be adjusted. * Business valuations furnish documentation to support new financing. Lenders need strong evidence that their loans are properly secured, and a business appraisal can supply that evidence. An independent evaluation of business assets also may encourage lenders to offer favorable interest rates. * If you decide to sell the business, a
Read More

Incorporate or Not To Incorporate – That Is The Question!

One of the first decisions you face as a new business owner is whether or not to incorporate the business. The biggest advantage of incorporating is limitation of your liability. Your responsibility for debts and other liabilities incurred by a corporation is generally limited to the assets of the business. Your personal assets are not usually at risk, although there can be exceptions to this general rule. The trade-off is that there is a cost to incorporate and, in some cases, tax consequences. Should you incorporate? You might not need to incorporate. Depending on the size and type of your
Read More

Who Owes Self Employment Tax?

If you earned $400 or more of net profit during 2013 (as an example) from work as a sole proprietor or independent contractor, you may owe self-employment tax. That’s true no matter what your age – even if you’re receiving social security benefits. The tax is assessed on your net earnings from self-employment, which can include income from qualified joint ventures and partnerships, as well as fees you earn working as a director for a corporation. In this context, “earnings” generally means your income after deducting expenses incurred while operating your business. If you have multiple businesses, you combine the
Read More

Dealing With Death, Disability & Departure in Business

Every business should give serious consideration to how the company would deal with the death, disability, or departure of one of the owners. Like a will, a buy/sell agreement (also known as a business continuity contract) spells out how assets and other business interests will be distributed should an owner quit, become disabled, or die. Without such an agreement, complications arising from ownership succession may capsize an otherwise thriving company. The remaining owners might be forced to share management and profits with unskilled or contentious outsiders. They may be embroiled in legal disputes over business assets and liabilities. A firm’s
Read More

Why Every Small Businesses Should Establish Control

Every week reporters publish stories about companies that have lost thousands, even millions of dollars because of fraud. They recount the dreadful details of business owners who learned – too late – that a lack of basic controls left their companies vulnerable to pilferage, embezzlement, and other types of misappropriation. How do these lessons apply to small businesses? After all, small firms generally can’t afford to hire internal auditors or set up separate divisions to break up incompatible duties. While it’s true that a small company can’t always protect itself in ways larger firms might, management can establish controls in
Read More

Archives

Categories