From the monthly archives: August 2010

We are pleased to present below all posts archived in 'August 2010'. If you still can't find what you are looking for, try using the search box.

Reliable Financial Data Is A Top Driver Of Business Value

The lack of financial integrity is one of the most common hurdles encountered during the process of selling a small business. What is being bought or sold is primarily a future stream of income. Not the assets or property of the business, but the income these assets will generate in the future.

Since future income is impossible to definitively compute and hard to estimate, the company's financial history, at least, provides concrete facts and insight to future performance. So, reliable financial records are not only a critical element of business management but also support the business' historic profitability, operational efficiency, and its solvency.

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Tip #25: Excessive Personal Expenses Can Jeopardize Business Value

Burying excessive personal expenses in the business financials can lower business value!

The most popular method of valuing a business uses a multiple of earnings over a period of years. Business owners should be aware of that while attempting to reduce the bottom line with personal expenses to minimize taxes. Though there are a number of deductions that may be added back to determine true cash flow, not all add-backs are considered legitimate by buyers or lenders. Being too aggressive in minimizing taxes today may cost a business owner big dollars at closing.

Click here for "Addbacks Frequently Used to Maximize Business Value."

Buying a Business and Purging Liability of Unpaid Taxes

If you plan to buy an existing business, be sure to get a Certificate of No Tax Due. Failing to do so makes you, the purchaser, liable for any past due state taxes or fees, plus any interest and penalties that are owed by the business.

CBB will assist a buyer in obtaining this certificate prior to closing the sale of a business.

Read complete information from Texas Comptroller of Public Accounts