Business Tips Guides

If you are the owner of a C Corp and are planning on selling your company, you must understand the ramifications of the stock sale versus the asset sale. Here is what happens when there is an asset sale of a C Corp. The assets that are sold are compared to their depreciated basis and the difference is treated as ordinary income to the C Corp. Any good will is a 100% gain and again is treated as ordinary income. This new found income drives up your corporate tax rate, often to the maximum rate of around 34%.

You are not done yet. The corporation pays this tax bill and then there is a distribution of the remaining funds to the shareholders. They are taxed a second time at their long term capital gains rate. This is often called the double taxation issue of a C Corp asset sale.

Compare this to a C Corp stock sale. The stock is sold and there is no tax to the corporation. The distribution is made to the shareholders and they pay only their long term capital gain on the change in value over their basis in the stock. The difference can be hundreds of thousands of dollars.

Most buyers have it drilled into their heads by their attorneys that they should not agree to a stock sale because the buyer will inherit all of the assets and all of the liabilities of the corporation, even the scary hidden liabilities. A second reason buyers want to do an asset acquisition is that they get to take a step up in basis of all the assets and can depreciate them at a higher amount than inheriting those assets under their current depreciation schedule.

Early in the process with the seller, communicate to them your desire for a stock sale because of the punishing double taxation you will face with an asset sale. You could give him two purchase prices, one for a stock sale and a much higher one (30% higher) for an asset sale. If you try to introduce this concept late in the process, you will find it very difficult to recover.

What can you do to convince the buyer to agree to a stock sale? If you are in an environmentally sensitive business or one with potential product liability issues, you may have a tougher time. One thought would be to agree to stringent reps and warranties and maintaining 10-15% of the transaction value in an interest bearing escrow fund pending any unforeseen issues. This delayed payment is a far superior result than immediately losing 34% of transaction value with an asset sale.

If you have a sale that is heavily weighted in good will and intellectual property as opposed to depreciable assets, step up in basis is less of an issue because the amortization schedules for good will in an asset sale are essentially the same as in a stock sale. If there are a lot of hard assets, the step up in basis is real tax savings for the buyer using an asset sale. You may counter with an offer that says you will lower your price by an amount that more than offsets his loss of step up in basis if he agrees to a stock sale.

Another approach you could use is to move a little more of the transaction value into an earn out, deferred payment, and or some seller financing. Your argument is that you will agree to stringent reps and warranties and the deferred payment component acts as a quasi escrow account. If something goes wrong for them, they still have a portion of your money.

The key here is to understand the net after tax effects of the C Corp asset sale and Stock Sale. Set your transaction value target based on the after tax proceeds you will recognize. Give the buyer one price for a stock sale and a 34% higher price for the asset sale and use this as a negotiation point. Introduce this concept to your buyer very early in the process and avoid trying to bring this issue up late in the process.

Dave Kauppi is the editor of The Exit Strategist Newsletter, a Merger and Acquisition Advisor and President of MidMarket Capital, representing owners in the sale of privately held businesses. We provide Wall Street style investment banking services to lower mid market companies at a size appropriate fee structure.

When Robin Williams told his father about his desire to become an actor, his dad advised him to study welding — “just in case.” My own parents urged me to become a teacher, but it wasn’t because they noticed the early signs of a gifted educator. My parents’ dreams for me were far more practical. Going into teaching was a Plan B — in case something happened to my future husband, I’d have something to “fall back on.”

Most of the time my parents did get it right. But everything I learned about achieving career bliss I learned by actually ignoring my well-meaning but cautious parents. That’s because, if you aspire to find work that you truly love, some of what your parents taught you could actually work against you.

Here are three childhood lessons every adult career changer should ignore as well as some exercises to help you achieve your goal.

Old Advice: Grow up
New Advice: Don’t

If you were still throwing tantrums at 12, be thankful your parents told you to “grow up.” But, if you want to recapture the experience of getting deliriously lost in a favorite pastime, growing up isn’t all it’s cracked up to be. Lots of people, director Steven Spielberg among them, knew from a young age what they wanted to do when they grew up. Your own childhood may well contain clues to a new career direction.

Make a list of all the things you were really into as a kid. Did you love to build forts? Sing? Compete in science fairs? Draw? Do magic tricks? Learn about dinosaurs? Tell jokes? Watch scary movies? Play sports? Play dress-up? Play video games? Play school?

What do your answers tell you? How might you build on these childhood interests today?

Old Advice: Follow the straight and narrow road
New Advice: Wind your way to happiness

You probably got the message growing up to always follow the straight and narrow road. Good advice for staying on the right side of authority, bad advice for coming up with “outside the box” career options. That’s because it is often the wide road with lots of detours that lead to the most interesting places. Say you wanted to turn your love of astronomy into your vocation, what career destination would you most likely wind up at, if, vocationally-speaking, you took the straight and narrow road? Astronomer. Right? A fine occupation, but it is just one of many options.

Here’s where what Patrick Combs calls his “Super-Simple, Unique & Weird Job Idea Jogger” can help. Even though his book, Major In Success, is aimed at college students, his idea jogging exercise can help anyone looking to chart a new course.

To start, fill in the blanks in the following sentence: A great job would be [verb] in the [your interest] field. The astronomy-lover who also enjoys reading would write: A great job would be reading in the astronomy field. This might lead to such off-the-beaten-path careers as: Editor of an astronomy magazine, NASA researcher or author of books about the latest astronomy developments. Change the verb to drawing, says Combs, and see what ideas get jogged. You could: Illustrate astronomy books. Design observatories. Map star systems. Create science fiction paintings, murals, or coloring books.

Old Advice: Never talk to strangers
New Advice: Talk to lots and lots of strangers

“Never talk to strangers” is good advice if you’re approached in a dark alley, bad advice if you need encouragement to quit your programming job to become a park ranger. In fact, if the choice is to seek out support from a group of total strangers or from your own family, go with the strangers. The reason, says career counselor Barbara Sher, is that “almost any stranger would respect your dreams more easily than our family does.” To prove it, try this assignment from her book I Could Do Anything If I Only Knew What It Was.

Tell a group of strangers the most offbeat dream you can think of — like raising Dalmatians in the Himalayas. Tell them, however, that you don’t yet have any contacts in Tibet. Not only will they be interested, says Sher, “they’ll even try to solve your problem.”

Now, she says, try the same experiment with your family by announcing that you’re going to quit your corporate job and sign on as crew on a clam boat off Rhode Island [or the reverse]. Observe whether they “drop their forks before or after they scramble to talk you out of your ‘folly’.”

If you’re ready for a big career change, maybe it’s time you actually do get bigger than your career confining britches. It can be as simple as re-igniting your childhood passions, exploring a more creative career search path, and seeking out the right people to encourage your dreams.

Oh, on the wearing clean underwear thing in case you’re ever in an accident — your mom was right.

Valerie Young abandoned her corporate cubicle to become the Dreamer in Residence at Changing Course, a career change website for people who want be their own boss and work at what they love. Her career tips have been cited in The Wall Street Journal, USA Today, Woman’s Day, MSN, CareerBuilder, and iVillage. Go to http://ChangingCourse.com/work.htm for a free report on how you can make a career change that gives you the freedom to do work you love.

When starting an internet home based business the main concern is on how much it is going to cost you before you can create a profitable internet income. The secret to that road is to actually market your business.

The actual marketing of your Internet home business is the key secret to being able to create profitable internet income and there are many methods that you can do to be effective in it. For starters what you would need are those ways that are easy and free of any additional cost. The only capital you would need here is for your time to be able to learn all things needed to be learned and time to apply and re-apply it.

For serious business owners who wanted to conquer this internet market, a website is your first step. The goal here is to drive traffic to your web site. Of course traffic it is that will lead to sales. I will be honest in saying that if you are on a budget this way might take a little longer longer than to one who has money to spend in purchasing target leads. The upside is you will gain knowledge in this that can last forever once you have conquered in successfully driving free traffic.

The internet world have a lot of highly effective ways for internet marketing and these methods are what you can start working on immediately to drive your desired targeted traffic to your internet home business website and create income.

First stop is having an intelligent keyword selection. Keywords in simpleton are words that you mainly based your business on. Everything about your business should revolve around a good keyword. The public uses these keywords in searching and if you associate it to your website chances are you would get a desired view.

Next is the now famous search engine optimization or seo. Once you have sets of keywords you need to use it for your benefits. You have to base your titles or product descriptions about this, you even need to use it for your promotional activities this is the way of optimizing your website. You also need to create a site map that you can submit to different search engines so that they can recognize the optimization steps that you have done. You have to manually do this to different major search engines periodically.

Next is through blog, forum and article postings. Advertising in these media can be an easy and effective way in interacting with your potential customers. You can visit major forums, create blogs that would concentrate on your product base. For articles however, you need good quality content that you can submit major article directories. Remember that your goal is to reach your market. The more efforts you do, the better income for you.

