7 Ways to Minimize Taxes When Selling your Business

Accounting Practice for Sale Orange County Business Brokers
Category: Mergers & Acquisitions Selling Your Business 
Bill Grunau

Most business owners are focused on the value or selling price of their business, but something often overlooked early on is the tax consequences of selling their business and what the net proceeds will be.

It does little good to get a great selling price and then lose 50% of it to taxes, but with advance planning and a good tax advisor, you can minimize your taxes and defer as much as 90% of the taxes. Your particular taxes and savings will depend on a number of factors, so it is impossible to provide a one-size-fits-all answer as to what you will save, each business and transaction is unique. But a tax strategy will dramatically reduce your taxes and there are several tax strategies available that provide a means to defer and reduce the taxes on the sale of your business.
Here’s an overview of tax strategies used for both business sales and real estate sold with a business.

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  1. Sales Trust
    In a sales trust you will simultaneously sell your business to a trust (not related to you) through an installment sale in exchange for a secured installment note. The trust then sells that business to the end buyer. The proceeds are then put into the trust where they will be invested. You can choose how much and when to receive payments from the trust. You pay tax on the payments as received.
  2. Monetized Installment Sale
    A monetized installment sale functions very similarly to a Sales Trust. You will sell your business to another entity in exchange for a 30-year installment promissory note. The other entity will simultaneously sell your business to the end buyer. The proceeds go to the intermediary entity. Since you have not received any proceeds, you do not pay tax on the sale at this time, it is deferred. You receive your proceeds through the form of a loan from another institution equal to about 93% of the sales proceeds. You pay no capital gains tax until 30 years has passed.
  3. Charitable LLC
    A charitable LLC allows you to donate an asset to a charitable LLC, The Charitable LLC then gives a portion of its shares to charity. You get a charitable contribution deduction for the value of your asset that you contributed. Future income is split between the charity and your portion of ownership of the LLC. You remain in full control of the LLC and its assets. This will also yield ongoing income reduction and tax savings in future years.
  4. Personal Goodwill
    When you sell your business you may be able to allocate a portion of the sale to your personal goodwill. This can greatly reduce the overall tax liability associated with the sale because that portion will be treated as long-term capital gains instead of ordinary income.
  5. Opportunity Zone
    An opportunity zone is an “economically distressed community”. The opportunity zone credit allows you to invest proceeds from the sale of an asset (business included) into an opportunity zone to defer and potentially eliminate a large amount of taxes.
  6. Conservation Easement
    A conservation easement allows someone to give up the rights to undeveloped land. In turn, the IRS will give a charitable contribution credit of the amount that the land may have been worth had it been fully developed.
  7. Stock vs Asset Sale
    Most business sales are done in the form of an asset sale, which is beneficial to the to the buyer in a number of ways, but unfortunately puts the seller in the highest tax bracket with some of the proceeds taxed at ordinary income rates. If the transaction is structured as a Stock Sale then most of the proceeds are taxed at the capital gains tax rate, thus dramatically reducing the seller’s tax liability.
    Due to successor liability risks and the loss of depreciation for the buyer, it is often difficult to persuade a buyer to structure the transaction as a stock sale instead of an asset sale. However, there are several instances where a stock sale is a benefit to the buyer and even a requirement. These instances include the sale of a corporation with a contractor’s license and corporations with government or long-term contracts that need to be preserved. In some instances, a stock sale can be negotiated with the buyer when the offer is being constructed.

These are some of the more common strategies available when it comes to selling your business or large asset. There are many more to explore that are unique to certain situations. Most of these strategies include immediate tax savings as well as deferred savings in the future. The time value of money and inflation is another factor to consider when determining your exit strategy.
As with all advanced tax strategies, there is always some level of risk. The IRS is constantly changing rules and regulations every year. There is no guarantee that any strategy used will not come under IRS scrutiny or be written out of law in the future. Most of the strategies require in-depth legal and accounting knowledge of the IRS code. Be sure you are working with an advisor who is familiar with these strategies and up to date on all of the IRS changes.

Contact us for a free consultation with our CPA tax advisor that specializes in tax planning for business owners selling their businesses and/or real estate.

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5 SBA Loan Myths & Steps to Getting an SBA loan for Business Buyers-Sellers

How To Get An Sba Loan To Finance The Sale Of Your Business
Category: Buying a Business SBA Financing Selling Your Business 

Getting an SBA Loan to buy or finance the sale of a business is a great way for buyers to leverage their cash to obtain a lower down payment and buy a bigger, more profitable business. SBA financing also offers benefits to business sellers because it gives them cash at closing rather than having to finance the transaction themselves with a large Seller Note. SBA financing is a win-win for business buyers and sellers.

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In addition to the obvious benefits of a low down payment for the buyer and cash at closing for the seller, SBA financing other significant benefits. SBA financing offers 10 year financing at a maximum rate of Prime + 2.75% as compared to Seller Notes that are typically 5 years at 8%. The reduces the buyer’s debt service and increases their net after debt service dramatically. SBA lenders will also often finance the purchase of the seller’s receivables (A/R) which provides additional working capital for the buyer and again cashes the seller out at closing since he doesn’t have to wait to collect the outstanding A/R.

5 SBA Financing Myths, busted

  1. It takes months to get an SBA loan!
    It’s a common myth that it takes several months to get an SBA loan, some think it can take 6 months. At Pacific Business Sales we SBA financing typically takes 45 days to 60 days and we run the SBA financing in parallel with Due Diligence and Escrow resulting in the bank being ready when escrow is ready to close. We work exclusively with a select group of SBA PLP (Preferred Lending Program) banks that have excellent underwriting teams and quick closing processes. We do not work with loan brokers that will “shop” the loan around and do not work with non-PLP lenders.
  2. SBA Loans are nearly impossible to get!
    SBA loans do have a lot of paperwork and yes, both the buyer and business must qualify, but if the deal makes sense, SBA financing is a viable option. At Pacific Business Sales SBA financing is our preferred transaction structure and in fact over 90% of our transactions use SBA financing.
  3. SBA Loans require a ton of paperwork!
    OK, this one is not a myth, SBA loans do require paperwork from both the buyer and seller. But if you are working with an organized lender, and broker knowledgeable about SBA financing, it goes smoothly and is well organized. We start the SBA application process as soon as the offer is signed and run it in parallel with Due Diligence. Our lenders send a checklist and work with our clients to track the status of the loan application. Our lenders also have secure file sharing systems where buyer and seller can easily upload their documents.
    You’ll spend weeks trying to get an SBA loan and get rejected at the end!
    This does happen with inexperienced brokers and when buyers use a non-PLP lender or a lender that doesn’t pre-qualify the deal. At Pacific Business Sales we pre-qualify all of the businesses we represent. This ensures the business qualifies for SBA financing upfront. When an offer is accepted the first step in our transaction process is to have our SBA lender review the transaction and pre-qualify the deal. This eliminates ugly surprises later in the transaction process.
  4. You have to have a lot of collateral to get an SBA loan
    You don’t necessarily have to have a lot of collateral to get an SBA loan, in fact, some transactions are done with very little collateral. Having strong collateral absolutely helps in getting the financing approved, but it is not necessarily a deal killer if you don’t have a lot of collateral. Underwriting approval depends on many factors including, the overall strength of the deal, buyer’s experience. Buyer’s credit score, business financials, and collateral.

