One of the most interesting discoveries we have made as consultants and agents in small business acquisitions is that the advantages of small business ownership are not widely understood. For example, it comes as a great surprise to some, that Congress has blessed the small business owner with a great deal of tax shelter in various forms.
For those who are constitutionally suited to small business ownership, the freedom and independence involved are even greater rewards that anticipated.
Because so few people understand how important the advantages of small business ownership can be when an acquisition is properly designed, this outline will be a helpful starting point.
- Those who value their independence will find plenty of it in small business. They will have no one to answer but themselves. They will be completely responsible for workin ghours and conditions and for the success of failure of the enterprise.The small business owner has virtually unlimited freedom of choice to grow or stay small, change businesses, determine hours, products, services and organization, etc. Those who are well-suited to small business ownership often consider this the most important reward it offers.
- The business owner will experience a much broader degree of business and management activities than it is possible to find in most careers. He or she will not be confined to a single management or job activity. This can lead to a far more complete understanding and knowledge of business processes.
- The rewards will be directly tied to performance. A business owner will not be competing wiht others in the same organization or be required to work for someone else's goals.
- One can earn an unlimited amount of money if sufficiently capable and committed. Conversely, one can lose everything of not up to the challenge involved.
- A small business can offer an unlimited opportunity for creative talents of the owners. Small business ownership can be an ideal existence for people with talent and creative abilities.
- It is possible to make a small business a family operation for those who wish to be clsoer tot heir families. Under good circumstances it can be an ideal learning and working environment for young people who are given the opportunity to participate. Conversely, those who do not wish continuous associations in work in addition to home life are well-advised to avoid the pressures a small business can create.
- A small business is probably the best legal tax shelter in existence. Extensive benefits and tax write-offs can be built into a small business operation, particularly when the real estate is owned. Small business owners rarely have to pay substantial taxes until they are earning a substantial amount of money and enjoying an abundant life-style. Special benefits can include subsidized living expenses and shelter, transportation, entertainment, company insurance, medical benefits and many others.
- A small business with real estate assets and responsive management can be virtually inflation-proof.
- A well-run small business can be an even better estate builder than residential or income real estate. With the demand for small business growing and a scarcity of attractive, profitable ones, many owners find themselves with a much greater net worth than they would have had in traditional careers.
- A great deal of assistance (far more than most people realize) is available for those wanting to consider small business ownership. A wealth of outstanding information, manuals, industry data, management assistance, courses and helpful organizations make the risk far lower and the rewards far higher than most people believe it will be.
- Small business ownership has an increasing status as the institutional structure of society faces change and challenge. Even small businesses that were once considered routine or unexciting are now commanding great respect as the attractions of small business ownership become more widely recognized.
- It appears that the small business sector of our country is now growing far more rapidly than big business.
- Those with good basic management training will usually find a major competitive advantage over most competitors. Trained corporate managers often find that their planning, marketing, operating and/or organizational skills give them a major competitive edge. The required skills can be learned and developed by anyone with determination and normal intelligence.
- Many families are able to get a large amount of equity to buy a business as a result of the steep inflation in residential housing in the last twenty years. This equity earns nothing intil it is liquidated; by investing it in the earning assets of a small business, a substantial earning power can often be generated.
- One is free to choose, within limits, the environment and area that is most pleasing and healthy, entirely according to one's own value system. Those who find their present area of work a problem will have no such restrictions in choosing a small business. Similarly, the small business owner is free to conduct his or her business activities entirely according to personal ethics and values.
