#actionableanalytics

AI or Artificial Intelligence combines the dual power of computing capabilities as well as human-like adaptability. It offers AI a distinct position...much better than traditional computing. In many instances, the AI can be as reliable as a human employee. Thus investing in AI can prove to be a great decision for the enterprises, especially for the start-ups and small enterprises with limited resources to spend on hiring human talent. Here are a few ways in which AI can help start-ups and small businesses to manage their business affairs confidently. Here are a few ways in which AI is helping small businesses across the world: Getting more insights out of the available data Data is rightly called the new gold for digital businesses due to the vital role it plays in recognizing the latest trends and planning better business strategies based on key insights. A growing number of progressive small businesses are actively collecting and utilizing data for improving their business potential. The problem, however, is that it is a time consuming and tedious activity and the present technologies only present the half-solution as they still require consistent human intervention for categorizing the data, presenting it incomprehensible format and most importantly analyzing it from different aspects. Expensive costs and management hassles associated with hiring data scientists or outsourcing analytical tasks like Statistical Regression Skills prevents the small businesses from harnessing the actual benefits of their data collection exercises that may defeat the very objective of such tasks. AI can offer the precise solution here due to its evolving model, better automating skills and strong analytical capabilities. By employing the advanced analytical techniques like statistical regression analysis the AI tools can deliver deeper and diverse business insights to the small businesses. It helps them in managing various aspects of their business like retaining the present customers, acquiring new clients, recognizing the actual strengths and weakness of their business model and exploring new avenues with higher possibilities. By identifying and wisely linking the diverse elements of the available data the AI can tell that how the different factors are affecting the business that allows them to take a wise decision and modify the changes for better benefits. Strengthening Human Resources Small companies lack the brand value and high packages and perks required for attracting bright talent. Due to budget and time constraints, they don’t have the privilege to dedicated an expert HR panel and implement elaborate hiring processes for deeper analysis of the candidate’s viability. They end up hiring a mediocre candidate and it results in lukewarm, static work culture. It places them in a disadvantageous position, especially when compared to their bigger counterparts. Instead of humanly wading through a high volume of resumes and selecting the best candidate the companies can delegate this entire exercise to the AI tools. It not only saves them from unnecessary stress and efforts but also promises a more rationalized ad elaborate approach while deciding the most relevant candidate for the job. l With its quick automation and well defined analytical capabilities, the AI can capably find the best candidate irrespective of the volume and diversity of the resumes. Based on its algorithm backed deep learning capabilities the AI can sift through the past hiring techniques and deeply analyzes the outcomes to pick the most fruitful HR practices. Depending upon the same it can suggest the best hiring process for selecting the right candidates that are perfectly fit for the job. It helps the HR department to concentrate efforts in the right direction and base their decision on solid analysis supported by stats and facts instead of following intuition based approach with uncertain results. Going a mile further the AI can also help the HR with other details like best places to find the ideal candidate, align their communication with the candidates’ persona to get desired outcome and accessing insights of their past work history to know about major factors like stability, professional commitment, performance, job-specific skills and overall potential of the candidate in the long term. It helps the HR team to hire the top talent that is the best fit for the job role. Independently managing petty daily tasks The employees of small businesses are generally overburdened with multitasking due to the lack of sufficient manpower strength. Their time and efforts are divided between the front end and backend operations that severely affect their performance and reduce their productivity. With its deep learning capabilities and self-evolving model, the AI can efficiently reduce the workload of the employees by independently managing miscellaneous mundane and tedious backend tasks like scheduling, basic accounting, and other petty daily activities. It allows the staff to concentrate on their key responsibilities that eventually boost their performance. Taking ownership of R&D activities Marketing research plays an essential role for small businesses and helps them to gain better traction the market. Thanks to AI the businesses no longer need to divert their manpower resources to conduct market research. AI can actively help the businesses in entire research exercises right from collecting and filtering the data to conducting deep and wholesome analysis. Conclusion AI has several distinct advantages over traditional technology. It can not only save time and efforts but more importantly, it can actively learn and evolve with the time. While the big businesses across the globe have already started employing AI technologies, it is equally beneficial for the start-ups and the small businesses. By wisely implementing AI technologies the start-ups and small businesses can gain a competitive edge without inflating their overheads. In this article, we have presented some of the major ways in which the AI can help starts and small businesses to enjoy better benefits and increase their profitability.

