You can make money from a business in two ways : by running it for income, and by selling it. Today we look at the selling option.

This year, some 700,000 American businesses will be sold. Most will be small and mid-sized businesses like yours. If you, too, are thinking of selling, consider these practical steps for making the process go smoothly.

* Determine a Realistic Price Range
* Understand the Tax Consequences
* Prepare for a Sale
* Seek Potential Buyers
* Negotiate Your Deal
* Sign a Sales Agreement
* Plan for the Closing
* File Paperwork With the IRS

Getting the Cash Out of your Business Note
Business notes, known more specifically as seller carryback business notes, are created when the buyer of a business can not or will not pay all cash. Frequently, banks and similar lending institutions are hesitant to loan money to new business owners who have minimal track records and where hard assets make up a small percentage of the total purchase price.

In the case where a buyer cannot obtain a loan, the seller is left with two choices (1) hold off until he/she find a buyer who can pay all cash or (2) carry back a note in order to collect future payments. The first option is often not realistic. In the second case, the seller is hopefully able to at least extract a large down payment to make extra sure that the buyer has some “skin in the game”. However, even then the seller is usually in a position that he prefers not to be in – he has no lump sum of money to either invest in other opportunities or to retire. Unlike a real estate note, where is there is a hard asset that is fairly easy to appraise; the business note is relatively risky to hold.

So, what is a business seller to do when he didn’t want to be in the lending business to start with and now has a need for immediate cash? What many people don’t realize is that the business note can be sold. The former owner can sell all or part of the note to get a lump sum of cash. In this way, both the goals of selling the business and getting the cash out of it are met.

In summary, selling a business note is an excellent way for the former owner of a business to get his cash out of the business. Whether the reason for selling the note is that the seller would have preferred all cash all along, that he now has large debts to pay, or that he has the opportunity to pursue other investments, the sale of a business note is a tool of which you should always be aware.

Our guest author, Afra AmirSanjari, is the Principal for Peacock Capital. Peacock Capital specializes in solving the cash flow challenges of Small/Medium Businesses, Government Vendors and Individuals with innovative financial solutions by providing a network for securing operating capital.

http://www.peacockcapital.com

The Money Blog has no financial holdings in Peacock Capital, nor knowledge of its affairs.

Writing in The Times (London) today, Anatole Kaletsky reminds us that “the financial hurricane season” is now upon us.

“Nearly all the greatest financial accidents — the Wall Street crashes of 1929 and 1987, Nixon’s closure of the Bretton Woods gold window in 1971, the Asian currency crisis of 1997, the Mexican and Russian defaults, the attack on the French franc in 1993, the sterling devaluations of 1949, 1976 and 1992 — have occurred between late August and October”.

On Wall Street buyers generally hold off until Hallowe’en, on October 31, while selling is automatic for various reasons: “…selling of equities is partly a passive phenomenon, since portfolios have to be liquidated when their owners die or cash retirement cheques or make insurance claims.

“These liquidations happen steadily through the year, regardless of seasons. Buying, on the other hand, requires conscious decisions and investors are less likely to make these when they and their brokers are away on holiday.”

So the next couple of months will be crucial for financial markets. Have yourself a safe financial hurricane season.

If you’re looking for an alternative to the usual lenders out there, or would like to lend yourself, Zopa may be for you.

Zopa is UK-based and is said to be the financial equivalent of eBay. It puts borrowers and lenders directly in touch with one another.

Zopa has a very good management pedigree, it was created by the team that setup Egg, an online bank associated with the Abbey.

Pamela Atherton of the Telegraph writes: “Zopa was launched in March 2005, and has approximately 90,000 members. Sixty-three per cent are borrowers and 37 per cent lenders, with about 50 per cent of active lenders having already added to their original lending outlay. Zopa is coy about providing specific lending figures but insists that millions of pounds have been transacted since the launch, involving thousands of lenders and borrowers, and that more than 5,000 new members are being signed up each month.”

Another string to yet another financial bow.

How best to invest your cash in the UK is always a tricky problem, especially if you don’t have specialist knowledge.

Here are a few pointers that may help :

* Check out the internet-only accounts, which often pay the highest rates.
* You can put £3000 ($5640) in a cash Isa account every tax year. Interest, which is currently over 5pc, is tax-free.
* Some accounts offer guarantees — e.g. Investec’s Hi 5.
* National Saving’s index-linked certificates are definitely worth considering if you pay higher-rate tax.
* Spread money over several accounts. If you opt for a one-year account for some of your savings, you could earn 5.5pc or even more.
* You should be able to earn at least 5pc at today’s rates. Don’t settle for less. Monthly-paying accounts pay around 4.75pc.
* Less fashionable banks sometimes pay more. You can check if an institution is registered here: fsa.gov.uk/consumer.

Finally, be aware of rate changes and read the financial press.