Sell a Business? Hand to my kids? Create an ESOP? What?!!

?? Thinking of Changing Business Ownership? Start with a Business Valuation! ??

Get to understand your business value now. https://bit.ly/3wEVWyz

?? If you're considering transitioning your business—be it selling, transferring to family, or setting up an ESOP—knowing the actual value of your business is essential. Many business owners reduce reported earnings to minimize taxes. While beneficial for tax savings, this practice can obscure the true value of your business when it's time to transition.

?? You might have kept your profit reports low for tax advantages. This is a common tactic and is perfectly legal. However, while it helps during operational phases, it complicates understanding the true value of your business during a transition.

?? Normalization Process - A Key Step with Your Business Advisor: When partnering with a Legacy Business Transition Advisor or broker, a critical early step is 'normalization'. This process adjusts your financials to reflect the actual profitability of your business, accounting for personal salaries, non-working family perks, and depreciation. This paints a clearer picture of your business's health, enhancing its appeal to potential buyers.

?? Beware of Last-Minute Profit Boosts: It's not unusual for businesses, like a plumbing company with gross revenues of $5,000,000 that is reporting $250,000 in profit annually, to suddenly show $500,000 just before sale. While initially attractive, such sudden spikes can make buyers and lenders cautious. Consistent profitability is key to gaining investor confidence.

?? SBA and Investor Scrutiny: For sales under $5 million, getting your business SBA pre-qualified, as per www.SBA.gov, is crucial. Lenders want to see a consistent track record of profitability.

?? If your profits have fluctuated, you might delay selling your business until you can demonstrate stable, higher profits. Altering past tax returns to reflect higher earnings is another route, though this can complicate matters and increase taxes—always consult with professionals like Unbehagen Advisors (https://unbehagenadvisors.com/financial-statements/) before making such decisions.

?? Earn-Outs: Consider arrangements where the buyer pays a base price now and additional compensation based on future performance. This aligns incentives but requires clear legal terms.

?? Why Valuations Matter: Understanding your business's value is critical for strategic planning, securing investments, or prepping for unforeseen events. It provides insights into operational strengths and areas needing improvement, aiding in efficient resource allocation.

?? Local Expertise in Florida: For Florida business owners, local valuations are particularly advantageous, ensuring your valuation reflects current market conditions.

?? If you're in Tampa or elsewhere in Florida, consider reaching out to Tampa business brokers / Business Transition Advisors at Legacy Venture Group for a comprehensive valuation. Knowing your options helps in making informed, strategic decisions for your business’s future.

?? We're here to assist! For a business valuation in Florida or anywhere in the U.S., Legacy Venture Group is your go-to. Specializing in business sales, valuations, and exits. Contact us for a FREE CONSULTATION at [email protected] or call 833-289-2491 (833-BUY-BIZ1).

Get your Free Copy of The End Game and start thinking about your plan.This month’s FREE E-Book: https://bit.ly/3K0oTYN

#BusinessValuation #BusinessTransition #FloridaBusiness #BusinessSale #StrategicPlanning #BusinessBroker