Articles By Jitendra Bhojwani [email protected] Expertise: Jitendra Bhojwani (Jatin) is a versatile writer who considers and respects writing as a meditative technique to get rid of negative thoughts and stress. His favorite niches include history, travel, lifestyle and technology.

Murrieta Genomics is dedicated to advancing the use of genomic sequencing

  On the episode of Business Insights Dwight Cromie talks with Jay Goth Co-Founder of  Murrieta Genomics which is dedicated to advancing the use of genomic sequencing in precision medicine, agriculture, forensics, veterinary and direct to consumer applications by offering entrepreneurs access to the specialized equipment, know-how and mentors that can transform research into the commercial enterprise. They are a true incubator, offering dedicated bench space to fledgling companies at basically zero cost, helping them to define their business model and validate their science, and then investing in the companies that “graduate” the incubator. Located in the 16,000 square foot Murrieta Innovation Center in Southern California, in close proximity to Los Angeles, San Diego, and Orange County. They welcome inquiries from researchers, entrepreneurs, scientists, investors, and business professionals who share our passion for advancing science and sparking economic development. They have established a number of partnerships with like-minded organizations from around the world. Murrieta Genomics is a member of Genomics England’s Discovery Forum. It is estimated that one in seventeen people are born with or develop a rare disease during their lifetime. At least 80% of rare diseases have an identified genetic component, with 50% of new cases of rare diseases being identified in children. However, it can take considerable time and expense between a patient first presenting at doctors and receiving an accurate diagnosis. The time taken to sequence a whole human genome has been dramatically reduced and will become more affordable for routine use as the price continues to fall. Genomics England is a company set up and owned by the UK Department of Health to run the 100,000 Genomes Project, which aims to sequence 100,000 genomes from NHS patients with a rare disease and their families, and patients with cancer. Genomics is made up of many moving parts − from the understanding and consent of the public, to truly pioneering research, to building an effective NHS infrastructure. The Discovery Forum and the industry partnerships it builds are every bit as important to the success of genomic medicine. Murrieta Genomics is a member of the Global Alliance for Genomics and Health. The Global Alliance for Genomics and Health (GA4GH) is an international, nonprofit alliance formed in 2013 to accelerate the potential of research and medicine to advance human health. Bringing together 500+ leading organizations working in healthcare, research, patient advocacy, life science, and information technology, the GA4GH community is working together to create frameworks and standards to enable the responsible, voluntary and secure sharing of genomic and health-related data. All of our work builds upon the Framework for Responsible Sharing of Genomic and Health-Related Data. GA4GH Connect is a five-year strategic plan that aims to drive uptake of standards and frameworks for genomic data sharing within the research and healthcare communities in order to enable the responsible sharing of clinical-grade genomic data by 2022. GA4GH Connect links our Work Streams with Driver Projects—real-world genomic data initiatives that help guide our development efforts and pilot our tools. Murrieta Genomics is a member of SoCalBio. Southern California Biomedical Council (SoCalBio) is a nonprofit, member-supported trade association that serves the biotech, med tech, IVD and digital health communities in the six counties that comprise the Greater Los Angeles region (Los Angeles, Orange, Ventura, Santa Barbara, Riverside, and San Bernardino). SoCalBio’s programs help local firms gain access to capital, potential partners, and other business services. The Council also promotes technology transfer and workforce training, while informing policymakers and the public at-large about the benefits of the region’s bioscience industry. SoCalBio is open to membership by firms and organizations engaged in all aspects of bioscience research, technology development, and commercialization. All of the incubator companies at Murrieta Genomics receive a complimentary membership to SoCalBio.

