A common misunderstanding held by businesses, whether old or new, is that they are not able to benefit from the savings in costs coordinated by a customs broker. They feel that they may need to make over $5 Million in revenue in order to receive such benefits and that smaller businesses do not need such a broker.
There are small businesses that apply classification of tariffs seeing it as a customs value and develop contracts that allow for sales to start coming in. Next, a small error in the form of a classification of tariffs may become a bigger problem when larger volumes take over, and there are larger volume transactions taking place across the border.
Where the business is new, it is important to be careful where not using a customs broker. Even though a person may wish to interact with customs authorities directly, it is advised that a customs broker is approached and asked for advice. This is especially true in the initial planning stages of a business to assist in eliminating risks in relation to the business, which is cross-border in nature. If you’re putting your business up for sale in Houston and moving to another country, this blog will prove to be a fascinating read.
How you can add value with a custom broker
- Update customs clearing process
- Make sure that documentation for customs is prepared in an adequate manner
- Figure out the classification of tariffs
- Understand whether your commodity will be allowed
- Making sure that the right duties and taxes are applied to shipments
- Identify whether your commodity is regulated through any other agency or government department
- Understand whether any exemptions apply on the commodity
- Assistance in execution of vendor contracts
In the event a customs broker is not used to conduct business activities as an agent on your behalf, it is vital to understand that during the planning stages, customs brokers can be useful by:
- Insightful advice provided concerning terms
- Origin country sourcing recommendations provided
- Tariff classification and type of entry suggestions and advice given
- Compliance and decision making process assistance
- Providing the best solutions
- Increasing competitive worth
Thus, a customs broker should be consulted with when in the planning stages. This will allow for a variety of benefits to be gained, as have been noted above and will also allow for risk to be identified and mitigated appropriately.
At TruView Business Advisors, we’re constantly offering advisory services. As a major business broker in Houston, we aim to solve problems and engage with a huge number of small, medium, and large businesses. Contact us now to know more!Read More
At TruView Business Advisors, we have years of experience in helping business owners build and sell their businesses. So we’re well aware of what owners have to do to amplify their business value. If you’re putting your business up for sale in Houston, here are some basic questions you should ask.
Are profits being maximized?
A basic problem that is inescapable is that businesses are sold for many different reasons, at the head of which lies profit. Thus, conducting an analysis of various aspects of the business to be able to maximize profits is a crucial area to be focused on. Famous quotations made by the United Kingdom’s team of cyclists ‘gaining the most profit from a business is pretty much the same idea.’
How well is the business run?
Do you possess procedures that customers can view exhibiting how well run the business is? When businesses grow, they end up growing more than the process of management. Factors of the business that need focus upon include people processes, IT systems, Sales pipeline management, management accounts, and more. Further questions to ask include whether or not tax affairs are kept up to date, along with bureaucratic matters and customer contracts.
What is the owner’s role?
If the value of a business is dependent solely upon the intelligence of its owner, then this factor is a disadvantage for the business when being sold. Although the owner does drive and direct the business, they do not have to do everything. Delegation is important, and owners must delegate responsibility to certain key employees in a controlled manner. They must also make sure the processes of management are strong enough to let the process occur flawlessly. One specific area we focus on with our clients is being able to understand how best to delegate responsibility to, such as their top employees. Controls must exist to make sure owners are kept in the loop concerning any problems
How good is the quality of your sales revenues?
For the most part, customer revenues are being invested in by buyers, and they value two basic things. These include a variety of customers and whether revenues recur through maintenance and service contracts, amongst other means, a large part, buyers are investing in your customer revenues. Customers value strong customer relationships, and this is important to understand.
Is it important to have an exit plan?
Yes, ensuring that your business is prepared for sale is very crucial when the thought of selling it comes to mind. Ensure that you give yourself at least 3-4 years to reach the best position for the business, allowing you to make necessary “repairs.” This allows owners to focus on their business and not just in dealing with the daily hustle bustle they normally go through. An important thing to understand is that more time must be spent on the business as opposed to just in the business. This means that owners will focus on business matters that will truly improve their business and allow them to gain a hefty profit when selling their business.
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