When you’re a business owner, the end of the year tends to look a little different for you than for the rest of the world. While others focus on the changing weather, upcoming holidays, visiting with loved ones, and eating comforting meals, you’re more likely to be crunching numbers, meeting with your accountant, and balancing an annual budget.
Balancing Your Business Financials
There’s nothing quite like the end of a calendar year, and in business, you need to make this time of the year work for you. With your accountant or accounting firm handling your financials, they’ll help you break as even as possible. When the clock strikes midnight on New Year’s Eve, you likely already know whether this year was a profit, a loss, or an even break.
Tax Returns and Selling Your Business
When you’re interested in selling a business, your tax returns become an indicator of the success of your business. In fact, if you’re thinking about selling your business in the next three years, having a tax return that shows a profit margin is a very valuable thing. That profit margin becomes an indisputable truth that your business is experiencing financial success, which appeals to potential buyers. If your tax returns show a profit, two very specific things happen:
You’ll pay taxes on that profit
You’ll be in a better position for marketing and selling your business
Business Financials and Selling a Business
As the end of the year approaches, keep your big-picture business goals in mind. If you’re looking to sell, realizing a profit on your returns could be seen as a benefit throughout the selling process. If and when you decide to sell your business, let your accountant know your intentions. This way, they can help you position your business financials in a way that will be helpful at the time of sale.
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