You’ve got something great and now you’re profitable. Congratulations! But it’s not all sunshine and rainbows. What do you need to consider now that you’re profitable?
We all are familiar with Uncle Sam (everyone’s favorite uncle after all) and now that you’re profitable, he’s entitled to a piece of your pie. With combined federal and state tax rates of over 40%, Uncle Sam’s portion can be a pretty big piece. So how do you make sure he is only getting his piece, no more, no less?
Tax professionals can advise you on factors affecting your tax liability. These factors include, but are not limited to, entity selection (LLC, S-Corp, C-Corp, etc.), organization (ownership) structure, and nexus.
Reminder: Nexus, at its simplest, is the responsibility to file and pay taxes in a state that you may be selling goods or providing services.
In addition, tax professionals can strategize with you to minimize your tax liability. Those strategies include deferring income or accelerating deductions (within the tax regulations, they’re not in the business of tax avoidance) for tax reporting purposes.
To sum it all up, tax professionals strive to assist you in ensuring you are filing taxes in all the states you are required (and only those states) and paying the amount of taxes you need to pay (and only the amount you need to pay).
You got to this point, but where will you go next? We think it’s a safe bet that most of you want to do more and be more, but how do you get there?
Strategic planning is all about helping you assess who you want to be today, who you want to be tomorrow and how you will get there.
Business advisors can facilitate your strategic planning. The role of the business advisor is to help you develop a clear, concise and compelling strategic vision for your business and to hold you accountable in attaining that vision.
How? Business advisors will ask you the hard questions, draw on your knowledge (and the knowledge of others you involve in the process) and use available resources and connections to help you find (or reinvent) your strategic vision.
And it doesn’t stop there. The business advisor will be by your side during the implementation stage and help you track your progress in attaining your strategic vision. You can think of the business advisor as your personal guide through the strategic planning process.
You might be one of those serial entrepreneurs and, now that you are profitable, you want to move on to your next idea. But do you know what key drivers affect a business’s value (guess what, it’s not just profitability)? Have you done your due diligence (and no, that’s not just for buyers)?
Business advisors in this arena have expertise in financial analysis, valuation, sale preparation and other areas. They are available to help you through every step of the transaction process. They can help you determine the value of your business by providing market data research, valuation models, and one-one discussions about value drivers and pro forma financials (that’s accountant speak for projections). In addition as your advisor, they can help with document preparation and negotiation.
You don’t have to feel alone when selling your business (or looking at bringing in an investor for that matter). There are people out there to help you navigate the path and help you position yourself to achieve the maximum results.
When you become profitable, there are many considerations (the above are only a few of those considerations). However if there is one hidden message… it is important to find your advisory team (because it really takes a team). A team that helps you think holistically (there are a lot of moving parts in a business). A team that is proactive and engaged. A team that will have your back.