Florida Business Valuations

122% IRR on Real Estate Tax VAB

Valuation Adjustment Board Hearings are the place you go to negotiate your real estate tax bill in Florida. Each county has a hearing officer who will listen to the evidence proffered by the tax assessor and the tax payer. Historically, the burden of proof was upon the tax payer to disprove the value arrived at by the tax assessor. This changed a couple of years ago.

I chose to hire a very accomplished real estate attorney who is also a hearing officer in a county in which we do not own property. She was able to negotiate with the tax assessor to reduce my tax burden by $575 per year. The cost was a modest $250 up front and a contingency fee of 35% of the tax savings. In my case, the total cost was $474.

This equates to a 121% IRR and is the most profitable investment I made in all of 2011.

If you own property, I highly recommend you look at your tax bill and ask yourself, “Is the tax assessment truly what I would expect to receive if I had sold on January 1 of the year in which the taxes are levied.” If not, seek professional help.

When is the right time to sell my business?

Every business owner wrestles with the dilemma, "When is the right time to sell my business?" The right time to sell is when you have a compelling reason to put your equity into a new venture. It could be in safe annuities if you have reached your magic net worth figure. It is more probably going to be allocated (hopefully not all of it) in your next venture.

Until you have a compelling reason to sell, do not get talked into going to market prematurely. Meet with your exit strategist. Review your anticipated proceeds expectations. Take into consideration where you want to be in three years or even next year. Too many sellers are on the market due to fear of loss without knowing what they are going to do next. Many of the businesses on the market will not sell or if it does, will take much longer than the typical six months, because the fear of the unknown will compel the seller to poison-pill any deal without knowing why they are doing so. I have seen this too many times as an intermediary.

"When should I sell my business?" Whenever you have a compelling reason to execute your exit plan. Sometimes, it will be opportunistic. If a potential buyer approaches you with an offer you can't refuse, and you already have developed an exit strategy, be flexible. If your plan is accelerated by outside influence it could be providence.