The day you forget you are in business for the customer is the day you start going out of business. Smart companies try to do everything they can to make things simple, easy, and convenient for their customers. One of the companies I have worked with had a motto that set the tone for every interaction they had with their customers. E Z T D B W … which stands for Easy To Do Business With. Today, (a Saturday) I went to make a deposit at my bank. There was a sign on the door that said they are no longer open on Saturdays and they will also be closing earlier during the week. If most people work until 5 p.m. and the bank closes at 4 p.m., that sure does make it hard to do business with this bank. If you put off your banking until Saturday, when most people are off, you can no longer do business with them. BUT, right across the street from my bank is Bank of America and Chase Bank, who are both open on Saturdays and they close at 6 p.m. during the week. It should be noted that both banks were extremely busy. I guess convenience is no longer important to my bank. When I see companies making decisions like this, I start to wonder about their profitability, success and stability. Their competition is offering more convenience while they are cutting back. Amazon basically destroyed Sears by offering convenience. Customers want it faster, better and on their terms. I feel any time a business decision is made, convenience for the customer needs to be paramount in the decision process. Convenience is defined as, “the state of being able to proceed with something with little effort or difficulty.” Synonyms are benefit, comfort, ease, enjoyment, satisfaction. The state or quality of being suitable (for the customer) or opportune (for the customer) needs to be thought through, because if it isn’t … you will soon be without a customer. I recently went to a new doctor and they sent me all the paperwork to fill out via email, verified my insurance and had my pharmacy info. My wait was minimal, and everything was seamless. Years ago, I would have spent 30 minutes in the doctor’s office just filling out the paperwork, but not anymore. All successful companies, regardless of industry, are paying attention to “convenience” for their customers. Are you EASY TO DO BUSINESS WITH? Are you open when customers need you open? Can you cut down on the time a transaction takes? Can you shorten the paperwork? Do you have real people I can talk to, so I can explain my problem, rather than having to send you an email and hope you will contact me back? Is your return policy complicated? Are your hold times under five minutes? When I call your company, how easy is it to navigate your phone system? No matter when I call, do I get a message that I have called at a busy time, so please call back later? Understand this: Ineffective call flow can lead to frustrated customers, terrible customer service reviews and eventual loss of business. Sometimes I wonder how some BIG companies stay in business. By the way … most of them won’t. In the next 10 years, 40% of the Fortune 500 companies will be gone. The lifespan of a Fortune 500 company 75 years ago was 50 years. Their life span today is 15 years. By 2020, the number of banks in America will shrink by 20%. There are big profits in Convenience. Remember, only one company can be the cheapest. All the others have to do something else to set them apart from their competition. One excellent place to start is with Convenience.

A "PORTFOLIO CAREER" APPROACH

In today’s rapidly changing work environment, it is important to seek ways to diversify your income. The typical corporate job has a very short life span, on average two to four years. You should always have at least one alternative source of income such as consulting, teaching a course one night a week or representing a product or service. Ultimately, it’s advisable to convert to a “portfolio career” using your core skills and experience over multiple streams of income. Consider consulting as your base work, perhaps as a part-time CFO, CMO or CTO serving several clients, and supplemented by teaching or owning a small franchise that spins off $50K or $60K annually which could be overseen by a spouse or employee. I have several clients who have purchased franchises that produce passive income. In my work with executives in transition over the past 25 years I have seen many examples of clients either consulting or choosing some of the following: Buy and own a small franchise or business Teach a course one or two nights a week Paid work as a corporate board member Write articles, a blog or even a book Play an instrument two nights a week Become a sales rep for a line of products or a service for which they have a passion Join a network marketing group Build or repair items such as in computers, furniture, crafts or autos Work as an artist, painter or sculptor The possibilities are endless! I have several pages of examples I share with my network of executives. I have been spreading the following message for many years: You are the Enterprise. Often the first “ah-ha” to getting a shot at income other than your traditional job is teaching a course one or two nights a week. This is usually the beginning of the realization that there are ways to earn money outside of your regular work. THE "GIG" ECONOMY & UNRETIREMENT It is estimated that about 20 percent of the professional workforce is working in the “gig economy” and outside of traditional work. Another contributing factor here is the rapid erosion of even professional work by machines using artificial intelligence (AI). There just will not be as many full-time, secure jobs in the future. The executives I have worked with and who are the most challenged going forward are the ones that have had a long and stable career; now out on the street at 62 without much of a network and no idea how to create a new one. I tell my clients if you are around 60 years of age and are taking care of yourself with proper diet and exercise, you will have the opportunity to work at least part-time in something you love for another 30 years. Work and health go together, and it is important to stay in the game particularly for brain health. The basic principle of brain operation is that it improves – creates more cells – when stimulated; and declines without stimulation. Once you reach 50+ years in your career it’s time to prepare for the future by getting off the corporate ladder and building out your portfolio. The latest books on fitness and health are all writing about the possibility of living a healthy life through 100 years of age. The sooner you transition to being a "free agent" the better you will be in the long run.