7 Steps to Getting an SBA Loan

  1. Find the Right SBA Lender
    Finding the right lender is a critical first step. The “right” lender may not be the one you found on the internet that is hard-selling you and is certainly not one of the big-box retails banks. If you are shopping SBA loans you hear lots of promises and sadly will have lots of broken promises if you choose the wrong bank. You want a PLP lender that will close the loan and closes quickly.
    The buyer will be choosing the SBA lender and it is critical to choose the right lender. There are many SBA lender choices and it is difficult for a buyer to know with certainty which bank is the best choice. Every bank has different industry preferences and underwriting practices. Much of the bank selection is a matter of knowing which bank will “like” this deal.
    It is best to work with a bank directly and only use a loan broker in rare and extenuating circumstances. Loan brokers make a lot of promises they can’t deliver on and the banks cannot necessarily follow through with.
  2. Approvals and more Approvals; Pre-Approval, LOI, and Final Approval
    There are lots of “approvals” along the way to funding and closing. First, the buyer will get a “pre-approval” which isn’t a promise or commitment to the deal, it mean exactly what is says, after initial review, the buyer appears to be qualified. Next is an LOI (Letter of Intent) from the lender which again is not a promise to offer financing. This comes after the lender has done an initial review of the buyer and business and it looks good, but still needs to go through full underwriting review. The last approval is the Final Approval letter from the lender which comes after underwriting review is complete and appraisals on the business and collateral are complete. Once Final Approval is received the bank is typically ready to fund in 5 to 7 days.
  3. Business Pre-Approval
    At Pacific Business Sales the first SBA approval for the business is handled shortly after listing. We want to ensure that we have a lender in place that will approve the financial parameters of the transaction as well as the industry. It is important to know which lender is willing to close on the loan with the right buyer and how much of a down payment they want 10%, 15% etc. and what they will lend. If the business was not pre-approved or reviewed in advance by the lender then this will be step one along with buyer pre-approval since the bank is starting from scratch with the business.
    If the business has not already been pre-approved the bank will require the following information from the seller:
    a) last 3 years tax returns
    b) last 3 years P&L and Year to Date P&L
    c) Current Balance Sheet
    d) A/R and A/P aging report
    e) Owner’s W2s last 3 years and year to date Payroll report
    f) verification of seller’s expenses and add-backs
  4. Buyer Pre-Approval
    After the offer is accepted the buyer will submit the financials and personal information with an application to the lender (usually within 15 days of signing the purchase agreement). Transactions move fairly quickly so it is important to know that you are with the lender that will close the transaction rather than risk losing the transaction.
    During the pre-approval process, the buyer will submit the following information to the bank:
    a) copies of their last 3 years tax returns
    b) authorize a credit check
    c) provide a copy of their resume
    d) complete an SBA Personal Financial Statement and Application
  5. LOI
    The buyer will be asked to sign a LOI from the bank which will indicate the proposed loan amount, down payment, and loan terms. When the LOI is signed the bank will require a deposit to start the business valuation, collateral appraisals, and underwriting.
  6. Underwriting
    The lender will evaluate the business financials to determine the net after debt service, cash flow and generally does it support the deal. Next underwriting considers if the business net after debt service supports the buyer’s income needs. Finally, underwriting obtains appraisals on the business and the buyer’s collateral (usually their personal residence).
  7. Final Approval and Closing!
    When underwriting is complete and approved and the appraisals are complete the Buyer will receive a Final Approval letter. When this is signed by the buyer the bank will fund the transaction within 5 to 7 days and escrow will close.

At Pacific Business Sales we believe SBA financing provides sellers and buyers with the best transaction financing. SBA financing is our preferred transaction structure for deals under $5 million (SBA financing limit) and has proven to be a win-win for both buyer and seller.

7 Things to Beware of When Selling Your Business

Selling Your Business Scam-Ripoff Alert
Category: Mergers & Acquisitions Selling Your Business 

There are a number of scams and rip-offs related to selling a business ranging from identity theft to literally stealing your business. Here’s a list of some common scams and rip-offs to watch out for when you sell your business. The best way to avoid these risks is to engage a professional and licensed Business Broker in Orange County to represent you in the sale of your business and guide you through the process.

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  1. Identity Theft

    A seemingly interested buyer may ask to see your financial statements, tax returns, bank statements, etc before they make an offer. Their story will sound logical, “I need to see the financial details before I can make an offer”, but this is not how a transaction is done if you are working with a professional Business Broker. This level of detail is provided after an offer has been made, accepted and Due Diligence has commenced. Business Brokers prepare an Offering Memorandum (prospectus) that includes a financial summary of the business that does not contain any personal information.

    A professional business broker requires prospective buyers to sign a Confidentiality Agreement and complete a Buyer Profile which includes information on their financial position and other personal details before any information is provided about the business. This protects the confidentiality of the sale as well as eliminating the would-be frauds (they never want to provide any detailed information) and a good broker can spot them.

    If you are selling your business yourself make sure you vet and qualify prospective buyers carefully before giving them any confidential information. When you do provide information make sure you redact private information such as social security numbers, personal information, account numbers, etc. Financial details should not be provided until after a written offer has been accepted and perform due diligence on the sale of your business.

  2. Business Valuation Scams & How to Sell Your Business Seminars

    Over the years there have been several companies with very polished sales pitches offering to sell your business, often at a much higher price than you dreamed was possible. The pitch is very polished and generally goes like this. We have thousands of buyers looking for businesses like yours…and to sell it the first thing we need is a business valuation, some may say a marketing package or prospectus, and the cost for the business valuation is $20,000 to sometimes as high as $50,000. The price varies according to how much they think you can afford.

