Non-Recurring Expenses and the Sale of Your Business

Sale of Your Business

Non-Recurring Expenses and the Sale of Your Business

When preparing to bring your business to market for sale, preparation is essential and unavoidable. One of the tasks that must be accomplished is valuing your business, which involves intense analysis and documentation of all assets, liabilities, and expenses. In particular, one issue that must be considered are the non-recurring expense incurred by your business.

A company’s non-recurring expenses are those which are not accrued annually, as they are one-time purchases, usually in the form of capital expenses. Office equipment, such as computers, occasionally stops functioning and needs to be replaced, as one example. Another form in which non-recurring expenses manifests is what is referred to as “extraordinary” expenses. These are incurred not as often when compared to capital expenses yet are still enough of a reality that they must be considered by any business owner. For example, tax penalties that are accrued due to late payment are a common extraordinary expense that, unfortunately, businesses must anticipate as a possibility.

These are expenses that are not at the forefront of a business owners day-to-day work life, and sometimes they can be overlooked when valuing a business. This is why it is best to get a professional broker to help you analyze your business expenses down to the last penny.Contact Moshe Hazout at Transworld Business Advisors today!