It is typical for a small business to have some ownership transfer or sale during its lifetime, and it is crucial to know the differences between selling, transferring, or closing your business, according to the Small Business Administration.
Selling a business will require a lot of work upfront to ensure that everything is in order before the sale such as legal documents, proof of ownership, and the correct valuation. During this phase, experts recommend that the owner seek out a lawyer and a qualified business appraiser. The business appraiser will consider all physical assets owned by the company as well as things like brand value, intellectual property, and the book of business or projected future earnings. Typically, they will value the company based on future revenue (income approach), comparisons to similar business sales (market approach), or a basic subtraction of all liabilities from assets (assets approach).
When transferring ownership of an LLC, the most critical factor is who the current owners are and who the future owners will be, according to LegalZoom. Typically, a transfer of ownership that isn’t an outright sale involves adding or removing members such as when bringing on a new partner, buying out an existing one, or when there is a death. When the LLC formed, especially when there are multiple parties, there should have been an operating agreement signed by everyone that outlines how such a transfer will work through the buy-sell section. This section might include the requirement to buy out shares of a departing member or stipulate that a certain party will always be the majority owner. In some states, the entire business must be dissolved and recreated any time there is a change of ownership.
The decision to close a company could stem from the desire to retire or just to quit a business that isn’t working out. All owners must agree to the closing, and there are dissolution documents required to be filed in every state to prevent future tax filing requirements. Any licenses, permits, and other business registrations will need to be cancelled and final employee checks issued. The final tax returns for the last operating year must be filed as usual to fulfill any obligations to the IRS and records should be maintained for at least three years.
There are no great solutions without big problems: Just ask Almon
“The day is coming when (telephone) wires will be laid onto houses just like water or gas. Friends will converse with each other without leaving their homes.”
In a letter to his father, Alexander Graham Bell made this prediction in 1876, before the first telephone was ever sold.
He would have been laughed at in 1876 for thinking his talking machine would be commonplace, but by the late 1880s, it was common enough to make one businessman take action.
Almon Strowger was angry. He was an undertaker in Kansas City, Kansas, and his business was beginning to flounder. He thought it might have something to do with his rival’s wife, who was an operator at the local telephone exchange.
When people called for an undertaker or even asked for him directly, Strowger believed his calls were sent to the competition.
He was forced into a period of creative thinking.
Strowger wanted to rid Kansas City, and the world, of telephone operators. By 1891 he had patented a crude but effective automatic exchange system.
His system was never installed in Kansas City, but his vision ultimately did eliminate the need for operator connections, assuring callers of more privacy and faster service.
Necessity may be the mother of invention, but pesky problems are apt to bring great solutions too.
Business experts weigh in on the question: How do we move on from coronavirus and get back to work?
Today we know every member of the workforce is extremely valuable because when we went home in March, everything fell apart.
The stock market (and our retirement savings), our incomes, companies, and a good slice of our dreams, at least in the short term. Not to mention our friends and family who suffered from the virus that has been the top of our minds.
But now that we see the end of the virus insight, what do we do?
People have different ideas.
Harvard Business Review recommends:
1 – Test every worker — Open the parking lots and make sure every person is well.
2 – Certify patients as ready to work (and not shedding virus.)
3 – Employers, retailers, restaurants, even friends, and neighbors insist on verification that each person is virus-free. Everyone maintains social distancing.
4 – States would optimize the plan.
Meanwhile, the Imperial College of London says stringent controls will be required to keep people safe.
They suggest: Impose social distancing every time admissions to intensive care units spike. Relax when they fall.
Their advice is to do this until a vaccine is discovered, possibly 18 months. So schools would close and social distancing practiced in two-month blocks, with one month off.
Meanwhile, until a vaccine is available, everyone mostly stays in quarantine, minimizing social contact.
Under this model, we just accept that restaurants, cafés, sports, gyms, theaters, malls cruises, and airlines basically shut down.
A dour existence in which we live the pandemic daily?
Not everyone is so downbeat.
Most observers think that mass testing is really the main requirement for getting back to work and social life.
In China, traffic jams and smog are back and sales of housing and cars are ticking upward, according to Foreign Policy.
One problem in China that is slowing a return to growth: People are not spending money, especially on big-ticket items. Maybe everyone everywhere is saving an emergency fund.
Administrative Professionals Week: Three gifts to show your gratitude
Every year, Administrative Professionals Week serves as a reminder to stop and appreciate the hard work and dedication of administrative professionals across the country. From April 19 to 25, show these employees that they’re valued with one or more of these gifts.
A colorful bouquet is a classic way to show your appreciation and brighten up your colleagues’ desks. Personalize the gesture by taking the time to figure out their favorite flowers or if they’d prefer potted plants.
2. Restaurant gift card
Do you often find the administrative professionals in your office eating lunch at their desks? Get them out of the office for the break they deserve with a gift card to a local restaurant. Sweeten the deal by letting them take the rest of the afternoon off.
3. Noise-canceling headphones
An administrative professional’s work environment can be hectic or noisy. However, a pair of high-quality headphones will enhance their ability to concentrate and demonstrates that you understand the importance of their work.
There are plenty of ways to say thank you to the professionals who keep your office running smoothly. The key is to make it personal. Show your gratitude by taking the time to learn more about your colleague’s interests and select a gift they’ll truly love. And a handwritten card with a thoughtful message is also a nice touch.
The Twinkie: A treat shaped by current events
The legendary Twinkie, once America’s most irresistible shortcake, started out as a toss-off product created to mark time until the strawberry season.
The maker, now known as Hostess Brands, introduced the cake in 1933 literally because they had a bunch of shortcake pans not being used. The company’s main product was a shortcake filled with strawberry cream. After the strawberry season ended, there were plenty of pans but no product — or sales.
Company vice president, James A. Dewar, decided to make a simple sponge cake and fill it with banana cream. (Legend has it that he named the confection Twinkies because he noticed a sign for Twinkie Toe Shoes.)
But current events and customer preferences intervened to change the new treat.
Bananas were rationed in World War II and banana Twinkies became hard to source. So the company whipped up a sugary vanilla flavor so beloved that banana never returned.
Twinkie sales soared throughout the 1950s, due in part to Hostess’ sponsorship of the children’s TV show, “Howdy Doody.” Twinkies made the movies, too, most notably 1984’s “Ghostbusters,” in which Egon Spengler uses a Twinkie to explain psychokinetic energy.
In 1979, Twinkies made unanticipated headlines during the trial of Dan White, who killed San Francisco Mayor George Moscone and Supervisor Harvey Milk. White’s lawyer argued that White had grown increasingly withdrawn and depressed from gorging on sugary foods, including Twinkies. The argument that White suffered from his changed eating habits helped bargain his sentence down to manslaughter. This decision soon became known as the “Twinkie Defense.”
Throughout subsequent decades, however, the product maintained its acclaim. In 1999 President Bill Clinton even included a Twinkie in the Millennium Time Capsule.
When Hostess filed for bankruptcy in 2012, devoted Twinkie fans snapped up every package they could find. Mere months later, store shelves throughout the nation brimmed with Twinkies again.
Today, the Twinkie is an authentic icon in American business history.
How one product ended an art form
For thousands of years, possibly in every culture, humans carried cloth handkerchiefs.
They were the privilege of wealthy humans. Evidence of handkerchiefs dates to 2000 BC, when wealthy Egyptians carried bleached white handkerchiefs made of expensive linen. In western culture, the handkerchief became art by the 14th century. Queens embroidered silk, lace handkerchiefs. They were carried not just for personal hygiene, but also became symbols of love, according to bonjourparis.com. Even Shakespeare wrote about them. By the early 20th century, every respectable person carried a handkerchief, many tatted by grandma.
