Many people are aware of rock star Bono's commitment to humanitarian global causes, but some people don't realize that Bono believes that capitalism is a better answer to the world's problems than aid. Check out the following video where Bono says "Commerce is real - aid is just a stop gap. Entrepreneurial capitalism takes more people out of poverty than aid, of course we know that."
Ever wonder how candy canes and chocolate Santas are made? Watch this video factory tour of Haven's Candies, a company that's been producing confections in Maine since 1915. Whether a company manufactures chocolate, grows and sells Christmas trees, or designs toys, and whether it is located in Portland, Oregon or Portland, Maine - every business owner will eventually need to transition out of their business. Codiligent business brokers is a resource for business owners who want to better understand their exit options - contact us to discuss your particular situation.
As a business broker I've found that small and medium size businesses are much easier to sell if owners / managers treat employees well and, as a result, have good retention of positive and motivated staff members.
Here's Starbucks founder Howard Schultz on the importance of treating employees well . . .
Often when we think about the term "entrepreneurship" we think of the glamorous stories of people who have rapidly grown small start-ups into billion dollar companies: the Facebooks, Nikes, and Spanx of the world. Because of these high-visibility success stories many people assume that entrepreneurship is on the rise in our country. Unfortunately, they are wrong. Entrepreneurship in the US has been in steady decline for the past 4-5 decades.
Yet, as a society we all benefit from the life-changing innovations and products that entrepreneurs create, not to mention the jobs and tax revenue. So what can we do to encourage entrepreneurship? In the following video Cameron Herold suggests how and why we should raise kids to be entrepreneurs.
There are a variety of pros and cons for which type of legal organization a business founder may want to choose (S Corp, C Corp, LLC, Sole Proprietorship, Partnership) - so I'm not suggesting that there aren't some excellent reasons to choose to organize as a C corporation rather than as a S corporation (I'll cover pros and cons in another blog post). However, one of the negative consequences of choosing a C corporation is when you are ready to sell the business if the sale is structured as an asset sale you may experience double taxation of proceeds. The C corporation will sell the assets and it may be taxed on that sale, but then the proceeds will be trapped in the corporation unless they are distributed as dividends to the shareholders of the corporation. Once they are distributed as dividends the shareholder will be taxed on those dividends at the individual level, as well.
Many people are aware that they may be able to make an S corporation election, whereby they can change the organizational structure from a C corporation to an S corporation. As an S corporation they will be a pass-through entity, where profits of the corporation will not be taxed inside the corporation and instead will only be taxed on the shareholder's tax return. So, some owners of businesses that are organized as a C corporation rationalize that when they are preparing to sell they can simply make an S corporation election before they sell and avoid the risk of double taxation. Unfortunately, that may not be true unless the S corporation election is made well in advance of a business sale. Generally, if a C corporation is changed to an S corporation a business owner will have to wait for ten years before selling in order to avoid the double taxation of the proceeds of an asset sale (see 26 U.S. Code § 1374 - Tax imposed on certain built-in gains). Of course, the tax code is ridiculously complex and at Codiligent we are not CPAs, so we'd strongly encourage you to seek expert advice from your CPA and/or tax attorney to verify this and discuss your particular situation.
In the interest of full disclosure, I am a stockholder in Google. Having said that, I appreciate how much Google has done to democratize business, making it easier for start-ups and small businesses to compete with large multinationals through its ability to connect people to resources and customers via search but also by providing a way for small businesses to cost effectively reach highly targeted buyers whether those buyers are in a small geographic area or on the other side of the globe. I recognize that some people worry that Google is too ubiquitous and controls too much information - I don't share those concerns - I believe Google has been an incredible force for good in the world.
As a business broker, I often do research to locate and screen logical strategic buyers for businesses I am selling. It's hard to believe that not that many years ago, a business broker or investment banker would have likely put in 10-20 times as much time and effort to assemble a similar quality list of logical strategic buyers. While there are a variety of research tools I use, Google plays a large part in this research.
Beyond the obvious ways that Google helps entrepreneurs, what you may not realize is that Google takes a hands-on approach to helping foster global entrepreneurship. Check out the video below to see some of the ways that Google is encouraging and enabling entrepreneurship.
Bill Gates, one of the most financially successful business people in the history of the world, is also one of the most philanthropic. In fact, the Bill & Melinda Gates Foundation is the largest transparently operated charitable foundation in the world and the couple plan on eventually donating 95% of their wealth to charity. So how does someone who is one of the most financially successful people in the world, but also one of the most generous, view capitalism? See the video below.
Are you burnt out on running your business? Does going to work feel like drudgery? Are you bored? Feel like you've lost meaning in life?
If so, perhaps you've wondered if it may be time to sell your business, but then have second thoughts because you are not sure how you'd ever replace such a high level of income? And, after all, life isn't that bad - anyone else in your shoes would be happy, right? Right?? Right?!?
Maybe not. If you are feeling this way, you are not alone. Perhaps it's time to make a dramatic change - you only get one chance at life. The video below is about a former neurologist who felt trapped and unfulfilled, and then made a radical change to find meaning and happiness through an unconventional lifestyle as "Slomo". If you are ready to make a dramatic change, please contact Codiligent to discuss your dreams and how we can help you exit your business. We'd love to assist you with discovering fulfillment through a transition into a new stage of life.
As the British playwright Tom Stoppard said "Every exit is an entry somewhere else."
It's amazing to think about the vast array of life-enhancing products and services that have been introduced and continue to be developed over the past 150 years as a result of free enterprise. I personally see some of this with the business seller clients I serve. They have all taken entrepreneurial risk to provide a product or service that they believe makes life better for others, and that by delivering value first, customers will voluntarily exchange some of their hard earned money for the product or service. Unfortunately, free enterprise and entrepreneurial capitalism seem to be under assault in recent years. The following video makes the moral case for the free enterprise system and focuses on three main points about why it should be embraced:
Have you seen CNBC's show "The Profit"? If you are a business owner trying to build an enterprise that you'll be able to successfully sell to someone else I'd recommend it for being entertaining and insightful at the same time. The premise of the show? Turnaround artist Marcus Lemonis goes to struggling small businesses and makes a decision about whether to invest time, talent, and money into helping turn the businesses around. What I like about the show is that Marcus identifies the most critical issues impacting the performance of the business and rapidly addresses them. Even if your business is successful, when a buyer is looking at it, they will view it in a similar way that Lemonis does: what are the problems, what are the opportunities, what type of resources will be required to fix the problems / exploit the opportunities, and will there be an appropriate reward for the risk being taken.
What Lemonis does not point out is the impact that such a change has on the business' value. For a business of this type, an extra $300,000 of profits likely translates into a $500,000 - $900,000 increase in business value. What do you think - is spending an afternoon changing prices on menus and in the business' Point of Sale system worth it to add $300,000 in greater profits with no additional work, while also significantly increasing the business' value?
Check out The Profit on CNBC - many of the problems that Marcus Lemonis addresses on the show are common. Perhaps seeing how other businesses have been fixed, will inspire you to make changes to your business. If your business has been in operation for at least two full years and has more than $1 million in annual sales, and you'd like help in identifying issues that you can work on that may be negatively impacting marketability and value, Codiligent offers a free Marketability Assessment. Contact us at 888-324-5888 to learn more.
Buy and Sell Well
Codiligent Business Brokers' blog on entrepreneurship, capitalism, and successfully buying and selling businesses.
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