The Beal Business Advisor

May 2014

Contact Number: 204-478-7266

In This Issue

Buying a Business - Taxes
Selling a Business - When is the Right Time to Sell?
Question of the Month - Steps for a Successful Product Launch
Current Businesses for Sale

Taxes

Last month we discussed patents, this month we want to discuss taxes.

The government will want a piece of every transaction you do - that's just the nature of the government and of taxes! The trick is to minimize overall taxes by structuring the transaction correctly, and by making sure you know what the tax situation is of the current company.

Specific questions you need to ask during due diligence are:

- Are CPP, EI, GST, and Income Tax payments current?

- What were the dates and the outcome of the last audit?

In terms of structuring, there are two basic ways to structure the purchase of an existing (incorporated) business: as an asset purchase or a share purchase.

If an asset purchase you (or a new corporation you set up) are buying all of the assets of the old corporation, including the "goodwill" aspects (name, client lists, etc.). In this situation, you will pay PST on the tangible assets you are buying (just like buying a used car) but not GST (if you sign an election with the vendor).

If a share purchase you can save the above tax BUT - and it is a big BUT - you will inherit all past tax liabilities (known and unknown) of the corporation. Consult with your advisors for details.

Next month we will discuss legal issues.

In the meantime, if you would like more information on buying a business, contact us at 204-478-7266x110.

When is the Right Time to Sell?

Last month we discussed what do you want to do next. This month we will focus on when is the right time to sell.

I have many clients ask me "when" they should sell. I am not a big fan of timing the stock market, and I am even less of a fan of timing the sale of your business. The process is long and complicated, and should be based more on your personal considerations than anything else. In general, it can take anywhere from six to eighteen months to sell a private business, so the fact that you had a "good quarter" or "one good year" may not help much. Don't get me wrong - it is important to keep the numbers strong, but it may not make a huge difference on the final sale price.

So what should you consider when determining your exit plan? Look to your personal goals:

Are you ready to retire?
Have you just "had enough?"
Is it time to move on?

As mentioned, selling a business is a complicated, time consuming process. It is not one you want to start without knowing what it will cost in terms of time and preparation.

If you would like more information on selling or valuing a business, contact us at 204-478-7266 x110.

Current Businesses for Sale

Winnipeg Automotive Service Centre

Franchised Foods Retailer

Convenience Store (Northern Manitoba)

Winnipeg Catering Business

Winnipeg Pharmacy (Conditionally Sold)

Franchise - Tanning Studio

Small Town Dollar Store

Winnipeg Meat Shop - Grocery Store

Bridal Shop

Metal Fabrication Business

Specialty Building Product Retailer

Small Town Grocery Store/Meat Shop

Automotive Repair and Power Product Dealership

Construction and Renovation Company

Trucking Company - NW Ontario

Plum Creek Gifts

Winnipeg Convenience Store

High Volume Retail Chain

Thompson Hotel and Restaurant

Print and Online Publication - Business Opportunity

Employment Service - Franchise Opportunity

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To review any of these business profiles, please click here .

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We do not advertise all of our listings to the public.

If you have a specific type of business in mind,

please call 204-478-7266 x110 to inquire!

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Quick Links

Beal Consultants Website

Quote of the Month

"Take up one idea. Make that one idea your life - think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success."

Swami Vivekananda

I Am Considering Offering my Current Product to a New Customer Group. What Steps Should I Take to be Successful in my Product Launch?

Your first steps will be to perform some market research in addition to a feasibility study. Together, these will help indicate whether or not your product launch will have a positive return on investment. One of the top reasons for business failure is failing to do sufficient market research!

Performing market research will entail gathering primary and/or secondary data. Primary data is information you must collect, while secondary data is information you can gather from other sources. Primary data may include surveys, interviews, observations or test marketing. The goal is to uncover whether or not your target market will spend money on your product.

In order to start a feasibility study, you will need to prepare a revenue/sales forecast. To determine the forecasted sales, market potential must be calculated. The steps to calculating market potential are as follows:

Calculate the total population in the respective market area.
Gather appropriate spending data for the population with respect to your product. You may need to use your primary or secondary data here.
Make any necessary adjustments to the total population spending as required.

Once you have the projected revenues, you can incorporate the anticipated financial and capital outlay to determine your potential return on investment.

For more information, contact us at 204-478-7266x110.

About Us...

Beal Business Growth Consultants, Inc. helps owners of small and medium-sized businesses to buy, sell, value, and grow their businesses. We also work with individuals who are looking to buy or start a business or franchise.

Call us at (204) 478-7266 x110 for a free, initial 30-minute consultation to explore how we can help you buy, sell, value or improve your business.

Legal

Copyright 2014 by Steven Beal, Beal Business Growth Consultants, Inc. The information herein is not complete and is intended only to provide guidelines to supplement counsel the reader receives from a qualified professional. It is distributed with the understanding that the author is not rendering legal, accounting or tax advice or opinions on specific facts or matters, and accordingly, assumes no liability in connection with its use.

Published by Beal Business Growth Consultants, Inc.