18 Aug Around the Web: A Week in Summary
The following information has been sourced by Business Brokerage Press for the benefit of the business brokerage community. The views of these articles do not necessarily represent the views of Business Brokerage Press. We hope you find this information helpful.
A recent article from U.S. Small Business Administration entitled “Buy an existing business or franchise” discusses the process of how to successfully buy a business or franchise. It is important to follow a thorough process in order to achieve a successful sale.
Consider the following three main ideas in an effort to buy a business or franchise:
- Know the difference between franchising and buying a business – Franchising gives you more guidance but less control, whereas buying an existing business gives you more control but less guidance.
- Consider three factors before franchising or buying a business – Quantify your investment, consider your talents and lifestyle, and review the full landscape.
- Get ready to buy your franchise or business – Consider hiring an attorney and an accountant. The tax rules surrounding franchises are often complex. A specialist in franchise law can assist you with evaluating the franchise package and tax considerations. An accountant can help you determine the full costs of purchasing and operating the business, and even help estimate potential profit.
Click here to read the full article.
A recent article from Sunbelt Business Brokers entitled “Your Guide to Using 401k to Start a Business” explores the option of utilizing retirement funds to buy a business. A popular 401k financing method is Rollovers for Business Startups (ROBS).
ROBS allows you to roll over your retirement savings into a new 401k plan established for the business. You can then access your retirement funds without paying taxes or penalties. You can also avoid traditional loan requirements.
Steps to implementing ROBS include:
- Create a C-Corporation
- Establish a New 401k Plan
- Roll Over Your Funds
- Buy Stock in Your Company
Click here to read the full article.
A recent article from Viking Mergers & Acquisitions entitled “Benefits of Selling to a Private Equity Group” discusses what a private equity group is and the three main benefits of selling your business to one.
Private equity is often lumped into a single category of leveraged buyouts, which has played a large role in the negative reputation. In reality, private equity encompasses a wide variety of transactions from minority buy-in to majority buyout to complete transfer of ownership.
The three main benefits of selling to private equity groups are:
- Industry Expertise – Evaluate the private equity group’s industry expertise and determine if that experience is relevant and will add value to your company’s business.
- Partnering Toward Optimization – Assess the private equity group’s operational expertise in areas relevant to your business, and evaluate whether the group’s experience, resources, and strategic relationships will support the growth strategy of your company.
- Long Term Growth & ROI – If add-on acquisitions are anticipated, evaluate the private equity group’s experience and success in acquiring these types of add-ons, including the successful subsequent integration (or not) of those acquisitions into the original business.