    The pitchman has a very convincing story and will offer a “discount” if you sign NOW. The promised stream of buyers will never materialize and if you press them they’ll produce a list of “buyers“ that looked at your business. I spoke with one of our clients that spent $20,000 on the valuation and marketing package and after he saw no apparent activity he asked for a list of buyers and actually tried calling them. He did reach a couple and they weren’t real buyers. He pressed the company again and they sent him another list of buyers. Needless to say, he didn’t get his money back and basically threw away $20,000.

    Read more in the blogs below…

    Buyer Beware: Don’t be a Victim of Business Valuation Seminar Fraud

    Buyer Beware: Don’t Be a Victim of Business Valuation Seminar Fraud

    Four Scams that Can Impact Your Small Business

    4 Scams That Can Impact Your Small Business

    (scroll down to last paragraph – Valuation Scams)

  3. Unlicensed-Out of State Advisors

    Business Brokers in California, and many other states, are required to be licensed by the state. In California, Business Brokers are licensed by the California Department of Real Estate which requires each Business Broker office to have a licensed Broker and the agents must also be licensed. Licensed Brokers must follow state regulations, have background checks when they are licensed, and most are members of professional associations such as the IBBA (International Business Broker Association) or CABB (California Association of Business Brokers).
    Unfortunately, licensing is not strictly enforced in many states, including California, and unlicensed “advisors” actively solicit business owners to sell their business. These companies have a good pitch, offering lower commissions with an upfront fee for either a valuation or marketing package. Which is how they make their money, on upfront fees, not on actually selling businesses! The great deal on the lower commission isn’t so great when you end up paying thousands of dollars for a business valuation or marketing package and months later your business hasn’t sold, you’re out that money, and that out-of-state advisor has moved on to the next target.

  4. Quick Stock Sale – a slick trick to literally steal a business

    This one is not as common but potentially the most dangerous. A prospective buyer will approach a seller with an offer for a quick close, perhaps even a full price or very attractive offer and they’re even willing to do a stock sale which will save you a lot in taxes! Sounds great, right?
    The hook is that it is a shrewd scam to get your company for nothing, literally stealing your company! There are a few variations on how it may play out, but all of them result in closing with no actual cash out of pocket from the buyer. Most are a clever shell game where it looks like they are putting money in but actually get it all back and then some. They do this by having a low down payment (maybe no down payment after A/R, assumption of liabilities, and other credits), and after closing leave credit cards, loans, and other liabilities in your name. After closing they max out lines of credit, collect the A/R, don’t pay the bills, and disappear. Sometime later you start getting calls from creditors looking for payment from you – and you thought you sold the company!
    Below are two real-life examples of these scams…

  5. Earnouts

    Earnouts are a transaction structure where some of the value of the company is paid overtime as specific financial goals are met. In some transactions earnouts are necessary, but they can lead to problems if they are not structured properly. The risk for the seller is that if the buyer fails to achieve these goals then the seller loses the value tied to that metric. So your purchase price is not guaranteed, if the buyer-business misses those future goals your value goes down, sometimes to zero on the balance due.
    An experienced Business Broker knows when an earnout is necessary and cannot be avoided and equally important knows how to structure it to minimize your risk.

  6. Large Seller Notes = HIGH risk

    If your business qualifies for SBA financing and a buyer is insisting on a larger seller note because they “want to avoid the delays and hassle of working with an SBA lender” beware! SBA financing is prime rate + 2.75% maximum which is presently around 6% over a ten-year term. A typical seller note is between 6% and 8% interest over 5 years. Clearly, SBA financing is the better option for the buyer with much lower debt service. So why would a buyer want a Seller Note with much higher monthly payments? In our experience if a buyer is avoiding SBA financing and insisting on a Seller Note it is typically for one of the following reasons:
    Typical reasons a buyer would want to avoid SBA financing:
    a) They won’t-can’t qualify due to poor credit or insufficient cash down payment.
    b) They don’t want to risk their personal credit and collateral and if they can get you (the seller) to carry the note they have little risk and can walk away if things go badly down the road.
    c) The worst-case scenario is they don’t intend to pay the note and want to get the business with as little cash down as possible and then refuse to pay the note for a reason they cook up later. You can engage an attorney to sue them and try to get paid but it is expensive, takes a long time, and the success rate for collecting is not high.
    Clearly, at Pacific Business Sales, we are not fans of large seller notes, which is why our preferred financing method is SBA financing. SBA lenders often require a 10% Seller Note which means at closing you will receive 90% of the transaction value less closing costs and commission.

  7. Upfront Fees from Brokers or Advisors

    Professional Business Brokers generally do not charge upfront fees. In fact, it is customary for there to be no upfront fees for the sale of small to mid-sized businesses with upfront fees only coming into play on transactions valued at over $10 million. Your Business Broker’s commission is paid from the Seller’s proceeds at the close of escrow. If your business broker is asking for upfront fees of any kind on a transaction valued under $10 million you should shop around, and also check their licensing to see if they are a licensed broker.
    At Pacific Business Sales we do not charge any upfront fees and we offer a comprehensive free Market Value Analysis (that’s right, you don’t need to pay for a “valuation”), and we pride ourselves in Orange County for being chosen as the best business broker to help you sell your business.

How to Get Through Due Diligence on the Sale of Your Business

Getting through Due Diligence on the sale of your business
Category: Mergers & Acquisitions Selling Your Business 
Bill Grunau

What is due diligence? Why does a buyer need to perform due diligence? What information, records, and/or financial materials will the buyer want to access? How long will due diligence take? As a business owner preparing to sell my business, when should I start preparing for due diligence? Above are common questions sellers ask, never having sold a business before and wondering what the importance of due diligence is, and why they have to provide a buyer with all the detailed and sensitive information buyers and their accountants ask for.

If you are working with a professional Business Broker in Orange County they will guide you through the process and advise you on how to prepare. Your CPA will be a key advisor in Due Diligence and you should involve them early in the process so they are prepared when an offer is made.

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What is due diligence?

Due diligence is the review by the buyer and/or their CPA, after an offer has been accepted, of your business’s financial statements, employee, vendor, customer (names redacted if needed) records, insurance policies, business licenses, and material contracts generally for the last three years.

Why does a buyer need to perform due diligence?

The buyer has based their offer on the information provided and needs to confirm that what was represented to them is true and correct.

