Why The Trump Presidency Is A Good Reason To Sell Your Business

by ExitAdvisor · 26th June 2017

Bruce Hakutizwi of BusinessesForSale.com makes a case for why tax and other changes under the Trump presidency create an ideal opportunity for the sale of your business.

The expected reductions in tax, he argues, make for the ideal scenario to minimise the tax you’re going to be paying on the biggest transaction of your life. For most business owners the sale of their business results in a large bump to their income in the year of sale. If the sale is timed to coincide with a period of particular low (or relative low) tax, there are huge savings to be made.

Bruce also argues that Trump’s trade policies, and dislike for imports, could hit some businesses harder than others. If yours is a business that’s likely to be affected by additional tariffs, for example, it may make sense to sell now rather than later. In fact, any business importing goods in large quantities, particularly from locations like China and Mexico, could come under severe price pressure.

Chief among Trump’s tax proposals is a significant slash in corporate taxes, from as high as 35 percent to 15 percent in most cases. He proposes the same for freelancers, sole proprietorships, and other entities that currently are taxed at a much higher personal income tax rate. While many companies may also experience a loss in certain tax breaks, the net result should be a marked increase in business profit across the board.

If you’re considering selling your business, increased profit means greater valuation, and therefore a higher selling price.

Read more here.

Update (July 4th, 2017): MSBN says that M&A activity is on hold awaiting Trump’s promised reforms. By contrast, M&A activity in Europe, in the first half of 2017 has “surged”, and private equity firms are struggling to find good deals.