The Silent Killer to Business Value

Is my company operating in a comfort zone? If yes, what is this doing to my business value and possibly my personal net worth? Asking these two questions is something every executive should do frequently to ensure they avoid a silent killer of business value that could be lurking in their midst. In over 20 years as a CEO of manufacturing and service businesses, I’ve seen firsthand that a silent killer to company value, and even a private owner’s personal net worth, can be from being caught in a comfort zone. A comfort zone is defined as the “level at which one functions with ease and familiarity”. A business operating in this way is a well-oiled machine, and this business is certainly building overall value. But far too often, “ease and familiarity” is another way of saying “caught in a rut” and stale, directly hurting business value. Let’s dismiss common myths about comfort zones – • Comfort zones relate to individuals, not companies – False! We commonly hear the phrase used in reference to a person, but entire organizations can fall into the trap. • If my organization is busy, we can’t possibly be in a comfort zone – False! Businesses can be busy and even working at a hectic pace, but this can be done inside the dangers of a comfort zone. Don’t confuse motion with progress. • If my organization is in a comfort zone, leaving it will be a daunting process – False! There are basic steps that can be taken to begin to pull your organization out of a comfort zone. The cost of staying inside the comfort zone and the negative impact on your company value is far greater than the cost of stepping outside of it. Comfort Zone as a Silent Killer Why would your organization being in a comfort zone be a silent killer to your business value? Because organizations operating in comfort zones aren’t innovating, aren’t improving their efficiencies, aren’t developing their people, aren’t forging new points of competitive differentiation or strengthening the value they are delivering for customers. The lack of any or all of these things may not jump out at you which is why it’s a silent killer. And as Jack Welch, retired CEO from General Electric once said, “if the rate of change outside your organization is greater than the rate of change inside your organization, the end is in sight”. I encourage business owners and executives to think about how a future banker, investor or acquirer will assess their company one day as they certainly won’t place a premium value on your business when the comfort zone it is in is keeping progress from occurring. Anyone placing value on your business will see the symptoms of a comfort zone and will see it as a risky investment that they will either back away from or reflect their concerns in their valuation. Symptoms Your Company Is Caught in A Comfort Zone How can you determine if your company is operating in a comfort zone? Sometimes the comfort zone is specific to a department (ie: Sales, Operations, Marketing) and other times it permeates across an entire organization. But like any malady, symptoms will be apparent if leadership looks close enough. And whether it’s isolated or across the enterprise, addressing it is essential to building your company value.

How To Move Your Company Out of A Comfort Zone Once you have identified your company is being held back by a comfort zone, there are multiple avenues you can take. For some, it’s a matter of taking evolutionary steps to exit the zone methodically, while others may want or need something more radical or revolutionary. The answer depends on how deeply entrenched in the comfort zone your business is, the true root cause, how deep it goes, your overall appetite for making change, and the speed at which you want to move. Regardless of which path you decide to take, it will start with the leader/leadership team of the business. The culture and the energy level of the organization starts at the top and this is where the process for exiting a comfort zone needs to be initiated. Many times, the steps toward improvement are not complex and once the root cause of the comfort zone is known, there are many options for driving change.