Due Diligence is normally a contingency in the Purchase Agreement and If there are any inconsistencies found the buyer can choose to renegotiate or cancel the Purchase Agreement. If you want to learn more about due diligence and be aware of scams when selling your business speak to one of our Business Brokers.

What information, records, and/or financial materials will the buyer want to access?

Below is an example Due Diligence List of information that buyers and/or their CPAs might request. The list can vary according to industry and size. These are common items that will need to be gathered and readily available when an offer is made. For simplicity and convenience, most items can be added to a Dropbox file that your Business Broker sets up to help keep track and facilitate the Due Diligence process.

  1. Bank Statements – Last three years including any year to date bank statements.
  2. Corporate Tax Returns – Last three years. 
  3. P&Ls – Last three years plus Year to Date P&L. 
  4. Balance Sheet – Last year-end balance sheet (included in the offer) plus year to date balance sheet.
  5. A/R aging summary
  6. A/P aging summary 
  7. Add backs – review of Seller benefits and expense add-backs.  Can be accomplished at the Seller’s office in person with the Seller providing the details or through buyer’s view-only access to QuickBooks file or other accounting software.
  8. List of Employees (review of files will have to be onsite due to privacy of employee info).
  9. Review of Contracts (typically onsite since too many to scan and upload).
  10. List of Vendors. 
  11. Equipment list (included in offer). 
  12. Review & Inspect Equipment: Buyer and Seller review the equipment
  13. Customers List with annual sales last 3 years (in some cases customer names may be redacted).
  14. Review of Customer and Vendor Invoices – Review these on-site.
  15. W2s and 1099s for employees. (redact private information) 
  16. Review Seller Disclosure Statement with Seller and Buyer
  17. Business License(s)
  18. Copy of insurance policies, Workman’s comp rates. Note: Buyer will need Loss Runs from Workman’s comp carrier so the buyer can get quotes. 
  19. Office-premise leases.
  20. Corporate Documents: Articles of Incorporation, By-Laws, Minutes, Shareholder Certificates, Stock Ledger (if a stock sale)
    Note: The Buyer’s CPA may wish to request additional information

How long will due diligence take?

The length of time it takes to perform Due Diligence will depend on the size, industry, and complexity of the business operations. Generally, the buyer is given 3 days to prepare a Due Diligence list, the seller has 5 days to gather the materials and the review of the materials typically takes two weeks to complete after receipt of the information. On larger, more complex transactions the review of the material can take up to a month including an attorney’s review on the buyer’s behalf. 

As a seller of my business when should I start preparing for due diligence?

When you list the business you will be asked for some of the information needed for Due Diligence in addition to the amount for Owner’s Add Backs. When starting the listing process it is a good practice to separate your receipts and details for personal and owner’s expenses so they will be readily accessible when an offer is made and accepted.

If you have any questions during the Due Diligence process Pacific Business Sales, as the best business broker to sell will assist you every step of the way and keep you informed to help you navigate due diligence and the entire process for the sale of your business for a smooth and successful outcome. That is why it is important to pick the right Business Broker to sell your business and help you with this process

How to Pick the Right-Best Business Broker to Sell Your Business

Category: Mergers & Acquisitions Selling Your Business 
Bill Grunau

After making the decision that you are ready to sell and the time is right, the next most important decision is who will represent you in the sale of your business?  Your CPA will be there for financial advice and your attorney for legal advice, but who is going to actually sell the business, structure the deal, handle the negotiations, draft the purchase agreement, guide you through the Due Diligence, SBA or other financing, escrow and closing?  All of this and more is the role of your Business Broker in Orange County.  

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Obviously, your Business Broker is going to play a critical role in the sale of your business.  In fact, your choice of Business Brokers will likely determine whether your business sells or not, how the transaction goes (smoothly or difficult and frustrating), the price you realize, and even your cash at closing (more on this below).  

So how do you choose the right-best business broker, what should you expect from them, and what are the steps in selling your business?  

10 Steps in Choosing the Right-Best Business Broker to Sell Your Business & What to Expect from Your Business Broker

  1. Industry Experience Industry experience pertains not only to experience as a business broker and in business sales transactions but also experience with transactions in your specific industry.  Selling a manufacturing or construction-contractor business is vastly different from selling a small mainstreet business.  At Pacific Business Sales we specialize in manufacturing, construction/contractor businesses, industrial businesses, e-commerce, and healthcare and we do not sell Mainstreet retail, B2C-consumer businesses, or food service businesses. 
    • Manufacturing companies
    • Technology companies
    • Construction-Contractor businesses
    • E-commerce
    • 3PL & Distribution businesses
    • Healthcare
  2. No Up-Front Fees, “Marketing Fees”, “Valuation Fees”, or other advance fees You should not pay any upfront fees on the sale of a small to midsize business.  It is customary for Business Broker commissions to be paid through escrow at closing and up-front fees are rare and generally not required.  Pacific Business Sales does not charge any up-front fees for the sale of your business and we offer a Free Market Value Analysis as part of our services (see below)
  3. Market Value Analysis or Opinion of Value Your Business Broker should provide you with a Market Value Analysis or Opinion of Value before you sign the representation agreement.  At Pacific Business Sales we use Peercomps for our  Market Value Analysis.  Peercomps is a professional business valuation software that includes sold comparable sales data from the SBA transaction database.  Many brokers use standard earnings multiples which are not necessarily appropriate or accurate for your business.  Earnings multiples vary by industry and business size and are NOT a one size fits all figure. 
  4. Tax Strategies Getting the maximum value for your business is great but the thought of giving up nearly half of that to taxes makes every business owner cringe.  There are several tax strategies available that can defer up to 90% of the taxes from the sale of your business and substantially reduce your taxes.  We work closely with a CPA that specializes in tax strategies for the sale of businesses that will meet with you to discuss the best tax strategies for your particular needs and perform due diligence on the sale of your business to provide detailed information and be prepared.
  5. Marketing One of the most common questions business owners have is “how do you find buyers?”.  Most inquiries come from advertising on business for sale websites like BizBuySell.com and BizQuest.com etc.  Business for sale websites have thousands of businesses for sale, but how does your business stand out and get found? At Pacific Business Sales we feature all of our businesses for sale ads placing them at the top of the business for sale websites with expanded headlines/titles.  We also send email blasts to our own buyer list of over 3,000 active buyers and 70 Private Equity Groups plus the BizBuySell buyer email list. 
  6. Offering Memorandum – Company Prospectus The Offering Memorandum (OM), aka Business Profile, is the marketing brochure or prospectus for your company.  It is a confidential document and only sent to prospective buyers after they have signed a Confidentiality Agreement (NDA), completed a Buyer Profile which includes information on their financial position and background, and have been screened.  At Pacific Business Sales our OMs are typically 20 to 30 pages, sometimes more, and very comprehensive.  Our goal is to provide the Buyer with a complete picture of the business so they can determine early on if this business is a fit for them.  We have found this motivates buyers that are well suited and interested in your type of business and of equal importance it filters out buyers that are not a fit. 
  7. Buyer Screening Good marketing will drive lots of inquiries about your business.  That’s the great news, but as a seller, it can become frustrating to meet with a parade of buyers that are not serious about your business, not to mention the time it consumes.  We meet with each buyer to discuss your business and answer the initial questions about the business prior to setting up a meeting with you.  We have found this reduces the number of seller meetings because in our initial meeting some buyers discover the business is not a fit for them after all and sometimes we find that the buyer is not qualified for the business.  Of course, you will still have buyer meetings that do not result in an offer from that buyer, but it does reduce the number of these meetings.
  8. Professional Associations Professional trade associations such as the California Association of Business Brokers and IBBA (International Association of Business Brokers) provide professional training and resources to Business Broker members.  Your Business Business Broker should be a member of the IBBA and local professional associations such as CABB. 
  9. Industry-standard purchase agreements and forms Your Business Broker should use industry-standard forms such as the CABB purchase agreements and disclosures for the sale of businesses or the AIR (Association of Industrial Realtors) purchase agreements and disclosures for the sale of commercial buildings and real estate.  Some Business Brokers use “In-house” forms which may or may not have been written by an attorney and as a client, you have no way of knowing if these forms are adequate or sufficiently cover the legal aspects of your transaction. The problem with in-house purchase agreements often isn’t what’s in them, it’s what’s not in them.
  10. Testimonials and reviews The experience of actual past clients is a great way to see how a Business Broker works with their clients and their results.  At Pacific Business Sales we are very proud of our numerous customer reviews from both buyers and sellers on Google and our website.  