Finally by getting involved in learning you can surely upbeat your income. A lot of these free highly effective methods of driving traffic to your website is very beneficial.But you need to remeber that a lot of other ways are there so invest in a good learning program, with it you will not only create internet income but you will also find your skills improving. Once you know a lot more you can start in getting involved in the more technical methods of marketing, which will take your income to a higher level.

Learn how you can generate well over $10,000/month online via Profit Lance internet marketing course. The only IM course online featured on CNN Money, Forbes, Oprah, and Personal Money. See more on Profit Lance reviews.

Wanting to start a real work at home job or business is no longer a new concept. Hundreds of people log onto the internet each hour to search how they can work from home. However you are intrigued by the idea of making money without leaving your property, doesnt mean you will have the motivation to actually put in the work.

The frustration of looking for a legitimate real work at home job that pays well and meets your needs gives you some indication as to what you are up against. Earning money from home is not the easiest way to get a paycheck. However, it doesnt put people off from trying their hardest to do it. Those who do work from home and enjoy it have some way of keeping themselves motivated. Here are a few

1. They have a work from home business plan:

By making a business plan they are able to outline and budget their expenses (which is what makes most business go under), decipher who their target market is and create an objective that is a reason for working home in the first place, i.e. I want to be able to spend more time with my family. And they return to this objective whenever theyre lacking motivation.

2. They are organized:

Having a business plan is one way to keep yourself on track but so is having a neatly set up office. Since clutter can drain anyones motivation and energy, they eliminate it by keeping their office organized and tidy.

3. They dont fall for every offer:

Because there are so many legitimate real work at home jobs or businesses it can be difficult to say no, especially when youre eager to make money. But motivated people carefully consider whether or not the work from home opportunity is a good fit for them. By turning down offers that dont suit them they can focus on those that do. Its hard to stay motivated when you have too many things going on. Saying no helps you to refocus your priorities and get back on track.

4. Find a mentor:

Being your own cheerleader 24/7 can cause anyone to lose motivation. But by finding a mentor and working with them, youll not only get support, youll find better ways to manage your real work at home job or business. This is a surefire way to get your pep back.

5. Get your family on board:

Having a mentor is great but if youre family doesnt support you you are liable to sink back into bummed out state. Before you even start a work from home business make sure you let your family know and get them on board. This will change their lives too and the more everyone supports each other the more willing everyone is to motivate each other.

6. Set realistic work from goals:

Trying to become a millionaire within three months of starting your real work at home job or business will not only frustrate you it will make you tired very quickly. All your work from home goals should be realistic. The more attainable something is the easier it is to stay motivated.

Working from home may not be the easiest thing but it does have many rewards. To keep yourself motivated, so you can reap these rewards, consider the tips above.

Jeff Casmer is a leading legitimate work at home expert and is a work from home business owner. His “Top Ranked” Real Work at Home Jobs Directory gives you all the information you need to Work From Home in the 21st century.

The so-called safe path is always “easier.” Just ask Ursula Clay. Ursula tried to take the secure career path her immigrant parents had chosen for her. In fact, she worked incredibly hard to achieve a level of financial success and security her parents, both high school dropouts, never had. Says Ursula:

“I worked very hard to get through law school at night, all the while working full time and struggling financially. When I finally achieved what I thought was the brass ring - i.e., good salary, fancy title, etc. - it was a thoroughly disappointing revelation that this was the end result of all the hard work. It felt very empty and meaningless, further made so by the birth of my two beautiful children. I just felt as though I could not possibly have been put on this earth to toil way for 12 hour days at a job that kept me away from my family, and which I dreaded going to every day.”

“Unless you walk out into the unknown,” says Tom Peters, “the odds of making a profound difference in your life are pretty low.” After two years of executing her escape plan which included many moments of fear and uncertainty, Ursula is embracing the unknown. “It’s like getting out of college again, and having a clean slate. I do not know where I am going to end up, or what might come my way. In fact, staying home with my kids right now may be the next calling, and after that, who knows!”

Laugh in the Face of Fear

Anyone who has ever ventured out of their safe little world will tell you they had doubts. When it comes to making a major life change, not only is a certain amount of fear perfectly normal, it’s actually helpful. For example, it’s our healthy fears that keep us from jumping off cliffs. And the great thing about fear is that there are always ways to get around it.

So try laughing in the face of fear. Am I kidding? No. Ridiculing your fears is actually a very effective technique for banishing them. Let me show you what I mean.

If I told you the U.S. Senate had just voted to relocate the capital from Washington, D.C. to Las Vegas, your response would probably be something like, “No way!” That’s because the mind rejects that which it considers absurd. It’s the same with fear. The trick is to turn your fears into a ridiculous event in your mind. That way, you allow your natural human reaction to absurdity to take over and dismiss them.

Try it yourself. Take your biggest fear and take it to extremes. Really exaggerate it. Let’s say you’re paralyzed by the fear of failure. Try picturing your entire family, all of your friends, your neighbors, everyone you went to high school with, even your boss, standing outside your cardboard-box home holding up signs that read: We Told You So!

Pretty ridiculous, right? When you realize that your worst-case fantasy is just that — a fantasy — what felt overwhelming will now feel much more manageable.

Change Is Easy — When You Take It One Step at a Time

Another way to manage the fear of venturing out on your own is to start small. If the thought of just up and quitting your day job frightens you, start building your freelance career on the side. Begin with low-risk steps and gradually work your way up to the harder stuff.

You never know what is going to move you to action. It can be a book, something you saw on television, a chance conversation, a workshop.

Even though Ursula has taken the leap, she’s now working on the second part of her goal — coming up with ideas for multiple income streams. The good news is that having faced down her fears once means Ursula can approach her new goal from a far more desirable vantage point. “Now,” she says, “I can read the newsletter on my home computer in my sweatpants while my daughter naps, instead of on my Blackberry while riding the 8:02 pm train back to the suburbs from work.” And just to underscore how excited she is to be embarking on this new chapter in her life, Ursula signed off with, “Regards from the other side.”

Remember, courage is not a matter of losing your fear so you can take action; courage comes from taking action. And that, in turn, helps you overcome your fear. When you can act despite your fears, you will be rewarded many times over. That’s because, as Anais Nin once observed, “Life shrinks or expands according to one’s courage.” Once I found the courage to escape job jail my life expanded in ways I never imagined possible. Life really is better over here on the “other side.” I encourage you to take one small step today to join those of us are enjoying the view from the other side.

Valerie Young abandoned her corporate cubicle to become the Dreamer in Residence at Changing Course, a career change website for people who want be their own boss and work at what they love. Her career tips have been cited in The Wall Street Journal, USA Today, Woman’s Day, MSN, CareerBuilder, and iVillage. Go to http://ChangingCourse.com/work.htm for a free report on how you can make a career change that gives you the freedom to do work you love.

If you’ve done the calculations, you know that virtually any salaried job that you can do will never make you rich. No matter how high the salary is, you will always have a finite amount of income and it will always seem as thought it’s not enough if you are living in a consumer society.

Every raise that you get in your salaried income will be just about accounted for before you even get it; as life naturally gets more and more expensive, you will find the raises in an already-high salary to never be enough. No, the key to how to make money is to not define making money as having a high salary. The key to really making money is to make money in lump sums. Whether that means commissions or it means creating something and then turning around and selling it, these lump sums are the secret inside how to make money.

Take a business entrepreneur as an example. Someone who starts a small business that is bound to be a huge success will be able to sell the business for much more than the business was created for. Even if you throw in all the time one spends developing such a business, it will always be the case that the business sells for more than the amount you put into it.

Of course, this is only true for the most successful and ingenious of businesses. Certainly, starting a business offers absolutely no guarantee of making money, and in most situations, you won’t make much money. However, if you make the right business at the right time, and accept an offer to purchase the business when it comes at the right price, you will be among the group who really know how to make money.

Teenager Ashley Qualls is a good example of such an entrepreneur. Ashley created a business with $8 only a few years ago and has since turned down several offers she’s had from those looking to purchase the business for more than a million. She hasn’t sold it; she’s interested in running the business, not in making money off her idea to start it in the first place. The essence of how to make money in this way is to be a ruthless entrepreneur.

The best entrepreneurs know how to make money and they are notoriously good at choosing the right moments to start businesses and to sell them. If you think you have an amazing idea, don’t wait too long before you start developing it; someone else is bound to come up with the same idea sooner or later and they will be the one making money off it if you don’t act on the idea early.

This is an important secret in how to make money: the best entrepreneurs follow their gut feelings about businesses and situations. Try your hand at it where the stakes are low and if it looks like your intuitions are good, you can slowly make your way up to larger transactions and higher stakes. If your intuitions are good, you’ll be advising people on how to make money as an entrepreneur in no time!

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