Could this be the year to sell or gift your business?

We turn the calendar and we face the unknown. For some, it is a time of excitement and anticipation while for others, a source of uncertainty and foreboding.

What will the New Year bring for you and your business? More importantly, are you taking charge to make 2023 your year?

If selling your business is top of mind for 2023, there are three points to consider:

  1. Taxes
  2. Your business COVID-19 story
  3. Demand

Taxes

As the saying goes, nothing is certain, but death and taxes. As we look ahead, it is certain that tax rates will increase as tax laws are set to expire. This includes the expiration of tax laws that promoted business deductions (e.g., Section 199A) for select industries, directly increasing tax liability of businesses in the coming years. Additionally, the Massachusetts Millionaires Tax went into effect this year.

If you are thinking about selling this year or prior to the expiration of such tax incentives at the end of 2025, now is the time to review and revise plans for your business including tax and estate planning. Gifting shares is an effective way to transfer ownership of your business to the next generation or to trusted employees, while effectively managing tax consequences.

Your Business COVID-19 Story

We now have enough data to tell your business COVID-19 story. Just like back in 2001, 2003 and 2007, there is sufficient evidence to determine which of the following five categories describes your business COVID-19 story:

  1. Wounded and will die
  2. Wounded and will recover
  3. Not affected
  4. Temporarily did better and then levelled off. (e.g., restaurants that pivoted to focus on take-out)
  5. Did better and then turned success into a strategic advantage, gaining market share.

What category represents how your business did? As business valuation professionals, we now have enough data from the start of the pandemic through today to tell your COVID-19 story. Sufficient data of nearly three full years supports presenting the impact of such unusual times while reporting how your business performed as the months continued. The data will tell your COVID-19 story and the business valuation will present the objective details of your businesses performance over time.

As we know, the pandemic was the last straw for many baby boomers, who sold and retired at a record setting pace. Understandably, the pandemic was a reality check; a vivid reminder of the fragility of life and the importance of aligning values and priorities with one’s work life. This priority remains important which leads to the third consideration: demand.

Demand

The most common concern of a business owner is often, who would be interested in buying my business? If you are considering selling your business, you can assume there is interest in your business. Demand is there and it falls into two primary categories:

  1. Buying a job: many buyers are looking to buy their next job. The pandemic raised the focus of achieving that elusive ‘balance’ and where businesses are forcing a return to the office or ramping up travel or other demands, individuals are balking and seeking to buy a lifestyle that suits their priorities.
  2. Private equity firms: there is a lot of money held by private equity firms seeking to acquire businesses.

Conclusion

For most business owners, the process to sell does not happen within a 12-month period. It is a longer process to address and improve the balance sheet, develop a succession plan, and focus on driving value. However, that does not mean that this cannot be your year. Three key considerations, briefly described above, all point to the favorability of making 2023 the year to act. Taxes will increase so you have a window of opportunity. Your COVID-19 story is known, and there is likely demand.

Should this year be your year, contact us if we can assist you in achieving your goals by developing a business valuation.

When Values Matter.

Honored to Receive Prestigious NACVA Award at National Conference

At the National Association of Certified Valuators and Analysts (NACVA) Conference in June, Lou Pereira received the Massachusetts State Chapter President Leadership Award. “Being recognized in this way is a tremendous honor for me,” Lou observed, “adding that the success of the Massachusetts State Chapter is due to the efforts of the entire board who work to bring the best business valuation training programs here.”

The conference brought together on Zoom many of the best known thought leaders in the business valuation field. It provided the opportunity to discuss new and old issues with other top business appraisers.

NACVA is a global, professional association that delivers training from the nation’s leading experts in consulting fields such as business valuation, financial litigation forensics, expert witnessing, forensic accounting, risk fraud management, mergers and acquisitions, business and intellectual property damages, fair value, healthcare consulting, and exit strategies. Along with its training and certification programs, NACVA offers a range of support services, reference materials, software, and customized databases to enhance the professional capabilities and capacities of its members.

NACVA’s Certified Valuation Analyst (CVA) is the only business valuation credential accredited by the National Commission for Certifying Agencies (NCCA) and the American National Standards Institute (ANSI).

Read more about Lou Pereira’s qualifications…

Independence Matters Every Day in Business Valuations

As July 4th approaches, Americans seem poised to celebrate Independence Day with more spirit than ever. Yet, here at Merrimack Business Appraisers, independence holds meaning for us all year long.

In order to promote and preserve the public trust, our appraisal practice observes the highest standards of professional ethics, including an unwavering commitment to independence. This means that we are free from outside control, obligation, or bias due to a personal interest.

The Appraisal Foundation, a private, non-profit educational organization and the nation’s foremost authority on the valuation profession, ensures that an appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.

  • The Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP) has established ethical and performance standards for the appraisal profession in the US. Adopted by Congress in 1989, USPAP is updated every two years so that appraisers have the information they need to deliver unbiased and thoughtful opinions of value. Read more…
  • The selection of a business appraiser must be undertaken with great care, as issues affecting valuation can be complex and confusing. USPAP provides important guidance in the form of Advisory Opinions and Frequently Asked Questions. Read more…
  • Louis Pereira has completed the most intensive training in the country and earned the highest designations available in the field of business valuations. There are fewer than 200 Certified Business Appraisers in the country, and Lou Pereira is one of them. In New England, he is one of only a dozen having earned the rigorous designation of Certified Business Appraiser. Read more…

At Merrimack Business Appraisers, we are here to help when you need a business valuation. And you can always count on our independence.

When Values Matter – Objectivity is a Must

Did you know that an appraiser must promote and preserve the public trust inherent in appraisal practice by observing the highest standards of professional ethics?

We at Merrimack Business Appraisers pride ourselves on being unfailingly objective.

The Appraisal Foundation, a private, non-profit educational organization, ensures that an appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests.

The Appraisal Foundation is the nation’s foremost authority on the valuation profession. The organization sets the Congressionally-authorized standards and qualifications…and provides voluntary guidance on recognized valuation methods and techniques for all valuation professionals.

(Source: Uniform Standards of Professional Appraisal Practice 2020-2021 Edition, The Appraisal Foundation, page E.)

The Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP) has established ethical and performance standards for the appraisal profession in the US. Adopted by Congress in 1989, USPAP is updated every two years so that appraisers have the information they need to deliver unbiased and thoughtful opinions of value. Read more…

The organization also provides important guidance in the form of Advisory Opinions and Frequently Asked Questions. The issues affecting valuation can be complex leaving the marketplace often confused which is why the selection of a business appraiser must be undertaken carefully. Read more…

Louis Pereira has completed the most intensive training in the country and earned the highest designations available in the field of business valuations. There are fewer than 200 Certified Business Appraisers in the country, and Lou Pereira is one of them. In New England, he is one of only a dozen having earned the rigorous designation of Certified Business Appraiser. Read more…

At Merrimack Business Appraisers, we are here to help when you need a business valuation. And you can always count on us for objectivity.