You’ve invested your time and money to build your business, to realize the maximum value for your business you’ll need the best business broker representing you in the sale of your business. You also want to beware of scams and rip-offs when selling your business. We are business brokers in Orange County that you can trust.  

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How to Minimize Taxes & Maximize Net Proceeds Selling Your Manufacturing Business

Cut Taxes on Sale of Your Business
Category: Mergers & Acquisitions Selling Your Business 
Bill Grunau

In our Blogs on Developing an Exit Strategy and How to Prepare to Sell Your Business we talked about how to Maximize the Value of Manufacturing Your Business which is obviously a high priority for every business owner.  But what if you could substantially increase the Net Value of your manufacturing business without changing anything in the business at all?  As your Business Broker representing you in the sale of your business our primary goal is to sell your business for the maximum value, and we have found we can often help our clients achieve their financial goals by helping them increase the net value (after taxes) from the sale.   

What do I mean by Net Value?  I’m referring to what you actually realize for the sale of your business after taxes, your net after-tax proceeds.  It’s great to build a business, increasing the value over the years, but frankly, it’s agonizing to think of giving up nearly half of the value you worked so hard to build to state and federal taxes!

It’s true you can reduce the tax bite a bit if the transaction is a stock sale as opposed to an asset sale, but even with a stock sale, with most of the value taxed at the lower capital gains tax rate, the tax bill will be a big one! 

The old adage there are only two sure things in life, death and taxes, doesn’t have to be wholly true.  There are tax strategies used by wealthy investors that can be implemented for small and midsize business owners where you can defer up to 93% of the taxes due at closing and often reduce the overall taxes by as much as 30% or more in some instances.  While these tax strategies have been around since the 1970’s, they are not well known, and often overlooked unless your tax advisor-CPA is very familiar with tax strategies for business sales.  

Example of Business Sale Tax Liabilities with & without implementing a Tax Strategy

As an example, let’s say you sold your manufacturing business for $5 million with no seller note (I’ll discuss this later below). 

Without A Tax Planning Strategy

If you are doing an asset sale, assuming you have very little or no basis in your company since you started it years and years ago, then you are looking at a tax rate of around 39% federal and 11% for the great state of CA. That comes out to a 50% combined tax rate, a potential of $2,500,000 in taxes on a sales price of $5,000,000.  If you have the same basis in a stock sale you are looking at a minimum capital gains rate of 20% ($1,000,000).  In many cases, some of the sale is treated as ordinary income by the IRS, and then that amount goes up even further!

With A Tax Planning Strategy

Installment Sale – With an installment sale, you are basically selling your business to the buyer with a seller note, often a very large seller note.  Meaning you are taking payments over a number of years as the buyer pays for the business.  The great part about an installment sale is the fact that you don’t report the income until it is received.  So, if you have a 5-year installment (aka Seller) note, you only receive 1/5 of the sale each year.  So, you only report 1/5 of income each year. This can be a great way to spread the income over several years, keeping you in a lower tax bracket each year, ultimately saving a lot on taxes.

The drawback to an installment sale is that you do not receive the full proceeds from the sale right away. Therefore, you run the risk of the buyer not being able to make the payments later.

So, in this example, if you were to sell your business as an asset sale with say $2 million dollars down and a $3 million Seller (installment) note, you would pay taxes in the current tax year on the $2 million and pay taxes on the remaining $3 million over the next five years as the income is received (if it is, there is of course risk with a Seller Note). 

So you would reduce taxes a bit on the deferred $3 million of income, but this is not a great solution because your still paying taxes on the $2 million received at closing and the remaining $3 million will be taxed over 5 years which really doesn’t defer much income, not to mention the risk of carrying a Seller Note!

Deferred Sales/ Installment Trust – While this tax strategy has many names, they essentially work similarly and have generally the same benefits.  Ultimately these have many of the benefits of the installment sale and reduce many of the drawbacks (e.g. the risk of carrying a seller note to the buyer).  

In a Deferred Sales/Installment trust, you sell your company to a trust on an installment agreement for 10 years (as an example) and then the trust simultaneously sells the company to the buyer.  At closing, you do not have “constructive receipt” of the funds and therefore your individual tax liability is significantly reduced.  Now the trust is the one who is responsible for the taxes.  