Then, in the 1920s, the cloth handkerchief was rendered obsolete when the paper company Kimberly-Clark came up with a disposable tissue. But how could one product effectively kill thousands of years of tradition and art?
The answer is probably the flu.
From 1918 to 1920, the flu pandemic infected 500 million people around the world. At least 50 million died. Some sources say 100 million. Everyone knew people who died of the flu. People were wary of touching things. They avoided crowds and conversations.
The public suspected everything, but they especially suspected handkerchiefs. People were urged to carry them to avoid sneezing in public so they wouldn’t pass cold and flu viruses. But, didn’t that mean the viruses were in the actual handkerchief?
Kimberly-Clark’s disposable tissues were soon adopted by ordinary people. Thus, Kimberly-Clark hit on a slogan that matched the angst of the times: Don’t put a cold in your pocket. It was true that the product genuinely enhanced personal hygiene. And, that was the beginning of the end of the handkerchief.
Today, only men’s pocket squares remain as the remnants of the heyday of handkerchiefs, an art form rejected because of the flu.
The man who went from prison to CEO: The inspiring story of Roy Castro
It’s a freezing January, and Roy Castro is hosing down ice cream trucks. It can’t be pleasant. But, it was actually something of a miracle.
Just a year before in 2002, Castro walked out of prison. He was 27 years old. In prison for 15 years off and on since age 16, this time he vowed not to go back to drug dealing. That was harder than he thought.
Living with his aunt, he spent a year looking for a job. Fifty interviews later, a felon like Castro figured he was never going to get a job. He hooked up with old drug connections. Time to do what he could to support himself.
That very day, a neighbor told him about STRIVE, a program that they said could help him get a job. He reluctantly showed up and his life began to change.
STRIVE’s tough love speakers hit the audience hard on the ideas and behaviors that kept them out of the mainstream. The approach worked for Castro. The program helped attendees get a job, but more importantly taught them to keep a job. He learned how to dress and be on time. He learned humility. Teamwork. How to work in an organization.
STRIVE got him his first job and he hosed down those ice cream trucks for years while he planned how to move up. It took 10 years to climb the ranks, but he did. He followed his plan of saying yes to challenge. He took advantage of small opportunities to make them big.
By 2012 he had a $3 million ice cream delivery business and he was panicked. He didn’t know how to grow or even keep his business: Taxes, finances. He knew nothing of these things.
Once again he called on STRIVE. On the eve of Thanksgiving, he sent an email to Goldman Sachs executive Dina Powell McCormick whose card he had carried around for six years. It just so happened McCormick was in her office that late hour before the holiday. She remembered him. She immediately emailed him and pulled strings to get him a place in the company’s Ten Thousand Small Businesses educational program.
Once there, Castro saw he was over his head. So many business people with lots of experience. Then, he saw McCormick. He vowed not to let her down. He would work harder than anyone in the room. Triple hard.
The next year Castro graduated number 1 in the class. Legendary investor Warren Buffet handed him his diploma.
Using the knowledge he gained, he grew his business to $10 million a year.
An extraordinary life: A boy who at age 11 was homeless with his drug addicted mother, who went to prison at 16, became a man who made his way, overcoming all obstacles.
Roy Castro’s rules and secrets to success
From a life as a 13-year-old living on the streets to a young life in prison to the CEO of a $10 million company.
Roy Castro started at the bottom and these are his rules for getting ahead:
1 – Tame your ego. Be prepared to admit when you are wrong. Be humble.
2 – Say Yes when others say No. When you hear others refusing a task, take the task.
3 – Ask for the crumbs. A small opportunity is a chance to create big opportunities.
4 – Make the sacrifice. Work as hard as you can even at simple tasks. Save money. Show up on time.
5 – Separate from the pack. Don’t be one of grumblers.
6 – Speak your truth. Admit what you don’t know. Ask for help.