Do you have a buy-sell agreement? If so, does it give you the right to buy a shareholder out anytime you wish, based on a valuation methodology that keys off current revenue or profit? Well, now might be the ideal time.
For most businesses, profits are down. Revenue is down. No doubt, valuations based on profit or revenue are down. So if you’d like to increase your ownership percentage, would you like to buy when the price is high or low?
Low, of course.
So how about now?
Just food for thought. Of course, if your partners also hold this right and could buy you out at a predetermined formula price, don’t show them this article!
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2012.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
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