Liquidating assets pros cons
You see, it's not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out.For those of you who like to plan ahead--and for those of you who don't but should--here are the five primary exit strategies available to most entrepreneurs: The Modified Nike Maneuver: Just Take It.
I don't mean run it in the red--I mean pay yourself a huge salary, reward yourself with a gigantic bonus regardless of actual company performance, and issue a special class of shares that only you own that gives you ten times the dividends the other shareholders receive.As of August 7, 2015 the SBA Community discussion boards were discontinued.But that does not mean you can’t find great online resources to assist your small business needs.Mark Cuban's 3 ' Smart Money Moves Everyone Should Make' 9 Signs You're Successful -- Even If It Doesn't Feel Like It Not Believing His Own BS: Why Shark Tank Star Chris Sacca Wears Those Funky Embroidered Cowboy Shirts 6 Pieces of Old Tech That Sold for Big Bucks at Auction How I Made $24,000 in 4 Weeks of Cold Calling Entrepreneurs live for the struggle of launching their businesses.But one thing they often forget is that decisions made on day one can have huge implications down the road.Also, if you have other investors, taking too much can upset them.
Imagine their surprise when investors in a small business I once worked for received the company's internal loan repayment spreadsheet, showing that the business owner was pulling out bucks by paying his family exorbitant interest on loans while investor loans were repaid at rock-bottom rates over as long a time period as possible.
If you think you're in business for the lifestyle, minimize your dependence on other investors and structure the business to allow you to draw out cash as needed. Even lifestyle entrepreneurs can decide that enough is enough.
Although we frown upon these practices in public companies, in private companies, this actually isn't such a bad idea.
It's called a "lifestyle company."Rather than reinvesting money in growing your business, in lifestyle companies, you keep things small, take out a comfortable chunk, and simply live on the income. What part of 30-hour work weeks and a $5 million personal income don't you understand?
In one of my most memorable Harvard Business School moments, my fellow classmates and I asked the owner of a small, fabulously profitable manufacturing company why he didn't grow the business bigger and sell it for a gazillion dollars. "Remember, money in the wallet is no longer money in the business.
If you're in a business that must invest to grow, taking out too much money can hurt you down the road.