Since the trust just bought the company from you it has a tax basis of 100% of the value, consequently, there is no tax due from the trust.  Now the trust has the full proceeds with no taxes taken out yet, so you eliminated the risk of the buyer not being able to make the payments.  Since you have an installment agreement with the trust you can take money out of the trust at a schedule determined and controlled by you.  

So, you control how often you take money out to keep your tax rate low and deferred for years according to your personal needs.  Meanwhile, the trust is investing your proceeds (pre-tax) so your capital continues to appreciate and grow and is taxed when you take the money out of the trust.  You can almost determine your own tax bracket (not considering your other income streams).

These are only a few of the tax planning strategies available.  There are a lot of moving parts involved with tax strategies that must be handled correctly not only to minimize taxes but also to ensure it is compliant with IRS requirements.  A well-structured Installment sale or Installment trust can be a great strategy for a business owner looking to minimize risk and maximize their net proceeds from the sale of their business.

Business Tax Strategy CPA – Advisor

Pacific Business Sales is not a CPA or financial advisor.  We work closely with a CPA firm experienced in tax strategies and business sale transaction taxes, Morrow & Company.  Darren Morrow of Morrow & Company is the CPA we work with and refer clients to for tax strategy advice and has contributed to this article. 

Darren P. Morrow, CPA

Morrow & Co.


Office: (714) 385-1212



Tax liabilities are different for every business sale-transaction based on the transaction type (stock vs asset sale), the tax basis for your company, transaction structure, and other factors.  There is no one-size-fits all answer for taxes on the sale of a business.  The examples above are general in nature and will not apply to every or any particular transaction.  You should review your particular prospective tax liabilities for the sale of your business with a tax advisor-CPA familiar with business sale transaction taxes.  Pacific Business Sales and its agents and broker are not tax or financial advisors, the information above is for informational purposes only. 

COVID Relief Act has 6 Months No Payments on New SBA Loans in 2021; plus PPP 2021!

SBA Financing for selling your business
Category: Buying a Business Selling Your Business 
Bill Grunau

Great news for business owners-sellers and business buyers in 2021! 

6 Months No Payments on New SBA Loans from February thru September 2021 plus PPP Loan Program 2021! 

The COVID Relief Act passed in December 2020 has reinstated the 6 months of loan forgiveness on new SBA loans funded between February 1st, 2021 and September 30th, 2021.  This means a buyer using SBA financing will not have any loan payments for the first six months after closing and the principal and interest due will be paid by the SBA (essentially forgiven).  Pacific Business Sales are Orange County Business Brokers specializing in e-commerce businesses for sale in Orange County and we work exclusively with SBA PLP (Preferred Lending Program) banks. Learn more about how Pacific Business Sales can help sell your e-commerce business for max value.

For example, a $1 million SBA 7a loan at 5.75% (SBA rate as of December 2020), the monthly payment is $10,976.92 and the buyer would save $54,000 (loan forgiveness is capped at $9,000 per month).

Obviously, this saves buyers 6 months of loan payments and equally importantly it gives buyers 6 months to build working capital through increased cash flow as a result of no loan payments.

In 2020 Pacific Business Sales closed many transactions with this program and it was responsible for substantially increasing business sales and SBA loan activity until it ended in September.  We expect this program to do the same for 2021 business sales and SBA loans.  2021 is already shaping up to be a very business year for business sales. For more tips, such as why we suggest using a standard purchase agreement for e-commerce business sales, view our blog.

UPDATE: SBA 7a Guarantee Fee Waived & 3 Additional Months Loan Forgiveness on 2020 Loans 

The final COVID Relief Act may include a waiver of the 3%, or 3.5% for loans over $750,000, SBA 7a loan guarantee fee paid by the buyer.  On a $500,000 SBA loan, this is a savings of $15,000, and on a $1 million SBA loan, this is a savings of $35,000!  We should have confirmation of this by early January.  

The COVID Relief Act also includes an additional 3 months of Loan forgiveness for qualifying SBA loans funded in 2020 that had 6 months of loan forgiveness.  

More Great News, PPP 2021 

The COVID Relief Act also includes funding and rule changes (good ones) to the popular PPP program.  There is a Round 2 of PPP and business with 2020 sales that are 25% lower than the same quarter in 2019 qualify.  

A few more details below…

  • 2020 sales 25% lower than the same quarter in 2019 qualify.
  • Business less than 300 employees
  • Simplified loan forgiveness for loans under $150,000
  • 2.5 months average 2020 payroll for loan amount
  • Must use 60% for payroll and 24 weeks to use the funds 
  • Additional expense categories allowed for the other 40% use of funds 

List of FinTech Companies Offering PPP Loans

Most small business owners had difficulty obtaining PPP loans from their own banks if they banked with one of the big national banks.  Many were able to get PPP loans more quickly through local or regional banks and FinTech companies.  Below is a list of FinTech companies that offered PPP Loans during the 2020 PPP program. 

NOTE the SBA has not provided the banks with the guidelines or complete program information yet and the lenders will probably not be ready to start taking applications until mid-January 2021. 

  1. Kabbage https://www.kabbage.com/paycheck-protection-program-loans/
  2. Veem https://www.veem.com/sba-ppp/
  3. Biz2credit https://www.biz2credit.com/
  4. Lendio https://www.lendio.com/
  5. Fundera https://www.fundera.com/
  6. Divvy https://getdivvy.com/covid-19/sba-ppp-loans/ 
  7. BlueVine https://www.bluevine.com/sba-cares/
  8. OnDeck https://www.ondeck.com/resources/what-is-the-paycheck-protection-program
  9. Funding Circle https://www.fundingcircle.com/us/paycheck-app-start/
  10. NAV https://app.nav.com/paycheck-protection-program-form
  11. Ready Capital https://ppp.readycapital.com/
  12. Cross River Bank https://www.crossriversba.com/
  13. Square https://squareup.com/us/en/l/sba-ppp-loans
  14. Paypal https://www.loanbuilder.com/ppp-loan-application
  15. Intuit(Quickbooks) https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/
  16. Credibly https://sba.credibly.com/apply-online
  17. Brex + Womply https://www.womply.com/brex/
  18. Fundbox https://fundbox.com/paycheck-protection-loan/

Details on SBA Loans and PPP Round 2 in COVID Relief Act of 2020/2021

Section 325: Extension of Section 1112 Payments, the debt relief program.  

Provides $3.5 billion in funding for extension of Section 1112 payments—appropriations available through September 30, 2021.

