How Independent Contractors affect the Sale of a Business
Our business brokers Poway represent many current and new business owners in San Diego. We know that having independent contractors can have a significant influence on your business and more so when you want to sell it. If you wish to sell fast and at maximum profit, we highly recommend that you follow the stringent regulations of working with independent contractors and hire more employees. When you contact us at So-Cal Business Brokers, we will be happy to describe how having independent contractors versus employees affects the sale of your business. Let’s first take a quick look at the effects.
Type of workers
The type of workers that a business has is the first thing our business broker Poway will look at. This is because the type of workers you have is a huge aspect that buyers consider when choosing a business to purchase. In our experience, businesses that are made up of independent contractors cause concern for buyers.
Buyers understand that owners have little control over independent contractors. This is why they prefer employees over independent contractors. An independent contractor can only be directed on what needs to be done and how it will be done. This lack of control is scary to most buyers. Buyers feel that businesses using independent employees alone are not as stable as those working with employees. With employees the owner has full control.
The first thing our team will do when you hire us is ensure the independent contractors you are working with are worth having. We will also restructure your business so that it is more attractive to buyers.
Laws and regulations
When hiring independent contractors, business owners must adhere to strict laws and regulations. Failure to follow these laws can lead to hefty fines and/or penalties. The stringent laws and regulations often cause buyers not to buy a business that is made up of independent contractors. This may lead to pre-sale liability clause that causes the seller to be liable if there were any post-sale violations.
Businesses made up of independent contractors cause lots of uncertainties for buyers. This may cause the business’ value to decrease or may even lead to the non-sale of a business. To remedy this issue, our business brokers Poway ensure that you follow all the federal/state rules and regulations. This helps instill confidence in potential buyers by letting them know your business is operating legally and will continue to thrive post-sale.
Do you need more information on working with independent contractors or advise on how to sell at maximum profit? Visit our website now and schedule a free consultation with our experienced team. We are here to help.