Vol. 3   Issue 4 - April 2011  www.cannonfinancial.com

Planning Ideas - ESOPs Continue to Offer Significant Benefits

Main Content Inline Small   Employee Stock Ownership Plans (ESOPs) can be tax-efficient vehicles not only for incenting employees, but also for transitioning a closely held business from a current owner to management. ESOPs are not for everyone, but with the right set of facts—a majority owner looking to cash out and leave the business in the hands of an able management team—ESOPs are hard to beat. The key to being in on the play is your ability to articulate the benefits and requirements associated with ESOPs.

   An ESOP is a qualified profit-sharing plan that must invest primarily in employer securities. Like other defined contribution plans, the maximum employer contributions are deductible to the company, but are limited to 25 percent of total payroll and, in addition, there is a limit on the maximum contribution that can be made on behalf of an individual employee. Read more


Practice Management - Niche Marketing: The Why and How in a Nutshell - Part 2

Main Content Inline Small   As pointed out in last month’s article on niche marketing, while large firms have the depth and breadth of resources to be “everything to everybody,” individual advisors, by definition, have limited resources: their individual time and energy. If profitability of an Advisor’s practice is measured as the net revenue generated per defined period (hour, day, week, etc.), the key to greater profitability lies in maximizing efficiency of operation.

   And that’s where a niche marketing strategy comes into play. By focusing on a selected niche or niches, an Advisor should be able to minimize the time and energy devoted to client acquisition, shorten the sales cycle, and eliminate the competition.

   As complicated as niche marketing may sound, for Advisors it often translates into the following steps: Identify potential niches, Validate those niches, Plan to access prospects in your selected niche(s), Execute strategies and tactics for accessing prospects, and Streamline your practice to deliver the products and services clients in your niche(s) want to buy. Read More


Taxes - Selling a Business: Deal Structure Matters - Part 2

Main Content Inline Small   Last month’s Tax article discussed the importance of being able to have a conversation with your business owner clients about selling the business. Valuation is likely to top your clients’ list of concerns, but deal structure can be just as important. M&A deal structure takes three common forms: Asset Sale, Stock Sale, and Statutory merger or consolidation.

    From the buyer’s perspective, the overriding tax issue is whether the acquiring company receives a stepped-up basis in the target company’s assets for depreciation purposes.From the seller’s perspective, the overriding issue is whether the transaction results in current taxation. Read more