Regardless of your personal feelings for Donald J. Trump, you’ve got a business. Love him or hate him, it’s important to understand how his presidency will affect your business. Thinking of selling? It’s time to find out if your prospect to sell has gone up or down with him starting his term in the White House. While many factors influence if a business is ready to sell, here are two reasons that you as a business owner should keep in mind if you’re looking to sell your business under Trump.
1. Lower Personal and Possibly Business Taxes
Successfully selling a business comes with a downside: all that one-time income may push you up a tax bracket, which means higher taxes paid on the sale. Trump promises personal tax cuts across the board, but according to the Tax Policy Center (a non-partisan think tank), the top earners of more than $699,000 a year could see annual tax reductions of an average of about $215,000. This means more money would stay in your pocket during the windfall of selling your business. And with possible lower business taxes, more profit stays in your business: good for your valuation and therefore your asking price.
2. Rising Costs of Imports and Exports
Trump is currently looking to shake up how the US does business with the rest of the world, particularly with our trade partner and overseas manufacturing. If your business relies on imports or exports as a large part of its bottom line, take a hard look selling your business sooner than later. Rely on Chinese manufacturing or trade under the NAFTA or the planned TTP? You could see rising costs severely stifling your bottom line, meaning a lower asking price for your business.
If this has you thinking about selling your business in 2017, you better start the process now. Getting the proper documentation, valuation, getting your business listed, negotiating the deal, due diligence, and closing (and more!) always take more time than you expect. Get help from a business broker like George & Company to help speed the process and get the best returns. If you’re looking to sell in the Greater New England area, contact us. Regardless of who you voted for.