  My recommendation to business owners and leaders is to always use time as your friend in driving positive change for your business. No business owner or leader ever wants to work hard only to one day have regrets about the outcomes they ultimately achieved with their company. When it comes to building long term value in your business, keeping your company out of the rut of a comfort zone is one of the most important jobs you have as its leader.

It seems that everything in our daily lives is influenced by technology. Now, it seems, if we need something, we can just go buy an APP for it. As of March 2017, there are approximately 2.8 million APPS for Android users and 2.2 million for Apple users. Yes, if we need it, it would seem there will probably be an APP for it. Right? Wrong! SensorTower tracks data about mobile applications use. Below is a list of the world’s Top 10 most downloaded non-gaming apps. Apps are not just for fun or laughs … they can help run a business. Slowly, but surely, mobile applications have evolved from novelties and time-savers to tools that companies rely on day-to-day. Here are the Top 10:

All of these applications are being used in business! The top mobile apps aren't just for fun and games. They're turning out to be great productivity and communication tools at work, too. Yes, these APPS all help run a business, but they certainly don’t make a business great. People do that. I have yet to find an APP for passion, heart, ethics, courage, commitment, common sense, open mind, respect, positive attitude, strong work ethic, wisdom or good manners. The things that are really important in making people and businesses successful have NO APP. You don’t buy these. You can’t order them on a phone or get them with a simple click on a computer. They aren’t for sale. The things companies need the most ... begin and end with the things they can’t buy. We should never forget, technology is merely a tool … it takes far more than technology and innovative APPS to make a company successful. It takes AMAZING PEOPLE. For companies to be able to withstand all the difficulties of fighting off competitors, constantly changing consumer trends, and keeping fickle customers happy … they need dedicated and talented people. Your APP might bring them to your company, but if you don’t have the right people, YOU WILL FAIL. The business landscape is littered with powerful companies who thought they were invincible all because they had the latest technology. Leon Gorman, the former Chief Executive Officer of L.L.Bean once said: “Customer service is just a day in, day out, ongoing, never ending, unremitting, persevering, compassionate, type of activity.” APPS have nothing to do with that – PEOPLE DO. Never forget, your greatest asset is PEOPLE, so nurture them, encourage them, protect them, appreciate them and let them know how much you value them.