  • Resumes the payment of principal and interest (P&I) on small business loans guaranteed by the SBA under the 7(a), 504 and Microloan programs, established under Section 1112 of the CARES Act.
  • Provides that all borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three months of P&I, starting in February 2021. Going forward, those payments will be capped at $9,000 per borrower per month.
  • Provides   that,   after   the   three-month   period   described   above,   borrowers   considered   to   be underserved—i.e.,  the smallest  and  hardest-hit  by  the  pandemic—will  receive  an  additional  five months of P&I payments, also capped at $9,000 per borrower per month. These include:
    • Borrowers with SBA microloans or 7(a) Community Advantage loans
    • Borrowers with any 7(a) or 504 loan in the hardest-hit sectors, as measured by the severity of sector-wide job losses since the start of the pandemic, including all those belong to 2- and 3- digit NAICS categories with the most severe job losses since the start of the pandemic: accommodation and food services (72); arts, entertainment, and recreation (71); educational services (61); mining and logging (213); apparel (315); clothing and clothing accessory stores (448); sporting goods, hobby, book, and music stores (451); air transportation (481); transit and ground passenger transportation (485); scenic and sightseeing transportation (487); publishing industries, except Internet (511); motion picture and sound recording industries (512); broadcasting, except Internet (515); rental and leasing services (532); and personal and laundry services (812).
  • Provides SBA payments of P&I on the first 6 months of newly approved loans will resume for all loans approved between February 1 and September 30, 2021, also capped at $9,000 per month.
  • Specifies that if the SBA projects that appropriations provided for the debt relief program are insufficient to fund the extensions provided, the Administrator may proportionally reduce the number of months provided in each extension.
  • Clarifies eligibility and increases program integrity:
    • SBA payments should be made on any loan approved before the applicable deadline, and debt relief payments should be made only once the loan is fully disbursed.
    • SBA may establish a minimum loan maturity period for each loan product covered under this section to prevent program abuse.
    • Any business or applicant may only receive P&I payments for only one loan approved after CARES Act enactment.
  • Requires that SBA place program information on its website, conduct outreach to all borrowers, report monthly to Congress on program spending, and educate lenders, borrowers, SBA district offices, and resources partners about the program.”


How to Sell Your e-commerce business for Maximum Value

Selling e-commerce business
Category: Selling Your Business 
Bill Grunau

E-commerce businesses operate with different business models from conventional brick and mortar businesses.  The primary differences are the operational and technological aspects of the business which are often key to the company’s success as well as value drivers for the business.  Consequently selling an e-commerce business is a bit different from selling a conventional business and your Business Broker must be familiar with how your business operates, e-commerce metrics, and how to value an e-commerce business.  Pacific Business Sales is the leading business broker for e-commerce businesses for sale in Orange County.

Choosing an e-commerce Business Broker

Your Business Broker is the first point of contact for prospective buyers so they must be knowledgeable about your business, e-commerce, and the metrics for your business.  It is vital that your Business Broker understands your company and its business model so they can accurately convey this to prospective buyers.  At Pacific Business Sales we understand technology companies, e-commerce, digital marketing, the platforms you run on such as WordPress, Magento, Shopify, WooCommerce, BigCommerce, and most importantly how to value and sell e-commerce businesses.  Pacific Business Sales specializes in the sale of eCommerce, technology, industrial, manufacturing, and construction companies ranging from $1 million in sales to $50 million in sales. 

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Of course, a key concern for owners-sellers is the confidentiality of the prospective sale.  Our sales process ensures the prospective sale of your business remains confidential.  Our advertisements for the business provide an overview of the business, without any details that would compromise the confidentiality of the sale.  Prospective buyers only receive the Confidential Information Memorandum after they have signed a Confidentiality Agreement and completed our Buyer Profile with their financial information. 

Key Factors and Value Drivers

  1. Financials, Revenue, Earnings & Growth
  2. Website & ecommerce platform – technology 
  3. Traffic
  4. Age of the business 
  5. Customer service – reviews, metrics, on-time delivery
  6. Logistics and Fulfillment
  7. Inventory 
  8. Supplier Relationships
  9. Technology

Preparing to Sell Your e-commerce Business

  1. Financial statements
    Make sure your financial statements (P&Ls, tax returns, balance sheet, and inventory) are up to date and accurate before you take your company to market. 
  2. Earnings
    Earnings, more specifically, Discretionary Earnings (DE) and EBITDA are the primary value driver for your business.  For every dollar you add to your DE or EBITDA the value of your business is increased by $3 or more.  Thus, if your DE increases by $100,000 the value of your business will increase by $300,000.   
  3. Growth
    Growth is important for any business, and even more so with e-commerce businesses.  The e-commerce market has seen explosive growth for several years and this has become an expectation for e-commerce companies.  That is not to say that an e-commerce business with flat or modestly growing sales is unsellable, but buyers do expect these companies to be growing.  
  4. Analytics & Metrics
    E-commerce buyers are different from most buyers and are very focused on the analytics and metrics for your website and e-commerce platform.  Make sure your analytics and metrics are presentable and most importantly you have the data available.  
  5. Traffic
    Of course, traffic is a key interest to prospective buyers.  The website traffic has a direct relationship to your sales revenue, conversions, and ultimately your earnings.  
  6. Conversion rate data
    Most buyers will want to see data on your conversion rates as well as retention data if you have it.  A website with excellent conversion rates offers opportunities for expansion and demonstrates the website and products are satisfying customer demand.  
  7. Customer base and concentration
    Customer data of course is also critical.  If your company has a diverse customer base it is seen as a lower risk than a company with a few key customers.  Likewise, a large-diverse customer base offers opportunities for expansion.  
  8. Sales channels
    Your sales channels are also of interest to prospective buyers.  If customers are buying directly from your website via organic traffic, Adwords, and other digital channels this is a lower risk than a company that is solely dependent on sales through Amazon. 
  9. Marketing
    Customer acquisition is of course of interest to buyers.  Again, if your company has its own marketing campaigns and is driving customers and sales to the site this is a stronger value proposition than a company that relies on customer acquisition through other channels.  
  10. Inventory – update and sell off any old inventory
    It is important that your inventory is current and turning.  Sell off any old inventory or slow-moving inventory.  Old and slow-moving inventory does not add value and in fact can be a sticking point in negotiations as buyers do not want to buy this inventory.  
  11. Organize product categories
    Review your product descriptions and categories to ensure they make sense and are easy to understand.  Buyers will be reviewing this and must be able to comprehend it easily.  If there are too many categories it can be overwhelming and confusing.  Likewise, too few categories can lack sufficient detail to understand the business and trends.  
  12. Organize customer data, remove duplicates, inactive
    Update your customer database and CRM to remove duplicates and inactives.  It is important that this data is accurate and up to date. 

