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Small Business Accounting Simplifies Handling Of Business

It is not about the size of the business, rather it is about the efficiency with which you manage your business that counts in the end. Now if one starts a business venture whether it is a small sized business, mid sized business or a large scale business undertaking you want to earn profit and earn lots of it. The crucial element that determines the success of any business is the manner in which the accounting and other financial transaction of the business are dealt with. So if you are running a small business, you need to handle the accounting work of your business efficiently. Small business accounting may seem to be easy to handle initially, but gradually you will realize that the task is not so easy. Ultimately you will have to resort to either hiring a professional accountant to handle your small business accounting work or buy software that make the whole process easy.

Any business irrespective of their size has different requirement and all business strategy are designed on those lines. Small business accounting must also be tailor made to suit your business needs and if you happen to be one of those business owners who have perfect knowledge of accounting and bookkeeping, rest easy your business can grow by leaps and bounds. Running a small business can become overwhelming at times and this is why it will be better for you in the long run if you get small business accounting software installed to ease up the whole process. However we also know that most of the small business owners or for that matter any other business owner are not qualified accountants, and that is why they need to hire the services of a professional to handle this.

There are accounting professionals and CPAs who specialize in providing small business accounting services to clients. The only thing you need to do here is find out a CPA or an accounting firm that provides this service to clients and hire their services for your business. The accountant will handle the small business accounting work of your business; just make sure that from time to time you oversee things. As the business owner, you will like to be informed about all the work that is being done with regard to accounting and bookkeeping of your business, so that you know where your business is heading and if you are making any profits or not.

The importance of having well maintained accounts increases all the more when you approach the tax paying season. Everyone has to pay taxes and you must make sure that you have all the calculations done properly before the season approaches. Surely you do not want to hurry things in the last moment and in the process end up doing major blunders. The whole purpose of having a professional handle the small business accounting of your business is to make things easier for you, so that you pay your tax on time. Besides taxes, the accountant also keeps a transparent record of all the financial transactions that has been undertaken for your business, so that you can implement newer business strategies.

Baby Boomer Business Owners Head For The Exit

If the supply of interested and qualified buyers of private businesses does not increase, the expansion of the number of businesses for sale is likely to depress the values for private businesses. Just as the maturation of the baby boomer generation will place unprecedented strain on areas like social security and health funding, so the boomer business transition bulge will seriously strain, and possibly overwhelm, the available supply of buyers.

That bulge is just starting to make itself felt as the first of the millions of baby boomer owner/managers now start into their 60s and begin looking at transitioning out of their business. In the next few years this bulge is expected to become a tidal wave.

In short, the forecast is that there will be a glut of businesses for sale and, following the law of supply and demand, downward price pressure for most privately owned companies as the increasing number of businesses in play chase a declining number of potential buyers. The price of businesses could fall precipitously as more and more business owners try to sell into this buyer’s market.

The coming glut in the SME business for sale market:

  • Australia reported in 2004 that 40% of SME owners were planning to leave within the next five years.
  • In the United States between 34% and 55% (depending upon the study) of privately held companies will change hands between 2006 and 2016.
  • Canada reported in 1999 that over three quarters of family business owners expected to retire within 15 years
  • In Ireland 67% of small business owners will be retiring in the next 10 years.

Bleak future for the unprepared owner

Just what this means in terms of numbers has been estimated (for the US) in an NFO survey in 2002. Among the affluent established business owners category for example (48% of the estimated total 9.5 million owners are considered affluent), the number planning to retire was expected to show a sevenfold increase from 50,000 per year in 2001 to 350,000 in 2005 (2) and to rise as high as 750,000 by 2009.

While the initial years of the wave (2004-2009) may see an increase in buyers as younger baby boomers and later generations seek to transition out of corporate jobs and buy their independence, starting in 2010 as the overall population of baby boomers ages, they will move to overwhelming ‘sell’ mode.

If the supply of interested and qualified buyers of private businesses does not increase, the expansion of the number of businesses for sale is likely to depress the values for private businesses.

The glut may well be exacerbated by an increase in the number of businesses that would normally transition within the family being forced to go to open market sale. Fully a third of family enterprises expect to pass on the business within the family but this strategy may not be feasible for a number of reasons. Apart from lack of expertise, funding or not meeting other requirements to run the family business, surveys are suggesting that fewer young people want to take on family businesses.

When a family sale or internal sale fails the seller must seek a buyer in the open market where they are likely to discover that it is worth far less than they had hoped for. All of the warts and moles of a company are only too apparent to a professional buyer applying a due diligence check.

Decreasing pool of skilled people

As birth rates decline and people live longer and retire earlier, the pressures of an aging population are shared by many countries worldwide. There are implications for business owners here also.

