Business

MAXIMIZING THE VALUE OF YOUR BUSINESS

Each year, all kinds of owner still has valuable employees in ble, because potential buyers will most tips and there are more people who businesses, large and small, place. “For companies that have key likely find them,” Wolfe adds. can assist you with valuable advice: are sold here in the Phoenix employees, phantom stocks are help- • As mentioned, consult with the Metro Area. Unfortunately, many ful to retain these individuals for the 5. CONSIDER ALL DEAL bookkeeper, accountant or CPA about owners don’t take all the steps they new owner,” says Brian Bond, Strate- STRUCTURES the accounting and taxes. should to maximize the value of their gic Business Brokers Group. “Business owners need to be open to • Discuss the sale with an attorney. A businesses. Here are some things a different forms of deal structures,” business attorney will provide advice business owner can do to ensure that A phantom stock plan is an em- says Bond. “A straight cash deal at on the necessary legal contracts and the business generates the highest ployee benefit plan that gives selected closing may not be the best value for procedures. An estate planning attorpossible value at the time of the sale. employees many of the benefits of the business.” ney might be useful if family inheristock ownership without actually tance is involved. 1. GET ALL THE DUCKS IN A ROW giving them company stock. This For instance, business owners might • At the very least, examine the online “A business owner needs to make is sometimes referred to as shadow consider a buyout where a certain strategy and social media with a marsure that the books and records are in stock. The phantom stock follows the amount of cash is paid up front and keting professional. order,” says Jeffrey Corallo, CPA. pricing movements of the company’s then monthly or yearly payments are • In addition, business owners might actual stock and pays out profits to made for a set period of time. want to work with a business broker. “Step one is having proper accounting employees. It is a great way to ensure What is a business broker? Think of for the business. If the business owner employee loyalty, interest and active This might be particularly appropriate a broker much like you would a real doesn’t have the time, hiring a book- participation in the change of owner- when a relative is buying the family estate agent. It is the broker’s job to keeper or accountant is a good idea — ship. business, or perhaps when trusted em- advertise the sale, find potential buyalthough they don’t need to be a full- ployees or management gets together ers and help with the closing, as well time employee of the business. There 3. SELL ON AN UPSWING to buy out the current owner. as advising clients on how to maxiare plenty of bookkeeping services It may seem like common sense, but it mize the value of the business. and contractors that can come into a is a good idea to sell when your sales 6. GET GUIDANCE • After the sale, a financial advisor business just for the time needed. are trending up, not flat and, of course, Obviously, maximizing the value of might be the right person to help invest not when they are declining. a business is more than just these five and protect that hard-earned money. “Next, make sure the business taxes are paid and current,” says Corallo. 4. CLEAN UP YOUR MARKETING “Again, if the business owner doesn’t “Outdated websites, social media and have the time, hiring a payroll service, marketing materials tend to send a accountant or CPA is a great way to message that a business has let things ensure compliance. slide. It makes potential buyers won“Last but not least, a CPA can be a says Jen Wolfe, Wolfe Creative. “Take great sounding board to help you plan the time (and spend the money) to upthe sale, review the work your accoun- date the website and printed marketing tant or bookkeeper has done, and to materials. help ensure your taxes are in complider what else isn’t quite up to snuff,” ance,” Corallo adds. “Then business owners (or their social media experts) should go through all 2. CONSIDER PHANTOM STOCKS social media with a fine-tooth comb. It One way to increase the value of a is a good idea to get rid of any online business is to ensure that the new negative comments whenever possi-