The top 3 ways to protect your assets and family in retirement

I had a friend and colleague in the financial services industry that had a saying, “the unfortunate reality of life is, few people are ‘happy, happy, happy...dead.” That pretty much always caught people off guard! But it also got their attention, which is what is was meant to do. Put another way, very few people die without some period of time in which they need assistance going about the normal activities of daily life. According to a recent, and very well documented statistic, out of 100 people...100 will die. Shocking right?! But the bigger issue we are dealing with here is what happens between “happy” and “dead.” On a more serious note, the numbers on the realities surrounding long term care are pretty daunting: According to recent stats1, 7 out of every 10 people 65 and older will need long term care. According to one of the leading long term care insurance providers in the country, over 59% of long term care claims last more than one year, and of those, the average length of time care is needed is 4.2 years. The California median cost for home care is $57,204 per year. The average cost of nursing home care is $97,368 for a “semi-private room” and $116,436 for a private room.2 Few circumstances in life will utterly drain your assets like paying for good long term care. As the old saying goes, the question isn’t “can you afford to buy a policy or plan?”, because you can’t afford not to put a plan in effect. First of all, let’s set the record straight on some common myths. Doesn’t my medical insurance cover this stuff? Nope. It doesn’t. What about Medicare or Med-Cal? Well, they may provide 1 2017 U.S. Department of Health and Human Services 10/10/2017. 2 Genworth cost of care survey, 2017 limited coverage, but only if you meet certain criteria...primarily involving impoverishing yourself. Another thing most people don’t realize is that federal law requires that states recover the money spent on people’s behalf for long term care from their estate after they pass away! Another thought some people entertain in order to put their mind at ease is that their family will take care of each other. Ok, let’s talk hard truth for a minute. Imagine your loved ones having to help you daily with dressing, washing, and using the restroom. Is that really what you would want?  If you, or anyone you know, has been through this scenario, you know how demoralizing it can be, and how much of a strain it puts on the family financially, and in just about every other way. One of the biggest reasons for planning right now how you will finance the costs of long term care is to preserve your dignity, and that of the ones you love, so that you are able to spend your final days interacting with your family in the best ways possible. So what are your options? Well, you may be surprised to find that you have more than you realize. Here’s a quick summary of the top options you should consider, along with some pros and cons to help you narrow down what makes the most sense for you: 1. Long term care insurance. This is the most straightforward method, and will usually give you the most value for your dollars in straight long term care benefits. You might also find this to be more affordable than you think. It is based on providing a set “cost per day” benefit, for a certain number of years. Another key factor that affects you premiums is your choice of “elimination period.” Think of it like a time deductible. You can typically choose from 30 days to 120 days, and sometimes more. As with all insurance, the higher the deductible, the lower the premiums. The primary downside that people see in this product is, if they die in their sleep without needing care, or of some sudden accident of extremely fast moving disease, then the money spent on this insurance is “wasted”. It has one purpose, and is purely protection, just like your auto insurance or home owner’s insurance. 2. Life insurance with an LTC rider. These days you have several life insurance carriers in California that offer a life insurance product with a “Chronic Illness Rider”, or something similar, that will allow you to use up to 100% of your death benefit to pay for long-term-caretype needs. The benefit is triggered by the same thing as long term care insurance - loss of 2 ADLs, (activities of daily living). This can be a very cost-efficient way to cover your bases, and get your dollars multi-tasking, which I strongly believe to be a key principle in wealth accumulation and protection. Some down sides would be that you may not get as great a benefit amount monthly as a straight LTC policy would provide. Also, you need to remember that if you use some or most of your breath benefit for long term care needs, this directly reduces the life insurance benefit paid to your beneficiaries. 3. Long term care annuities, or hybrid whole life policies. This is one of the newer options, and one of my personal favorites. You can typically fund a product like this will qualified or non- qualified funds. Meaning, you could roll money straight out of an IRA or 401k and into one of these without creating a taxable event. So if you have funds wasting away in a retirement account somewhere, this might be a really good option for some of those funds. Also, these products allow you to make sure that no matter what happens, be it the “happy, happy, happy...dead” scenario, or needing long term care, or needing some of the money you put into the policy for paying for life’s needs or wants, you get to “have it all”. Should you need long term care, like most people, the dollars spent on this product will buy far more in benefits than the dollars themselves would ever provide. Should to die suddenly, without needing care, the benefit pays out like life insurance to your beneficiaries. And, should you live longer and healthier than you expected, and need some of that money back out, the principle is liquid, guaranteed, and will also be credited with a typical 3-4% interest earnings annually. Pretty snazzy huh? Again, the main downside here would be that you will typically get more long term care benefits for your dollars when you purchase pure long term care insurance, as opposed to a hybrid like this. So there is some good food for thought, and hopefully, you can find renewed vigor and clarity to make up your mind to get this thing done like you have been meaning to for years. It will never be cheaper than it is today, and if you are already in your 50s, 60s, or older, chances are, you are also about as healthy as you will ever be. Waiting only costs you more, and potentially could cost you the ability to even have a choice, should an unexpected illness or injury render you uninsurable. Getting valuable protection like this can be much more affordable than you think, and you will rest much easier knowing it is in place - securing your future, protecting your loved ones and your assets - making sure you don’t end up broke in a nursing home wondering why.