With an aging population a huge chunk of the baby boomer workforce will be planning to retire soon and businesses stand to lose a significant proportion of their trained personnel.

The skill set of a business’ employees constitutes a major factor in determining business value. Many companies make the mistake of only planning the financial transactional side of transition, missing the people part of the puzzle. But business value is leveraged off skilled people and smooth running operations – just the factors that may be disappearing rapidly in the near future.

Wider economic impact of failed transition

With respect to the successful transfer of businesses, the economy as whole is a major stakeholder. Given the current demographics of business owners, a high failure rate to sell – leading to business closure – will exert great impact on employment, economic output, and business formation in the future, particularly in rural areas where the loss of viable firms may reduce available employment or availability of services.

Successful business succession for retiring owners has become a major public policy issue especially in Europe, North America and Australia where programs have been set up to assist owners to sell their businesses to either their employees or, in the case of vital community assets in rural towns, to local community groups. The leveraged ESOP structure is popular as a structure to implement a gradual buyout of a retiring business owner by the employees. This process could maximize benefits to both the owner and the employees through deferring a 100% sale for a staged employee share ownership plan buyout (or buyin) process.

Time is running out for boomers

The vast majority of owner/managers have not developed an effective plan for transitioning out – many are reluctant to even acknowledge the need. Or the fact that less than half of business owners carry adequate benefit funds and are relying on the sale of their business to support their retirement.

This is a recipe for disaster in the era of the baby boomer transition. Anyone who is serious about exiting needs to be well prepared in order to compete for the most desirable acquirers, or to preserve the family business for future generations. For those business owners who intend to sell to a third party, it will become exceedingly important that they position their business to transition successfully in an increasingly competitive market.

With an impending glut of businesses developing on the market every owner must focus on developing a transition plan that increases the attractiveness, value, and saleability of their business.

Good reasons to begin transition planning now:

  • By 2009 the number of business owners wanting to sell up each year will have increased fivefold over 2004. This trend will continue for the next 10-15 years.
  • Transitioning your business during the first half of the boomer tidal wave (2005 – 2010) when the late boomers and succeeding generations start moving into ownership will provide the best chance of maximizing its value.
  • The economy is currently expanding and we are entering a strong economic cycle which creates a good environment in which to sell.
  • It takes approximately 2 years of focused activity to prepare a business for sale at a reasonable or maximum value.

Is A Home Based Business What You’re Looking For?

Introduction

Home based businesses are the fastest growing segment of business in the United States. They are popping up every day and numerous others will start a home based business within the next year. Home based businesses are becoming the norm with unlimited income opportunities. They are cheaper than founding a huge corporation, but often there is a small capital investment involved. Home based businesses are the fastest growing business segment today.

The Internet

Internet home based businesses have become very popular all over the world. Internet Home Business Disadvantages; the main disadvantage of running an internet home business is disciplining yourself to get work done, you must not procrastinate. Everyday there are more and more people all over the globe gaining access to the Internet. With the internet constantly growing at a rapid pace, any business owner can find their place and generate a substantial cash flow in the global consumer market.

A lot of people have already made their fortunes by simply realizing the huge demand for informational online products and e-books. This is a great way for the average person to cut their overhead cost by offering digital information that can be instantly downloaded. Many of these e-books cover specific topics on how to do something more effectively in a home based internet business.

The Services

Self employment, including home-based business opportunities, offer flexibility and adaptability to the rural economy and adds diversity not only to employment choices but to the mix of services and products available.

A home business is a great way for individuals to take part in a business that sells both goods and services to consumers. There are a variety of needs that home business marketing services can meet. There are many different goods and services that can be used with a home business.

Marketing

Marketing and advertising are essential to the success of any home based business. Marketing is most often cited as the area home-based business people need information about. For the ones that do make and live a Millionaires lifestyle, one of their secrets is being part of a great online opportunity.

Opportunities

In addition, the change from an industrial based economy to an information and service based economy, and new communication technologies have dramatically increased work-at-home opportunities. Home based businesses can provide many great opportunities for individuals who are interested in becoming their own boss & working from home. With so many Internet business opportunities available you want to be sure you choose a legitimate home based online business opportunity.

There is a wide range of business opportunities to consider, including Internet based businesses, retail sales, import/export, eBay stores, freelancing, affiliate programs, paid surveys, selling your own products, etc.

My Conclusion

The standards for home based businesses are intended to seek a balance between supporting a quiet, safe, and aesthetic residential environment while supporting the aspirations of home based entrepreneurs.

Now small and home based businesses are entering the marketplace. No wonder internet home based businesses are becoming so prevalent. Internet home based businesses are extremely popular job ventures this day in time. The best home based businesses are those that are well-planned right from the start & will allow you the flexibility of a lifestyle without the normal stress of a big business.