FEATURE
PAPER
Value
Enhancement Strategies for Family/Small Business Owners
The
following paper was presented at the 2007 Association of
Small Business and Entrepreneurship (ASBE)
. It was written
by Charles R. B. Stowe of Sam Houston State University.
Abstract
The problem
for most family owned businesses is how to realize the maximum
potential from the business at the time of sale and prior
to that time how to develop strategies to improve the efficiency
of the operation and how to improve total revenue growth
without stretching the capacity of the enterprise or going
too far out of the owner’s comfort zone. This article
provides specific insight into what steps a small firm may
take to enhance its valuation for the purposes of realizing
a capital gain or for the purposes of realizing more profitability
to fund retirement of the owners during transition to the
next generation. This paper offers a model for implementing
strategies to enhance the valuation of a small business for
the purpose of realizing either higher profitability or a
larger capital gain upon the sale or transfer of the enterprise.
Introduction
As small business owners get closer to retirement, they face
a haunting question. What can they do to enhance the profitability
of their business while still keeping the business within the
size and scope of their personal comfort zone or what can they
do to enhance the value of the business from the standpoint
of a buyer? This article addresses those issues along with
advancing a new approach to valuation of a small business.
Read
the Entire Paper...
TIP
OF THE WEEK
Being
Proactive
In the maze of laws, permits, taxes, and fees, the important
thing for a business owner to remember is to be proactive.
The following lists of resources that can help you satisfy
all requirements that are specific to your type of business.
Seek out these resources and comply with all regulations. Doing
so is worth the initial hassle.
• Chambers of commerce. Just about every town has one, or business
owners may be involved in a regional chamber. These groups
sponsor workshops, networking sessions, luncheons, and plenty
of opportunities to ask questions about the way things work
in the business community. Many lobby their state legislature
on behalf of business interests.
•
Trade associations. These groups are usually
formed around a particular facet of the industry (shoe retailers,
jewelry
retailers, etc.). Some industries have very strong associations,
while others are weak—for the most part, they are
as strong as the members who get involved and stay active.
Many
have paid staff members and offer training and educational
programs. They may not always know the answer, but they
usually know someone who does. Most often, they also
publish newsletters
and/or a magazine that can be great sources of trend
and business information.
• State tax commission. If you want to be sure about state
and local taxes, start here. Better yet, ask your accountant
to handle this part of the business.
•
City or county clerk’s office. Sometimes
a town clerk knows everything that’s happening regarding permits and
local regulations; in other communities, the clerks at the
planning and zoning commission are the sources of this information.
Either way, they’re good people to know.
• Insurance agent. A
good insurance agent is a valuable person to have on your
team—not just in a case of disaster,
but a good agent is aware of those quirky laws
that require surety bonds or special insurance. Most agents
network extensively,
so they can be valuable contacts for suppliers,
politicians, civic groups, and more. A well-established insurance
agent
is usually two phone calls away from anything you
might need to know.
•
Payroll company. Consider using a payroll
service, because it will pay your taxes for you electronically
(using your money,
not its own). The fees payroll services charge
are much lower than what a bookkeeper would charge. The two
largest payroll
service companies are Paychex (www.paychex.com)
and ADP (www.adp.com). They can even handle a retirement
program when you’re
ready.
Don’t wait until the last minute to get your paperwork
done. Work with your accountant or tax professional. And when
it is done—from the business description to the financial
records—vow to update it all regularly.
Chris
Thomas and Rick Segel. Retailing in the 21st Century.
Copyright: 2006 by John Wiley & Sons, Inc., Hoboken,
New Jersey. Pg. 92 and 93
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National
Urban Inititiatives Competition
Clark University
is hosting the National Urban Inititiatives Competition.
They are seeking proposals that have practicality, creativity,
and are well rooted in theory. Proposals should trnslate
from theor to model or vice versa. Furthermore, it should
be feasible to enact into legislation.
An award of $20,000 will be given to each winner of the three categories:
1. Affordable and
sustainable housing.
2. Neighborhood based
economic development.
3. Financial services
to low income communities.
All applicants must
be from a institution of higher education and must team with
one or more of a local government entity and/or non-profit
organization.
Submission of Step
1 proposals are due January 25, 2008.
For more information
please click
here.
SBI
Journal - Request for Papers
The Small Business
Institue is now requesting papers for the Small Business
Institute Journal. If you are interested in submitting a
paper, please let us know. The first issue is to be printed
April 2008. For more information please click
here or email us at sbij@uca.edu.
SBANC is Updating
Their Entrepreneurship and Small Business Network
The Small Business Advancement
National Center is currently updating their Entrepreneurship
and Small Business Network. If you currently teach or know
a professor in your
school or state that teaches an Entrepreneurship or Small
Business course, please provide us with any available information
at sbanc@uca.edu.
We appreciate any help. Thank you.
.
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