While there are nuances to selling an e-commerce business, the overall sales process is the same and follows our 7 Step Process for Selling a Business

Steps in Selling an ecommerce business

E-commerce is continuing to grow rapidly and showing no signs of slowing down.  Projections for e-commerce businesses remain optimistic with revenue and earnings expected to steadily increase making these businesses highly sought after by buyers and commanding higher multiples on the market. Pacific Business Sales knows how to deliver a premium price for the sale of your e-commerce business. Read our blog for the latest news, such as SBA Loans for selling e-commerce businesses and why you should use a standard purchase offer when selling an e-commerce business.

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Why 2021 is a Great Time to Sell Your Business & Why You Shouldn’t Wait

Best Time to Sell Your Bus
Category: Business Valuation Selling Your Business 
Bill Grunau

The UCLA Anderson Economic Forecast for 2021 is looking very promising with projected GDP growth roaring back in the second quarter of 2021.  California is expected to have higher growth than the rest of the nation and has a very good economic outlook for 2021 and 2022.  

So why should you sell your business in 2021?  Why not hold onto your business and cash in on another couple of “good years”.  The answer is risk.  While “essential” businesses continued to grow and had a good 2020, the overall economy was in the tank and consumers were taking a significant hit on income.  2021 is expected to have a big rebound as a result of pent-up demand and additional government stimulus.  There will also likely be government spending on infrastructure to prop up the economy in 2021 and 2022.  All of this is great news for the short term, but eventually, it will be time to pay the bills.  

SBA Loan Incentive Program

SBA loans funded between February 1st, 2021 and September 30th, 2021 will have 6 months of loan forgiveness for the Buyer (no payments for 6 months and those payments forgiven), PLUS SBA is waiving the SBA guarantee fee of 3% for loans under $750,000 and 3.5% for loans over $750,000.  This saves buyers $35,000 at closing on a $1 million loan! 

For a buyer to take advantage of this the transaction must close BEFORE September 30th, 2021, so time is short! 

The US National Debt was 127% of US GDP in the third quarter of 2020 as reported by the St Louis Federal Reserve Bank.  As you can see from the graph below, historically the national debt has been well below 70% until after 2000, and in 2020 the national debt exploded to 127% of GDP.  Economically, this cannot last and will have to be attended to once the country and the economy has recovered from COVID-19.  

National Debt 1996 through 2020 Q3

US National Debt 1966 thru 2020 Q3

National Debt 2000 through 2020 Q3

Narrowing the timeline on the graph to 2000 through 2020 you can see the national debt was in the 60% range until the 2008 financial crisis and after that it increased to over 80%, hitting 100% by 2013.  In 2020 it skyrocketed from just over 100% to a whopping 127%. 

US National Debt 2000 thru 2020Q3

For a comparison of debt by country see the graph below (note this has the US debt is at 104% at the time of its publication). As you can see, the US debt as a percentage of GDP is nearly double that of Germany and China, and 20% higher than the UK.

Debt Comparison by Country

When the US National Debt exceeds 90% of GDP it is an economic red flag and of great concern to economists.  Of course this debt cannot be reduced during 2021 or probably even 2022 while the US economy is getting back on its feet along with the rest of the world after COVID, but eventually this debt will have to be dealt with.  That means in all likelihood one would expect the government to cut spending, raise taxes, or both in 2023.  When this happens the economy will likely stall after several years of growth through stimulus and government spending.  

What this means for Business Owners

Based on 2021 being a big economic rebound, and the risk of this recovery being followed by a recession, this is a great time to sell your business, unless you are willing to take the risk, and ride out a prolonged recovery.  

What Industries & Businesses are Best to Sell in 2021? 

The businesses best positioned to take advantage of the 2021 economic rebound are essential businesses such as manufacturing, construction, ecommerce, healthcare, and B2B services that were either unaffected or minimally affected by COVID-19 in 2020. 

These businesses will not have seen a reduction in their value from a drop in revenue and earnings in 2020 and are poised to show additional growth and stability in 2021.  During 2020 these businesses were in high demand with buyers and were able to qualify for SBA financing making the acquisition even more attractive.  

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Businesses that Should Consider Delaying their Sale

 Businesses that should consider waiting to sell are those that were severely affected economically by COVID-19.  For example, restaurants, brick & mortar retail, and hospitality businesses that were severely affected throughout 2020, their recovery will be slow.  

If your business is in one of these industries the value will have dropped dramatically as a result of the drop in revenue and earnings.  In broad terms for every dollar your earnings dropped the value of your business is decreased by $2 plus or minus.  Thus a $50,000 drop in earnings is roughly a $100,000 hit to the value of your business.  

If you can wait until your business recovers and the earnings and revenue are back on track you will be able to realize a much better value for your business.  If you must sell in 2021, unfortunately, your business value will have decreased dramatically.  

UCLA 2021 Economic Forecast, Get Ready for the Roaring 20’s!

UCLA 2021 Economic Forecast
Category: Buying a Business Selling Your Business 
Bill Grunau

UCLA economists are predicting an economic rebound in 2021 after a few weak months in early 2021.  Basically it will be a continued gloomy COVID winter, with a spring rebound starting off the recovery.  This is good news after a turbulent 2020 for the US economy and it’s great news for the California economy as UCLA is projecting California to grow faster than the rest of the US.  

The forecast expects California’s tech industry, healthcare, and construction to be the fastest growing in 2021 with retail, food, and hospitality businesses suffering a prolonged hangover from the 2020 shutdowns.  Pacific Business Sales is a top rated construction business broker in Orange County.

The forecast predicts construction of single family homes to rebound quickly to 123,000 new units, a 16% increase, due to a lack of supply, pent up demand and low mortgage rates.  Contact Pacific Business Sales today for more information on selling your Orange County construction business.

While the outlook for new home construction is bright, the UCLA 2021 forecast is warning of possible slow downs in commercial construction due to reduced demand in the short term.  The forecast also warns of possible state/local government construction projects slowing due to budget constraints, however, this could be offset by Federal infrastructure projects and stimulus to prop up the economy by the Biden Administration.  

For the latest news on business sales, such as Google reviews affecting the sale of Orange County construction businesses, follow our blog.