Startups, who build a business with an intent to sell it at some point as the exit strategy or those who choose to engage in a merger or acquisition (M&A) later, can benefit from the recommendations made by Ventureburn in the article, “How to Navigate Mergers and Acquisitions as a Small Business or Startup.”
An important recommendation is to keep accurate and up-to-date accounting and legal records. It is helpful to set up a data management file system using a virtual data room, to make it easy for others to review the company's files and information. To increase the interest in the company, try to build credibility and reputation before the M&A. Then, be careful to sell at the most appropriate time to get the most value.
To find more prospective buyers, communicate with personal and business networks about the intent to sell the company. Set the minimum acceptable levels of financial compensation, retention of existing employees, and other operational issues that are of concern. For a smooth transaction, use competent professional advisors, such as an M&A lawyer, an accounting firm, and a business sales agency. However, maintain control of the final decision.
Success with the M&A process is easier to achieve by preparing the company properly, well in advance of seeking prospective buyers. The McLinden Group offers help in getting the company’s accounting records in order before attempting a merger or an acquisition.
It is important for a small business owner to focus on three main financial sheets during start up. These financial sheets are:
To compete, today’s small businesses need to monitor the ever-changing environment they operate in, but doing so often requires a bit of planning and a true passion for embracing the latest business trends. In an article by Adam Toren, on Entrepreneur.com, it becomes clear that today’s small business can compete if they focus on a few, key opportunities.
Among the most important trends is the focus on Millennials, the generation that’s just reaching their 30's and is becoming one of the most important consumer groups for today’s businesses. Millennials adopt technology quickly, build brand trust slowly, and are communicators directly with their customers. Having a web presence and establishing e-commerce solutions are also key trends. EMV payment security is also growing in importance as it provides businesses with the ability to minimize consumer risk and financial loss.
Other changes to the current small business industry include business intelligence software that allows for better access to date and online lending, a new avenue for raising funds for your company.
How many of these trends are you employing? How many should you employ?
At a time when the Federal Reserve is looking to increase interest rates, a lot of agencies have taken it upon themselves to start moving out their cash stockpiles. As a result, small business are getting loans like never before, with SBA officials telling Congress that 2016 should be a record year for loans.
It's clear that there will not be another SBA shutdown in 2016 as there was in 2015. After demand came in so fast and thick that it overwhelmed the organization's infrastructure, Congress has raised the authorization level. Over 25 billion dollars will be allocated this year for small business loans. What's more, if the SBA starts to come close to this limit, they'll let Congress know so that more loans can be authorized.
Come June, small businesses will also have a new trick up their sleeves. Congress has resolved a problem regarding 504 loans, meaning that this money can now be used by a small business to refinance mortgages. This has been a historically strong tool for small business owners: in 2012, almost three thousand businesses refinanced their mortgage using 504 loans.
Tim Devaney and Tom Stein have given us an excellent article on the five most common small business accounting mistakes. Avoid them to grow your business faster.
1. Don't scrimp on hiring the right people. Saving a little on salaries can come back to haunt you in the end. The right people can save you more in the long run than their higher salaries cost you initially. And The McLinden Group provides accounting services so that you don't have to have a full-time CFO on staff.
2. Don’t overspend on the latest tech solutions. Don't be fooled. Fancy software designed for larger businesses will not necessarily pay for itself in your small business. You probably don't need all of their bells and whistles.
3. Don’t hire your brother-in-law to do your accounting. All too often, family members don't get along well enough to be in business together. All families have problems. Do you really want to bring those to your business?
4. Don't mix personal with business accounting. Set clear boundaries between your business finances and personal finances.
5. Don’t try to do it all yourself. Sure, you are good. But how thin can you spread yourself and remain efficient and thorough? What is more important, covering all the technical bases yourself or growing your business?
Contact The McLinden Group with your questions and accounting needs today.