Sunday, July 27, 2008

Selling Your Small Business

If you are like many business owners out there, you dream of one day selling your business, cashing that one last big check, and riding off into the sunset.

However, gearing up a business to sell is something that should be established and worked at from day one.

Many small business owners approach their business in a way that allows them to avoid paying taxes (not reporting all of your income, inflating your expenses, etc.). Aside from the legal and ethical implications here, you are setting yourself up for great disappointment when it comes time to sell your business.

Here are just some of the things you risk by taking the “I’ll do what I can to avoid taxes now and worry about the sale of my business later” approach:

1) Many years of continued profitability increase the likelihood of a quick sale and ensures that someone will be willing to pay top dollar for your business. Underreporting income and overstating expenses makes your business look less profitable
2) A good buyer will have his accountant run due diligence and look into the history of your business. A history of problems with the IRS means that your business will be less desirable due to the fact that with it may come additional future IRS scrutiny
3) A buyer who sees your tax avoidance as a sign of other possible unethical business practices, they may be less willing to negotiate with you or they may walk away from the deal all together


Effective Tax Planning for the MicroBusiness is in stores now.
Click on this link to receive 20% OFF plus FREE Shipping!

No comments: