One of the most common ways that a small business can be disrupted is when an owner wants to sell or transfer his or her interests the company. As a result, small businesses usually restrict the transfer of ownership in their companies.
Business relationships end for many reasons, sometimes unexpectedly. It is highly probable that there will come a time when of your partners will want to sell his or her shares or interest in the company either to a third party, to the company, or the remaining owners. It is important for business owners to address these issues early on, when the owners can reach an agreement on how to structure these transactions.
The startup atmosphere in Austin, Texas is considered the best in the United States, according to Inc.com’s article on surge cities. The article cites the reasonable cost of living, loads of sunshine, well-educated people, the “Live Music Capital of the World” and the city’s fun streak as reasons people flock to Austin. The city is growing four times faster than most of Silicon Valley, drawing talent and startups from all over the country.
This article is Part 2 of a two-part series focusing on selling your business. Read part one here.
An estimated 70% of the businesses listed for sale do not close. It takes significant planning and preparation to successfully exit a business. The more transparent you are about any major business decisions, the more likely you are to build trust with a potential buyer. This can, in turn, result in obtaining a better price for your business. There is no guarantee that the right buyer will be interested in buying your business when you want to sell it, but here are some practical steps you can take to better position your business for sale.
This article is part one of a two-part series focusing on selling your business.
A record number of small businesses continue to be sold in the United States. Fifty percent of all small business owners are over 50 years old, and it is estimated that over 70% of baby-boomer entrepreneurs will either close or sell their businesses in the next 10 years. Since millennials are looking for business opportunities, and interest rates are still relatively low, now is a good time to start strategizing about how to sell.
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Many businesses choose to operate under an assumed name or a DBA, which is short for “doing business as.” This happens whenever a business operates under a name which is not identical to the official name of the entity filed with the Texas Secretary of State’s Office.
In some cases, buying a franchise can be a great alternative to starting your own business, particularly if you have limited experience running a business. The franchisor provides you with a developed way of doing business, trains you to run the business and provides ongoing guidance and assistance with operations, management and marketing matters.
However, buying a franchise does not guarantee success. You will still need to work hard, apply good management skills and serve your customers well.
The general perception is that it is expensive to work with an attorney. In an effort to save money, entrepreneurs try to handle legal matters and draft documents themselves. Often times, business owners wait until they are faced with a serious legal problem before hiring an attorney.
But legal services are a cost of doing business that may save your company money and help your business in the long run. Experienced counsel can help a small business spot and avoid legal issues before they develop into expensive problems.
Here are some examples of issues that could have been prevented by consulting a business attorney.
Demand for commercial lease space in Texas continues to be strong. According to Commercial Loan Solutions:
On March 1, 2018, Bisnow Houston reported that Texas leads the nation in commercial real estate development for warehouse/flex, including e-commerce distribution, fulfillment facilities and retail real estate. It ranks second only to California in office development.
The requirements for each state are different, but businesses that operate in another state are generally required to register as a foreign entity in that state. The term “foreign entity” refers to any company that is formed in a different state than the state where the company is conducting business.
Your company is required to register in another state if the activities it conducts in that state are considered “transacting business” in that state. Generally, businesses are considered to be transacting business in the state if they hire employees or maintain an office, store, warehouse or facility in the state.
Changing your company’s business name is a difficult task. Some common reasons why you may want to change your business name include:
If you find yourself in this situation, here’s what you need to do: