Buy-Sell Agreement Overview: Why Your Business Should Have One

Clint Weeder

Business tax planning, investment advisory services, business valuations


Every small business that hopes to extend its legacy needs to consider a buy-sell agreement. A buy-sell agreement will ensure you can protect the continuity of your business if anything happens to you or another shareholder, like disability or death. This kind of agreement removes any ambiguity in the succession plan and the owners’ exit plan and will protect the interests of employees, customers, other shareholders, their families, and the company. However, while 60% to 70% of small business owners are willing to transfer the business to their heirs, only 15% have a succession plan.

This article targets small business owners who want to avoid potential disagreements or disruptions, which can turn into expensive financial and litigation matters. We will cover crucial aspects of a buy-sell agreement, triggering events, and how to prepare a proper agreement that protects the future for you and your business.

What Is A Buy-Sell Agreement?

A buy-sell agreement is a legally binding contract between business partners that clearly define how their ownership is to be handled in case of a triggering event such as death or if they leave the company. It will help streamline the process, so you aren’t left with the confusion of how to delegate responsibilities or ownership upon a partner’s departure. The agreement is similar to a will that aims to protect the interests of each owner and their beneficiaries.

What Are The Triggering Events In A Buy-Sell Agreement?

As the name suggests, triggering events are formidable situations that no business wants to face. A buy-sell agreement acts as a cushion to prevent any repercussions on the business’ continuity should a member depart. There are five common triggering events.

1. Death

The death of a partner must be considered in a buy-sell agreement. With the agreement, the members can decide what happens to their ownership and how the ownership interest should be valued.

2. Divorce

Divorces can lead to tussles over the ownership of company shares, but buy-sell agreements can dictate how ownership interests will be handled.

3. Termination of Employment

This usually happens when an employee who has ownership in the company is discharged from their duties. A buy-sell will regulate how the employee must sell their interest without causing friction.

4. Bankruptcy

When a shareholder declares bankruptcy or insolvency, the other shareholders can stop the ownership interest from being sold to pay off debts.

5. Disability

Disability, just like death, can bring a business to a standstill. The agreement needs to define the types of disabilities to be covered and the steps to be taken when buying out a disabled partner.

Do You Need A Buy-Sell Agreement?

Every co-owned business should have a buy-sell agreement. This is in the event any of the events listed above afflicts one or more partners. If partners fail to plan for any event, the ownership may pass to a child or spouse who lacks the passion or experience in the company.

Here are reasons a business owner would want to consider obtaining a buy-sell agreement.

1. You’ll Have an Exit Plan For Your Members

A buy-sell agreement will help avoid any negative impacts on the existing relationship among members. Waiting until the last minute to start negotiating places the business in jeopardy. If a partner wants to leave the company or retire, a buy-sell agreement will lay down what will happen to ensure a smooth transition. It will also act as a binding contract, so all parties are protected in case of any bad blood during the split. The business has the power of preventing the leaving partner from further having any influence in the company once they are gone.

2. It Will Give Clear Directions About What Will Happen to a Member’s Portion if They Pass Away

Death can cause emotional turmoil, which can place the company’s ownership in the wrong hands. If something unexpected happens, you want a plan so business operations can continue normally. 

3. Ensures Job Stability for the Other Employees in the Company

The exit or death of a partner can cause confusion and a gap in management, affecting the entire organization. Your employees may panic over their job security and decide to leave or the lack of structure and leadership could cause the company to have to let go of some employees. A buy-sell agreement acts as a protection plan to help create a smooth transition of power which will provide stability for your employees as well.  A succession plan is also suitable for small organizations without adequate resources to support knowledge management programs and solid employee development.

4. Establishes a Set Value for the Different Portions 

The existence of an agreement determines how the business will value the member’s ownership interest. It helps prevent a situation in which a partner may demand more money than what the shares are worth. This clause will come into play if the remaining partner wants to purchase the exiting partner’s portion of the company.

Basics Of Crafting A Buy-Sell Agreement

Having competent advisors at your side will help to ensure you don’t overlook critical factors in the agreement.

1. The First Step Is to Decide Which Agreement Is Best for Your Situation

Usually, there are three types of agreements for an organized and fair handover of the business reins. 

  • Cross-Purchase Agreement: The exiting partner sells their shares to the remaining partners. This type of agreement is typically better for smaller businesses with only a few owners. 
  • Entity-Purchase Agreement: The exiting partner sells shares to the entity which retires the ownership interest. This works well for larger corporations and is known as a stock redemption agreement. For a partnership, it’s called liquidation of interest. 
  • Hybrid Agreement: This type of agreement is a combination of the first two. The partner has to first offer to sell their interest to the entity. If the entity declines, then they can sell to the remaining partners.

2. Draft the Agreement Early on in the Business

You should draft a buy-sell agreement as soon as possible in case a triggering event takes place. This helps establish a plan early on to ensure decisions are made while all partners are level-headed rather than when an event occurs that could influence the agreement plan later on. 

3. Be Specific

The plan should be definitive on what events can trigger the buy-sell agreement due to their unexpected nature. In addition, there should be specific rules on who can buy or sell the ownership interests and under which types of situations.

4. Specify the Valuation Method

How will the value be calculated? Seeking business valuation services will provide a comprehensive picture of your business’s actual value. The valuation considers factors like fair market value, book value, and formula approach. It’s important to note that once the valuation method is decided, it will be extremely difficult to fight the valuation in the future. You can choose to have a valuation clause that directs an expert to calculate the value of the business. Others specify their valuation methodology in the agreement.

5. Take Out Life Insurance Policies

Partners will typically take out life insurance policies on one another so that in case of an emergency, they will have the necessary funds to purchase their member’s shares. The company is the policyholder and submits premium payments and upon the death of a partner, the firm receives the life insurance death benefits. Use a life insurance calculator to estimate how much insurance you and your partners need.

6. Don’t Forget Taxes

Research the tax implications of your buy-sell agreement, as each one comes with different tax requirements. However, proceeds from life insurance are usually tax-free, which reduces the tax burden. 


Running a business has its challenges. However, it also gives a sense of accomplishment. Implementing a buy-sell agreement will help extend the life of your business in case a life-altering event takes place. If you already have an agreement in place, it’s recommended you review it every three years as your business continues to change. If you still have questions about the ins and outs of a buy-sell agreement, McMill CPAs and Advisors are here for you. Succession planning is one of our core services to enable small business owners to develop a comprehensive buy-sell agreement. Reach out to us for help in drafting your Norfolk, Nebraska small business buy-sell agreement.

Purchasing a Farm: Land Depreciation vs. Amortization

Jared Faltys

Financial planning, business tax planning, investment advisory services


Purchasing a farm may seem like a good investment opportunity. However, with further analysis, the net return is often much lower than anticipated. This typically happens because investors also view agricultural land as a stable investment. Not to worry — there are ways to immediately improve the ROI on the land through potential tax benefits. When you purchase farmland, you may be able to depreciate or amortize various aspects of the farm. 

Amortization vs. Depreciation

When purchasing farmland, you will acquire not only the land but other assets that accompany it as well. Since many of these assets will eventually deteriorate and become unusable, their cost can be expensed based on their life expectancy. Amortization and depreciation are ways to calculate the value of these assets. 


Depreciation is a way to calculate the total cost of an asset over its useful life. It is used to establish the cost of obtaining the asset compared to the income it provides. Depreciation is used for tangible assets, such as buildings, machinery, or equipment. 


Amortization is also a way to calculate the total cost of an asset over its useful life. However, amortization is used for intangible assets, unlike depreciation. Examples of intangible assets include trademarks, patents, and nutrients within the soil. 

Understanding these terms will help you during the prospecting phase of purchasing a farm, so you can be on the lookout for specific assets that you will be able to write off and gain a higher return on your investment. 

Depreciating Farm Assets

When considering a farm to purchase, you should be looking for specific structures that you file as depreciating assets to provide savings on your tax bill. Some of these structures may include fences, grain bins, farm sheds, irrigation systems, and other tools and equipment. Having the ability to write off these assets when tax season rolls around will help you offset the amount you are paying for the farm. 

Amortizing Farm Assets

Did you know that in certain instances you are able to amortize part of the physical dirt on your farmland? While uncommon, this is an approach that some choose to take and the return can be substantial. 

Overall, the general understanding of buying dirt is that you are unable to depreciate it until you sell the ground.  However, since farmland is commonly passed down throughout generations, farmers typically won’t ever see this value. 

How to Amortize Farm Assets

To amortize dirt on your land, the first step is to determine if there are more fertilizer nutrients in the ground than what is considered average. To check the levels of your land, you can hire an agronomist to collect soil samples from areas around the farm to analyze the nutrient values. 

Once you have this analysis, you can reach out to your local university’s agriculture department. Typically, they will perform studies to determine what is considered average for the embedded nutrients within their local soil. You can compare your specific dirt to the average values collected by the university to determine whether or not your land’s nutrient values are above average. If you have any values over the baseline, you can make a case that the ground can be amortized over the lifetime of those nutrients. 

McMill Can Help

Although the initial net return on farmland may not appear to be as high as you would expect, there are plenty of options to help increase your return on investment. Utilizing depreciating and amortizing assets will help you balance your return against your investment. 

McMill CPAs and Advisors are here to answer any other questions you still have about purchasing farmland. As your local experts in Norfolk, Nebraska, we can’t wait to assist you in your farming business along with other areas like tax planning, retirement planning, and risk management. Reach out to us today for more information.

3 Mistakes a College Planning Consultant Helps You Avoid

Andrew Steffensmeier

Small business preparation and planning, investment advisory services, business tax planning services


When looking for ways to protect your finances while still ensuring your children receive the best education possible, there’s no better place to start than with a college planning consultant. The truth is, there’s nothing more important than being prepared and planning for your child’s future — especially today as tuition reaches new heights. A college planning consultant can help guide you through the process and find the best plan for you and your family.

According to research provided by U.S. News, “the average cost of tuition and fees for the 2021-2022 school year is $43,775 at private colleges, $28,238 for out-of-state students at public schools and $11,631 for state residents at public colleges.” However, this number is likely to change depending on your child’s choice of school.

In the meantime, our team at McMill CPAs & Advisors is here to help small business owners and their families throughout Norfolk and Northeast Nebraska make the best decisions regarding college. Here are three mistakes a college planning consultant will help you avoid.


More often than not, families dismiss the potential for community college even though the end result is usually the same. This is because of the common misconception that community college is less valid than colleges and universities that are more expensive, and often over-priced. Despite this fallacy, community college actually provides sound education and is commonly used as a means of saving some money before transferring to a more selective four-year college. 

According to Dr. Steve Robinson and Forbes, “More four-year colleges are seeing community college transfers as an important part of their own enrollment strategies… Selective colleges and universities are realizing these [community college] students help bring greater diversity to their student communities. Community college students are also 75% more likely to graduate, once they transfer to a four-year institution.”

Beyond college acceptance, there are many advantages for your child to attend a community college for two years before transferring to a university to complete their undergraduate degree or continue studying. To name a few:

  • You/they will save money on tuition debt.
  • A great way for students to transition from high school to college at their own pace (especially if they struggled in high school).
  • Most community colleges are offering the same ‘dorm’ and college experience as four-year colleges. 
  • Smaller class sizes mean more hands-on and personalized assistance from teachers.

To save even more and help with the high-school-to-college transition, you should also consider having your child take college credit courses offered during high school.


When it comes to college, the prices can be intimidating, and it can certainly get more intimidating if your child is considering more prestigious options. For this reason, it is a big mistake to avoid discussing your child’s goals and expectations. 

We’re not saying that money and projected future income is everything because it certainly is not. Your children should pursue what they are passionate about and what really gives them joy. However, it’s still worthwhile having the projected loan-to-income talk — meaning, we want you and your children to understand that some career choices will force them to pay off more loans, some careers will result in less financial freedom, and some careers may be changing rapidly.

In fact, Consumer Finance stresses the importance of “understanding that your career choices may influence your ability to repay student loans [and] determining how much student loan debt you [can] afford based on that career’s starting salary.”

This will not only give your child an idea of what career may be more beneficial to their interest and success but will also help you plan accordingly. For insurance, if starting pay is often less than you can afford with student loan debt, starting at a community college and transferring may be the solution — allowing your child to pursue their dreams and save where possible. 


Another huge mistake to avoid is not applying for Free Application for Federal Student Aid (FAFSA). While it is particularly helpful for students who need free financial assistance, it can also be beneficial in gaining access to The Stafford (Direct Federal Loan) and is required for some scholarships. So, fill it out regardless of your financial state. 

In fact, Nerd Wallet reports that in one academic year, “1,234,249 high school graduates didn’t fill out the FAFSA. Of these grads, we calculate 648,191 of them would have been Pell-eligible.” Their analysis found that “the average amount of money left on the table per eligible high school graduate who didn’t apply was $3,583. The total amount left on the table by all such grads was $2,319,016,315.” That’s billions of available dollars that weren’t tapped into by college students. 

The truth is, families consistently leave money on the table by neglecting federal aid. FAFSA, which is one of many financial aid opportunities, is an excellent resource for students who need it. Too often it is discarded by families just because they ‘think’ they won’t be eligible and don’t apply.

The process is fairly easy and straightforward — and you can always receive assistance to make it quick and easier — so there’s no reason not to check to see if your child is eligible for benefits. More often than not, you’ll see that you get it. 


Every university and/or community college offers dozens of scholarships that many students don’t know about, and almost all of those applications are free or very affordable. It’s not all just academic-based scholarships, either. Your child doesn’t have to specialize in an academic area to reap the benefits of additional financial help from colleges and foundations.

Spend time exploring your college’s scholarship offerings and local foundations to apply for as many as you can to increase your odds. The truth is, ignoring scholarship opportunities can do more harm than good in the long run, especially since maximizing your scholarships are great for lowering your potential for student loan debt. 

What’s more, if you receive more financial aid and scholarships than your tuition, you won’t only benefit from FREE school. You can also use that additional money for big-ticket items like a new laptop, printer, books, and more!

Looking for a College Planning Consultant?

At McMill CPAs & Advisors, we know how challenging and overwhelming it can be to prepare for your child’s future education. That’s why we have been helping Northeast Nebraska residents avoid these most common mistakes, plus many more, with a college planning consultant.

Not only can consultants help you avoid big mistakes, but they have a significant amount of expertise and experience for you to tap into. Being a small business owner has its own host of challenges, don’t let your child’s education be one of them!

A Complete 10-Step Year-End Tax Planning Checklist for Your Small Business

Lynndsy Beckmann

Small business preparation and planning, investment advisory services, QuickBooks consulting


The approaching year-end signals the time to start preparing for tax season. Tax preparation and planning allow small businesses to stay ahead of the demands of tax season. For many of these businesses, year-end tax planning may be overwhelming and challenging, tempting you to procrastinate on the work that needs to be done. However, doing so would be detrimental to your success.  

Sitting down with your trusted bookkeeper or accountant will help you begin to adequately plan for tax season so you can reduce your tax liability. The following 10-step year-end tax planning checklist will help you set your small business up for success come tax season. When you need trustworthy tax preparation assistance throughout Northeast Nebraska, our team of CPAs at McMill is one call away.

1. Set Your Deadline

Before the new year arrives, you have the period from October to December to make the necessary adjustments in preparation for tax season. Establishing a timeline should prompt you to set aside time to fully prepare before the tax period arrives. It also allows you to check and recheck any problematic areas in your record-keeping, as well as review your tax planning strategies.

2. Pull Together Financial Records

Over the course of the past year, you will have compiled some relevant documentation needed to successfully complete your taxes. These documents include your income statement, which summarizes the revenue and expenses, and the balance sheet, which records your assets, liabilities, and equity. Other records may include payroll documents, bank statements, asset schedules, and inventory records.

These documents give a snapshot of your financial health throughout the year. If you’ve been keeping accurate and consistent records, it shouldn’t be too difficult to gather these statements. Don’t fret if you haven’t started yet, as you still have until December 31 to be well-armed for the coming tax period.

3. Reconcile Loan Balances to Your Balance Sheet

This adds to the total amount of liabilities that will reflect at year-end. You can request a statement from the bank showing the year-end balance to compare it to your records to ensure they match. ​​

Balance sheet reconciliation is crucial for you as a small business owner to ensure your finances are in order. It can help you:

  • Identify potential fraudulent activity
  • Catch accounting errors before it’s too late
  • Monitor transactions and ensure they are recorded properly

4. Separate Any Personal Expenses Paid From Business Accounts

The general rule of thumb is to keep personal and business transactions separate. Consistently take stock of any personal expenses that may be mixed with business expenses. This ensures you have an accurate record of allowable deductions, which reduces taxable income.

It’s also imperative you don’t lose your business records at any time. Always keep a backup of your QuickBooks accounts in a record-keeping system in case of a computer crash or any unforeseen event.

5. Compile Business Expenses

Business expenses can be treated as tax write-offs if they contribute to your business preservation. Keeping these expenses stored in one place, such as a cabinet of manual files or a software program like QuickBooks, will make year-end tax planning less hectic. 

Expense records will include costs related to mileage, out-of-pocket expenses, meal reimbursement, utilities, advertising, and rent. The IRS categorizes most business costs as deductible. There are also proposed tax breaks specifically for small businesses that will go a long way to minimize your tax burden.

6. Take Advantage of Depreciation for Asset Purchases

Assets in a business such as furniture, vehicles, computers, and office machinery attract depreciation, which reduces their value over their useful life. Depreciation is an annual allowable deduction that can be offset against the business income. 

Figuring out the depreciation of an asset can be confusing, but working with your accountant will help ease the process. You must have receipts indicating the purchase of the assets. This includes the purchase agreements for all major purchases. Typically, businesses use the straight-line method or accelerated method to calculate depreciation yearly. There’s also Section 179 and bonus depreciation which allows businesses to calculate a one-time depreciation against the total cost of a qualified asset in the year of purchase.

7. Note Ownership Changes

Sometimes a business can change ownership, which can include bringing in an additional partner or buying out a partner’s share. Any change will affect the equity, which reveals the value of the capital accounts of all owners.

If there’s any change, it’s important to notify the tax preparer. The IRS readily provides guidelines on such a matter including relevant information returns for small businesses to be ready for the tax season.

8. Summarize Estimated Tax Payments

Small businesses are among those required to make estimated tax payments per quarter.  Estimated tax payments are useful in reducing the tax liability when it’s time to file income taxes.  Provide your tax preparer a listing of your estimated payments and date paid so they can be properly accounted for to reduce your overall tax liability. 

9. Summarize Year-to-Date Investment Activity

As the current fiscal year comes to an end, you need to take time to monitor the progress of any investment activity to take advantage of tax planning opportunities. This also involves keeping track of investment activities from the start of the year to date and taking note of any tax deductions. This includes investment accounts such as IRA and 529 plans.

529 plans are not tax-deductible against federal taxes, but some states allow state deductions. It’s also important to be up to date with any employment taxes. 

10. Meet With Your CPA

As your business winds down its current year’s activities, your tax planning strategy must be in place. A CPA has the experience to summarize all the important business activities and processes to ensure you will be ready for the tax period. If you think you still need more time, the CPA can help to determine if you can obtain an extension.


This checklist should help make your tax preparation easy and boost your business’ bottom line. However, tax planning needs to be a continuous process throughout the year to minimize stress and workload as tax season approaches. Hiring a CPA will further reduce time spent on tax preparation so you can focus your energy on your business. As a small business owner in Northeast Nebraska, we know that you’re wearing many hats and tax planning is an extra burden. With our team of qualified tax professionals, we will assist you in implementing the necessary year-end tax planning checklist as the tax deadline looms. Do not hesitate to contact us today.

Business Valuation Methods for Optometrist Practices

Jared Faltys

Financial planning, business tax planning, investment advisory services


“What is my optometrist practice worth?”

This is a question we get frequently from the medical community, and optometrists are no different.  Today and in the near future, there are a large number of professionals retiring nationwide who are curious about the worth of their business.

The unfortunate part is that most optometrists don’t know what their practice is worth or don’t follow the right business valuation methods to make their practice more valuable when it comes to retirement. The value of the practice in many cases is the largest piece of the retirement nest egg. 

You may evaluate the retirement statements from month to month but don’t take the time to stop and analyze the value of the largest asset — your practice. Many times, we get the phone call from the optometrist saying, “Hey, I’m ready to retire…” and they simply haven’t thought about implementing the steps to make their practice more valuable.

Here at McMill Advisors and CPAs, we believe it takes at least two years to maximize the value and make the practice desirable to buyers. If you’re planning your retirement throughout Northeast Nebraska, take the time to plan ahead and make your practice more valuable with these tips.

  1. Focus on EBITDA

The definition of value can come in different forms. One obvious form that most buyers will use to measure is by evaluating your EBITDA. EBITDA stands for earnings before interest, taxes, depreciation, and amortization and is a comprehensive measure of a business’ worth.

Interest, taxes, depreciation, and amortization are called “add-backs.” These are numbers that are technically expenses when it comes to your tax return and financials, but they are added back to get a better understanding of cash flow. As you get closer to selling your practice, you need to look yourself in the mirror and say this three times, “I want to increase my EBITDA, I want to increase my EBITDA, I want to increase my EBITDA!” 

There are many variables that go into the valuation of practices, but EBITDA is the one that is focused on throughout negotiations. Later, I will describe why EBITDA is so important when it comes to selling the business.

  1. Compare Yourself to Your Peers

How well do you look compared to your peers? Benchmark yourself against competitors and work on the areas that need improvement. Ratios of wages to revenue, cost of goods sold to sale of goods, and profit to revenue are all good metrics to analyze compared to the industry. Your associations have great statistics to work with and you need to know how you stack up against them.

  1. Prepare to Sell Your Business

Don’t just show up and think you will sell your business overnight. It’s a preparation over time.   Determine what kind of business you have to offer for sale. There are many things a buyer will look for: 

  • Is this a mom & pop shop?
  • Is this a sole doctor’s office?
  • Is this a multi-doctor office? 

The more and more you can get away from “John/Jane Doe Optometrist Office” versus a generic name of a clinic, the better off you typically are. Buyers want to buy a franchise or an enterprise. Buyers are less likely to pay more for a mom & pop shop that is tied solely to a single doctor.

  1. Organize Your Financial House

Are your financials and tax returns easy to understand and do they both tell the same story?  Sometimes there can be a difference between the financials you use internally, to the tax return, to the information reported to the bank, depending on how information is prepared. 

We want to make sure there is consistency on reporting the operations. If there is inconsistency, then the buyers start to wonder what they’re actually buying when they don’t know for sure what the numbers are. The buyers look for consistency and they want to trust the numbers ideally over a period of three to five years.

  1. Diversify Services and Products

How many of your services are related to the elderly? How many of your services are related to families? Are you a practice known for a certain area or are you well-diversified across the community? Do you take on all insurances? Do you take on some insurances that aren’t profitable? Are you taking on Medicaid patients? All of these questions should also be factored into the valuation of your practice.

  1. Consider Your Internal Infrastructure and Climate

Do you have the personnel to run the business without much oversight and are there talents within the clinic that can be utilized for a buyer that might be attractive? These talents may include a billing specialist, a frame specialist, a lab specialist, and so forth. Having these additional weapons at your disposal can make your practice more valuable.

Diving Into EBITDA

Now that you have the various items that buyers look at, let’s talk about the term EBITDA and why that is so important. 

EBITDA is the typical measurement of the success of the organization from year to year. Buyers will typically want three to five years of history to see what the overall trend of the business is and if it’s trending upward. 

They look for variances and relationships between some key areas, including:

  • If cost goods go up on frames, why did that happen if sales didn’t go up?
  • What is your gross profit margin? Has it stayed the same?
  • Based on the industry, how do your wages compare to your overall gross sales?
  • How does your cost of goods sold compare to merchandise sales, and how does that compare to the industry standards?
  • How does the bottom line compare to the industry standards? Is it in the range of roughly around 13-16% of revenue? 
  • What are you paying your doctors? Is it around 17-20% of overall production? 

You want to set yourself to become profitable, as much as you can, before the sale so that you show a trend of profitability.  It is also ideal if you meet or exceed industry benchmarks. 

Breaking Down Multiples

Once the numbers are compared to the benchmarks, the industry, other similar practices, then EBITDA tends to come into play to where a “multiple” is applied. What I refer to as the multiple is a runway of time. This is the amount a buyer is willing to pay for a business based on EBITDA, typically anywhere from two to nine times EBITDA, as the multiple. 

What that really means is the buyer is willing to pay two to nine years worth of earnings (or cash flow) that the company has historically generated. The obvious statement would be the higher the multiple, the more runway a doctor gets for the value of the clinic. 

The easiest and the most widely used valuation method is the multiple of EBITDA. As you generate higher cash flow, then the multiple goes up to where it is more attractive for larger clinics to acquire.  Whether it’s strategic that they want that location in a specified area, it’s a nice product mix that fits their offering, or they are going after an overall large EBITDA to blend into their operations these are all factors that come into play. 

Why Are You Selling? 

Once all of this is determined, the seller needs to step back and ask the question, “Why am I selling?” If it’s for retirement, then it’s an obvious reason — you’ve worked hard and want to enjoy the fruits of your labor.  If you’re looking at getting a high price tag or a high multiple, I would ask the questions, “Are you still having fun at your job?” or “Do you think the future of your industry is positive, the future of your business in your location is promising, and you can continue to keep growing the practice?” 

If you’re still having fun or if you still feel that the future of your company is extremely positive, then I want you to take a step back and just do a soul search to determine if this is the right decision of going down the road of merging with a practice or selling.

When you do sell out and after you receive those funds, what do you do next mentally and physically?  That’s what you must answer before you go down the road of selling the business. You must understand that once that money hits your account, you will have some form of loss of control.

Control of a company will exchange hands. There could be a consolidation of operations and you must understand that there may be long-term employees that no longer are employed after day one when the new clinic is formed. Will you be able to serve patients and for how long?

If you did a soul search and you like the looks of that future — having money in hand without the risk of ownership — then maybe that fits you. Or you can exit the industry entirely and do something else with your life. I think business owners that want to sell never sit down and think, “Yeah, the money is nice, but what is my next step in life?” That’s the biggest thing that gets missed and it’s the decision that should have the largest amount of time spent before being made.

What’s Next? 

To conclude, start getting your ducks in a row. Prepare your practice for sale by getting your finances in order, setting up more of a clinic atmosphere, a solid positive culture, and a business that can run without you making daily decisions. That is what is attractive to a buyer. All of this doesn’t happen overnight. You must start planning for the exit of yourself out of a business and start asking these questions earlier rather than later.

I think Warren Buffet said it best when he said, “Valuing a business is part art and part science.” The science is just looking at the pure numbers, whether it’s a calculation of the EBITDA, looking at the value of the assets, or looking at the hard data.

Where the art comes into play is all the intangibles, like I described above — location, culture, staff in place, multi-doctor clinic/single-doctor clinic, type of revenue, insurance or private pay, the volume of frames and other incidentals being sold to patients, or the average age of patients and how this plays into the buyer’s desires.

When you’re looking to understand business valuation methods, it can be for various reasons. Regardless of the reason you’re selling, the main point remains the same —  getting a proper valuation of your practice can provide the knowledge of what it takes to make your practice more valuable over time.

There really is no hurry, as you should remember that the value of this business will always be there in some fashion. There is talk lately with all of the stimulus money and additional money out there, that it is assisting other clinics in acquiring businesses. 

With low capital gain rates and low interest rates, it’s the perfect environment to sell. I’m here to say that that is probably all true, but it’s not the perfect time to sell if you’re mentally not ready, if you’re still having fun, or if you don’t want to lose control.

Take a deep breath, take your time, and know that this is the most important asset in your financial picture and you need to do it right. If you have questions about this article or want to talk further on how this can apply to your practice in Northeast Nebraska, give us a call.

How Will the Proposed Biden Tax Plan Affect Nebraska Business Owners?

Andrew Steffensmeier

Small business preparation and planning, investment advisory services, business tax planning services


As a small business owner, you have spent countless days worrying about your business as you grow it from the ground up. You’ve also likely faced the devastating effects of COVID-19 for almost two years now. 

As you focus your time and energy on growing your revenues, growing a team, and working on your personal goals, the current proposed Biden tax plan may be far from your mind. 

However, the plan is a response to the damaging effects of the pandemic, particularly on families and small businesses. The key purpose of the plan is to impose high taxes on wealthy individuals and large firms to level the playing field for small businesses. It’s also a form of poverty reduction program which may benefit your family. 

Admittedly, the proposed changes can be tough to navigate, especially as a small business owner. Here at McMill CPAs & Advisors, we’re here to help small business owners throughout Northeast Nebraska understand exactly how the proposed changes could impact them.

What’s Included in the Proposed Biden Tax Plan? 

Biden’s proposed tax plan entails tax proposals under the American Jobs Plan and the American Families Plan. In addition, the administration is involved in making changes to individual taxes that affect income-earning individuals. 

The American Jobs Plan 

This is a proposal by President Biden put forward on March 31, 2021, aiming to allocate $2.3 trillion towards the country’s physical infrastructure and job opportunities for the next 8 years. The effect is an increase in taxes on corporate profits involving a higher corporate income tax.

The proposed major changes are as follows:

  • C corporations will now be subject to a statutory tax rate increase from 21% to 28%.
  • Companies reporting over $2 billion in net income will be subject to a 15% minimum tax on corporate book income.
  • Multinational corporations will face an increase in taxes from 10.5% to 21%.
  • Removal of special tax treatments for fossil fuel companies.
  • Minimizing tax loopholes that U.S. corporations take advantage of.
  • Reforming the foreign-derived intangible income deduction (FDII) to limit tax breaks enjoyed by corporations and redirecting investments to R&D incentives. 

The breakdown of the plan’s trillions will have an encompassing impact on America’s economy. This includes transport infrastructure ($621 billion), community infrastructure ($689 billion), R&D ($580 billion), and eldercare ($400 billion). 

This is part of Biden’s promotion of his “Build Back Better” program. So, for the next decade, C corporations are expected to brace themselves for an increase in corporate taxes. 

American Families Plan 

This plan is the third proposal which was announced on April 28, 2021, with American families in mind and will cost $1.8 trillion. It covers three aspects; education, health care, and child care. However, this plan targets businesses not operating in the corporate world. It intends to rely on taxes from wealthy individuals. 

The main benefits of the plan will be affordable education, tax credits for workers and families, and job security for families. 