Ignoring tax issues before the deal is struck is a big mistake

Many business owners put tax issues on the “back burner” when selling their companies. Ignoring tax considerations, until after the deal is struck, is a big mistake and can put you in an adverse negotiating position, even if the letter of intent (LOI) or term sheet (TS) is “nonbinding.” Sellers should not agree on any aspects of a deal until they meet with a competent tax adviser who can explain how much they will wind up with on an “after-tax” basis. Seven major tax questions should be considered before finalizing a deal. What type of entity do you use to conduct your business? Is your business is a sole proprietorship, partnership, limited liability company (“LLC”) or S corporation? These corporate structures are considered “pass-through” entities and will provide you with the most flexibility in negotiating the sale of your business. Your flexibility may be limited, however, if you conduct your business through a C corporation. The possibility of “double taxation” may arise at the corporate and shareholder levels. Is a tax-free/deferred deal possible? Most sales of businesses are completed in the form of taxable transactions. However, it may be possible to complete a transaction on a “tax-free/deferred” basis, if you exchange S corporation or C corporation stock for the corporate stock of the buyer. This assumes that the complicated tax-free reorganization provisions of the Internal Revenue Code are met. Are you selling assets or stock? It is important to know whether your deal is or can be structured as an asset or stock sale prior to agreeing to the price, terms and conditions of the transaction. In general, buyers prefer purchasing assets because (i) they can obtain a “step-up” in the basis of the assets resulting in enhanced future tax deductions, and (ii) there is little or no risk that they will assume any unknown seller liabilities. Sellers, on the other hand, wish to sell stock to obtain long-term capital gain tax treatment on the sale. A seller holding stock in a C corporation (or an S corporation subject to the 10-year, built-in gains tax rules) may be forced to sell stock because an asset sale would be subjected to a double tax at the corporate and shareholder levels. In addition, the seller is often required to give extensive representations and warranties to the buyer and to indemnify the buyer for liabilities that are not expressly assumed. How will you allocate the purchase price? When selling business assets, it is critical that sellers and buyers reach agreement on the allocation of the total purchase price to the specific assets acquired. Both buyer and seller file an IRS Form 8594 to memorialize their agreed allocation. When considering the purchase price allocation, you need to determine if you operate your business on a cash or accrual basis; then separate the assets into their various asset classes, such as: cash, accounts receivable, inventory, equipment, real property, intellectual property and other intangibles. Can earn-outs/contingency payments work for you? When a buyer and seller cannot agree on a specific purchase price, the seller and buyer may agree to an “earn-out” sale structure, and/or contingent payments. The buyer pays the seller an amount upfront and additional earn-outs or contingent payments if certain milestones are met in later years. What state and local tax issues are you facing? In addition to federal income tax, a significant state and local income tax burden may be imposed on the seller as a result of the transaction. When an asset sale is involved, taxes may be owed in those states where the company has sales, assets, or payroll, and where it has apportioned income in the past. Many states do not provide for any long-term capital gain tax rates, so a sale that qualifies for long-term capital gain taxation for federal purposes may be subject to ordinary income state rates. Stock sales are generally taxed in the seller’s state of residency even if the company conducts business in other states. Also, state sales and use taxes must be considered in any transaction. Stock transactions are usually not subject to sales, use or transfer taxes, but some states impose a stamp tax on the transfer of stock. Asset sales, on the other hand, need to be carefully analyzed to determine whether sales or use tax might apply. Should presale estate planning be considered? If one of your goals is to move a portion of the value of the business to future generations or charities, estate planning should be done at an early stage, when your company values are low (at least six months in advance of verbal negotiations and/or receipt of a TS or LOI). It may be much more difficult and expensive to simply sell the company and then attempt to move after- tax proceeds from the sale to the children, grandchildren or charities at a later date. Conclusion: Before deciding to sell your business, work with a qualified tax adviser who can help you understand the tax complexities of various sales structures. Above all, do not enter into any substantive negotiations with a buyer until you have identified the transaction structure that best minimizes your tax burden.