Archive for October, 2012

Sell or Wait? Business Owners Who Want to Exit

October 19, 2012

Many variables affect the selling price of a business.  One factor which has caused company owners to retreat to the sidelines has been the economy.  But will a stronger economy necessarily increase the value of a business?  Perhaps not as much as a seller would hope.  But the advantage to riding out the economic downturn is that it may give the owner time to increase the company’s value by  strengthening its infrastructure.  Cash flow, assets and net profits are the fundamental components that create value.  Increasing the value of a business takes time and discipline.  Certainly a bad economy makes it harder to build value, but without the right systems in place prosperity will be perpetually elusive.  So the question of timing may hinge not on outside economic influence, but rather on internal framework.

How has timing affected your decision to buy or sell a business?

Advertisements

Health Care Reform-#1 Stat for Small Businesses

October 3, 2012

Don’t assume your business is not subject to the Affordable Care Act requirements because you employ less than 50 full-time people.  Part time and seasonal workers are included in the calculation and can have a material impact on the result.

Small business owners must calculate the FTE (Full Time Equivalent) number to determine if they are subject to the Affordable Care Act (ACA) provisions for Large Employers.  An employee is full time if he/she works 30 or more hours per week.  Employees who work less are part time.  For purposes of the ACA, part time employees must be included in the calculation.  Here is the formula:

# of employees who work at least 30 hours/week

PLUS

# of employees who work less than 30 hours/week,  divided by the average number of hours these employees work

An example is:

A company with 35 employees working at least 30 hours per week and 25 employees working 24 hours a week on average

35 +[ 25 x (24/30)] = 55 FTEs for purposes of the ACA.  This company is a Large Employer and must comply with the ACA.

Seasonal workers who work 120 days or more in a calendar year are added to the calculation based on the number of hours per week that they work.