The proposed changes are:

  • The increased individual tax rate on wealthy individuals from 37% to 39.6%.
  • Increase in capital gains tax rate from 20% to 39.6% on families making over $1 million.
  • An imposed net investment income tax on earnings of over $400,000

These changes largely target high-income individuals. However, there is a rise in concern among small businesses. 

Individual Income Tax Proposals

The Biden administration aims at heavily taxing high-income persons through the proposed hike of 39.6% for both capital gains tax and individual income tax rates. Currently, the top tax rate for individuals starts from $523,601 and $628,301 for married taxpayers filing jointly.

However, businesses have shared concerns over how it impacts their operations, including individuals and small businesses. Courtney Titus Brooks, a senior manager at the National Federation of Independent Business points out that small business owners might be constrained in expanding their workforce and operations.

How Does the Plan Affect Nebraska? 

Despite some raised alarm over the Biden tax plan, small businesses are likely bound to benefit. But specifically, how will it impact your business in Nebraska?

In Nebraska, 99.1% of businesses in the entire state are considered small businesses. This means small businesses drive Nebraska’s economy and the expected benefits from the tax plan will further elevate their growth. 

How Might Nebraska Businesses Benefit?

1. The American Jobs Plan gives hope to Nebraska families and small businesses as workers, communities, and infrastructure will be given priority. This is a promising rescue plan to cushion the state from the effects of Covid-19.

Any small business that experienced significant revenue decline and loss of workers due to COVID will be given a new lease of hope as the government will be focusing on taxing the highest-income individuals and C corporations.

2. The hefty proposed taxing of high-income individuals and corporations will help sustain the program and enable small businesses to operate in a stable environment.  This will help you as a small business owner to increase investments in your operations and even hire more workers. In turn, Nebraska’s economy is set to grow.

3. As a small business owner, your business goals are likely tied to your personal finance goals. You may aspire to leave a legacy for your family. Biden promises to protect family-owned businesses and farms from capital gains tax hikes. This bill proposes that no taxes will be paid when your heirs take over the business. With the proposed tax plan, the government wants to elevate families and businesses over the highest-income individuals.

What Does This Mean for Small and Medium-Sized Businesses? 

The proposed tax plan should be viewed as an opportunity for small and medium-sized entities aiming to scale up their businesses. The main promise of the plan is to protect families, workers, and small businesses from tax effects.

One of the advantages is $998 billion in refundable tax credits for low-income to middle-income families. This means more money will trickle to the grassroots level, enabling your businesses to gain leverage over constant market changes. 

Going forward, small and medium-sized businesses should expect significant impacts from the tax proposals. Amid changing legislation, now is the best time to partner with a CPA who can stay on top of these changes and act proactively on your behalf versus reacting to certain changes when it’s too late. 


The proposed Biden tax plan is bound to cause a wave of impacts on individuals and businesses, including small businesses across the United States. 

If you run a small business in Nebraska, you’re right to have worries over how your business will perform in the next five years. This can cause you to have doubts about managing your business’ income, bills, emergencies, employees, and your retirement plans. 

You are also probably overwhelmed in keeping track of constant changes in tax laws and policies. The proposed changes according to the Biden tax plan will require being proactive when they become implemented. This calls for your attention to work with a partner that cares about your vision and plans for your business.

McMill CPAs & Advisors has experienced CPAs and tax professionals who can competently answer any questions you have about the proposed Biden tax plan and the impacts it has on your Northeast Nebraska business. We offer personalized consultation and tax services to help your business manage tax planning and achieve financial success. Please contact us today.

What Does Rising Inflation Really Mean for Consumers?

Clint Weeder

Business tax planning, investment advisory services, business valuations


Chances are, you’ve been worrying about the potential for rising inflation since the pandemic — and what this means for your purchasing power. This may also have you wondering where you should put your money, and you’re not the only one. The truth is, rising inflation is here, and small businesses everywhere are asking for more guidance on the topic. 

In fact, the U.S. Bureau of Labor Statistics reports that “in July [2021], the Consumer Price Index for All Urban Consumers rose 0.5% on a seasonally adjusted basis; rising 5.4% over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.3% in July (SA); up 4.3% over the year (NSA).”

While rising inflation does present some unavoidable challenges for business owners, our team at McMill CPAs & Advisors is here to help you thrive. Here’s what rising inflation really means for consumers. 


Since the pandemic, rising inflation has been nearly inevitable as businesses struggled with inventory and employees came in short supply for most of 2020 and 2021. Inflation has been most prominently observed in food, energy, homes, and new automobiles (all consumer necessities). However, many are promising that the current inflation should be short-lived and positively impact the bottom line in the long haul.

With a focus on CPI inflation, in particular, Forbes explains that “weird price movements were an inevitable side effect of closing down the economy to quash the virus, so they shouldn’t be totally unexpected. Luckily, they’re likely to be short-lived though may persist while the Fed works to get people back to work.”

Nancy Davis, the founder of Quadratic Capital Management, told the magazine, “I believe the Federal Reserve is more focused on the employment part of its dual mandate and will remain accommodative for as long as it takes to ensure the economy returns to full employment.” The so-called ‘easy money’ being pumped into the economy to encourage activity is likely to stay around, and “businesses (and their stocks) may continue to grow.”

