Never Fifty-Fifty (50/50)?

There is a simple rule for businesses that will have two owners working together: Never set it up as a 50/50 ownership. As I will point out later, the issues around this unwritten rule are more complicated than the statement suggests, and I do not technically subscribe to the rule, but the reason for the rule is to get owners to STOP! and think for a minute before they do something natural, but often catastrophic to their business.

In the beginning, […]

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Exit and Business Succession Planning: The Death of an Owner

Estate Planning
Unplanned Inheritance

When an owner dies, without specific planning, their business interest becomes a part of their estate. Without a will or directive, the assets in the estate will be transferred in probate according to state law. This transfer could also result in tax consequences depending on the value of the estate.  As far as exit planning goes, this may work adequately for a family run business where the spouse or a single heir is sufficiently involved in the business, […]

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Business Exit Planning for Small Business

Everyone will exit their business at one point or another.  Whether you shut the business down, sell your interests, or pass away, someday, you will no longer be in your business.  The same goes for your business partners.  One day, they will no longer be in the business. 

Some basic questions will help frame the issues:

If your business partner dies, do you want to be partners with their spouse or heirs?
If you die, will your own spouse or heirs want, […]

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Business Financing: The Art and Complexity of Valuations, Particularly Start-Up Valuations

For the last couple of weeks, we have been looking at business finance issues, and specifically, start-up business finance issues.  We started with a summary of finance options for business – sales, debt, or equity investment.  We then tied into the #ECOops team discussion at Entrepreneur Community Online and looked at the top five investor issues when your target market is investors.  Today, we will survey issue of business valuation with an emphasis on start-up valuation.  These topics are partly […]

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