4Thought Blog

Most business owners and attorneys know the basics of the business valuation process.

For example, you might know that there are three approaches to value: the cost, market and income approaches. You might even know some of the methods that fall under these approaches, including the:

• Adjusted book value,
• Excess earnings,
• Guideline public company,
• Merger and acquisition,
• Capitalization of earnings, and
• Discounted cash flow methods.

But experienced laypeople also understand that the process of valuing a business is not simply a matter of plugging numbers into these "black boxes" and having the answer spit out the other end. Instead, the valuation analyst uses professional judgment to arrive at a reasonable conclusion of value.

In many areas, residential real estate markets have surged, and some are still surging. In these sellers' markets, big home-sale gains are likely. That's great news if you're a seller — but will you owe taxes on the profit?

If you sell your principal residence for a large profit, you can potentially exclude tax (pay no federal income tax) on a certain amount of profit. Here are the basics of how to take advantage of this tax-saving opportunity.

Business activity ground to a halt in many areas during the pandemic. Fortunately, the Paycheck Protection Plan program and other relief programs rescued many small enterprises from financial crisis. If certain requirements are met, all or part of PPP loan proceeds may be forgivable — similar to a grant from the federal government.

The PPP loan program ended on May 31, 2021. Now, struggling businesses might be applying for affordable conventional loans — or negotiating more favorable terms for their existing debt. Doing so can help reduce interest expense and working capital requirements. Don't wait for lenders to make the first move. Here's how to get the optimal terms from your lender.

Most nonprofit executives are aware of the prohibition against private inurement. Generally, nonprofit directors and executives — and their family members — aren't allowed to personally benefit from their positions while putting their organization at a disadvantage.

Penalties for violating the private inurement mandate could include financial sanctions for violators and, in the rare worst-case scenario, loss of the organization's tax-exempt status.

Usually, violations involve large organizations, yet smaller charities aren't immune. But whether a nonprofit is large or small, there are three areas where private inurement violations typically occur.

Workplace safety is a top concern among manufacturers. Without taking COVID-19 into account, the National Institute for Occupational Safety and Health estimates that occupations within the manufacturing sector account for 5% of U.S. workers, yet they represent 8% of all workplace fatalities.

Unfortunately, COVID-19 has added to the safety concerns that manufacturers face. At the start of the pandemic, manufacturers scrambled to implement safety measures to minimize viral spread and comply with social distancing restrictions imposed by state and local governments. As new variants continue to emerge, manufacturers must continually review their safety protocols.

Going forward, manufacturers may need to invest in new or improved safety measures to protect workers in the new normal. Here are seven protective measures that can help improve workplace safety.

President Biden’s infrastructure plan is set to improve failing infrastructure, rebuild the economy and create new jobs.

As of this writing, the plan, which Biden originally released on March 31 as a $2 trillion capital injection over 10 years, is a $579 billion proposal that has bipartisan agreement, though Democrats have signaled the bill may only move through Congress in tandem with a larger spending and tax increase package, which they may try to pass via the reconciliation process.

Regardless of what the infrastructure plan may ultimately look like, construction companies should consider what an increase in project demand could mean for their businesses. Already, some construction companies whose balance sheets might be too small or who don’t want to take on all the risk, are striking joint ventures or partnerships to bid on large projects that are anticipated to result from the infrastructure bill.

Where your business is located, and how you use the commercial space that you have, can mean the difference between thriving and just limping along — or worse.

That fact was brought home for many business owners during the COVID-19 pandemic, when lease payments became a big financial strain, and dust was accumulating on the desks of employees working remotely.

Even with the economy bouncing back in many sectors, returning to previous uses of commercial real estate could be a big mistake. Here are some reasons why:

Many successful companies are family owned and run. And there's a good reason for it. It takes passion to run a profitable business -- especially a smaller one.

A family-owned company can benefit from the special dedication of a founder at the helm and possibly a spouse, siblings and children working alongside. But the devotion and dedication to the business also needs to apply to the company's succession plan.

Once you've worked to build a business, it's important to make sure your legacy is protected. A swift and seamless transition in ownership is one of the things to consider well before you choose to step down. But there's a critical question to ask yourself: Will family members be prepared to take the lead on the ownership team?

Here are some considerations when structuring a good succession plan for your family-owned business:

Estate planners often tout the virtues of owning property jointly — and with good reason. Joint ownership generally offers several advantages for surviving family members.

But this shouldn't be viewed as a panacea for every estate planning concern. You must also be aware of all the implications.

Payroll Protection Plan loans were a lifeline for many small business owners during the worst of the pandemic-driven economic slowdown. In total, the Small Business Administration approved nearly 12 million PPP loans, averaging $67,000.

The PPP program stopped accepting loan applications on May 31, 2021. However, you still may need to complete the requisite forms to ensure that your loan will be forgiven. You can't afford to miss the deadlines for filing this paperwork.

The most urgent deadline is for companies that received PPP loans prior to June 5, 2020. Those generally were loans with a two-year maturity. (Loans made after that date have a five-year maturity.) Borrowers need to apply for loan forgiveness within 10 months of the last day of the "covered period."