At many levels of the economy, there are several things entrepreneurs and financiers should be conscious of as the country continues its recovery. This was the theme of the several speakers who addressed businessmen and women on Tuesday, October 2 at an economist breakfast at Citi Tower in Long Island City. The talk featured economists and lawyers who outlined where the economy was and what businesses can expect over the next few years.
With many people taking the initiative and starting their own businesses, there are some things they should be mindful of, according to business attorney John Rogers.
“There are a lot of things that are within your control as a business owner so you maintain and maximize your value as a [proprietor].”
There are three specific items small business owners should consider when setting up shop: succession, selling and business divorce.
Selling a small or midsized business could take anywhere from a year to 18 months, said Rogers — a partner at Herrick, Feinstein, LLP. He recommended business owners surround themselves with a good team, including a lawyer and a financial advisor.
“When you sell your company, you’ll sell it at a premium hopefully,” Rogers told the audience.
Business partnerships, though normally based on friendship or a shared goal, might not always work out for a variety of reasons. When partners start their business, Rogers said, they might not expect to one day split for any reason. The result: a split that could take months more than anticipated.
“When people come together to form a company, they really don’t think about what happens if they need to part ways,” Rogers said. “The reality is that most formation organizations are not facing the issues.”
Dana Peterson, a Citigroup economist, offered a wide-scale view on where the market is and the hurdles it faces moving forward.
The fiscal cliff — the common term given to the series of tax and spending laws set to go into effect December 31, 2012, unless a divided Congress acts — could toss the country back into a recession similar to, if not worse than, the 2008 crumble.
“Clearly if you go over the cliff, it’s extremely devastating,” Peterson said.
Because the government is planning to hike taxes and cut spending at the same time, the country’s slow economic recovery could backtrack and slip into a 3.4 percent decline and the impact would be immediate, Peterson said. The nation’s credit rating would also be lowered once again.
The upcoming presidential election would be a major factor in determining if the economy will fall off the fiscal cliff.
Politicians need to look at the long-term effects of a solution to stop from going over the cliff, Peterson said, as some in Washington want a quick fix with the future to be dealt with later.
“The best case scenario is everyone sits down and discusses what needs to be done,” she said.