Knowing this, the Fed has been clear that they don’t think inflation will stick around once people get back to work. Although this still leaves many wondering how long consumers will deal with the inflation spike in the meantime. 


When inflation kicks in, smaller businesses are often in a tighter spot than larger businesses that are more prepared for the ebbs and flows of inflation and purchasing power. The truth is when the same sum of money you have today can’t get you the same inventory it could previously, the value of that sum of money decreases — decreasing your purchasing power, as well. 

Right now, the U.S. is full-on experiencing this spike in inflation and shrink in purchasing power. Fortunately, there are at least two ways you can be proactive:

Stay In The Stock Market

When it comes down to it, it’s crucial that you stay in the stock market to protect your long-term assets. In many cases, inflation may hinder your stocks in the short term but can actually level out and be beneficial in the long term. Although it may go without saying, being careful not to make any drastic changes in your portfolio is important. 

Amy Arnett, a portfolio strategist at Morningstar, reminds consumers that “stocks can be good as a long-term inflation hedge but can suffer in the short term if inflation spikes.”

Mutual Fund Investing

When you invest in a mutual fund, you contribute to a pool of money alongside other investors, managed by a team of professionals looking to purchase securities. What your money is invested in depends on the type of mutual fund investing you decide to participate in.

More specifically, you’ll want to take a Passive Asset Class Management Approach. This approach emphasizes broad diversification and market returns in a controlled risk, low cost, tax-efficient environment.

Among this approach’s many advantages, you will quickly benefit from lower costs, lower portfolio turnover, greater tax efficiency, broad diversification/risk reduction, long-term perspective, control of asset allocation, passive asset class funds, and academic research (focus on the importance of asset class selection, not market timing or security selection).


There is no better time than now to put your trust in a financial planner to help guide you through the rising inflation and keep your business on top of the ongoing challenges the pandemic has put on you and the economy. 

McMill CPAs & Advisors has been working hard for individuals throughout Northeast Nebraska looking for comprehensive financial planning assistance, making sure you and your finances are prepared for inflation. There’s nothing more important than protecting your savings and assets — and you don’t have to go at it alone. Here at McMill, we understand the challenges and fears that come with rising inflation. We also know the best strategies for getting through these uncertain times and keeping your small business on track. To gain more insight and resources into what you can expect from rising inflation, contact us today and follow our webinars and blog for more tips.

Business Valuation Services: Why You Need to Know Your Value?

Clint Weeder

Business tax planning, investment advisory services, business valuations


The COVID-19 pandemic, uncertain market conditions, and potential tax law changes continue to impact small business owners and their families nationwide, and our community is no different. It has left many owners unsure of what the future may hold for their business and what planning they should consider to keep their business viable for years to come.

Business valuation services will help you get your footing as we slowly but surely put the pandemic behind us and as we learn more about the potential tax law changes. A business valuation gives you the state and health of your business and can assist you with many planning tools as you continue to grow your business and as you start to plan for your exit. 

Most importantly, it can provide an essential component of your legacy planning for you and your family.  

Warren Buffet quotes that “valuing a business is part art and part science.” Here at McMill CPAs & Advisors, we’re proud to combine art and science to offer complete business valuation services to business owners in Norfolk and throughout Northeast Nebraska. 

What Are Business Valuation Services?

A business valuation is a process of evaluating the economic value of a company. Business valuation services come into play to find the true value of a business due to several reasons.

Determining The Sale Value

A business valuation protects you from short-changing yourself during a company sale. It ensures that the asking price is ideal for prospective buyers while you receive the best return on your investment as possible. We’ll help you analyze your business compared to peers, including metrics that set you apart so you can negotiate favorable terms.

Estate Planning

In the uncertain tax world today, it will be as important as ever to understand how your business will be treated as part of your estate, to ensure the legacy you want to leave behind holds intact. A business valuation can provide an estimated value of your business, so you can make the appropriate decisions when planning for the future and potentially avoid a costly estate tax bill. 


During court cases such as divorce or injury, where settlements are due, a business valuation is vital. You will need to determine the company’s value to avoid an unfair determination.

Planning an Exit Strategy

If you are looking to sell your company, establishing a base value is important. It helps you understand the financial strengths and weaknesses of your company so you can plan on how to increase the company’s overall value. We can assist in generating a plan forward, including tracking key performance indicators (KPIs) that are essential in your industry.

Business Buying

Buyers and sellers may voice different opinions on the true value of a business. A business valuation indicates the amount a potential buyer should pay for a business. The valuation looks at potential income and market conditions to ensure you don’t get overcharged.


When you want to incorporate with other members, a business valuation helps determine the value of your ownership. A valuation is an essential component of any buy-sell agreement, and it should be one that is easy to understand. This will avoid potential disputes in the future between members. It will provide for the smooth transition of new members into the company and the exit of existing members. It will also protect the families of those members on both sides of the table. 

Strategic Planning

A business valuation helps entrepreneurs come up with a plan to boost their ventures. Present-day valuations will help you determine the business’s state and the decisions you need to make to improve it.


Before facing investors and banks for funds, you need a business valuation to enhance your credibility. It helps gain investor’s trust when they know how much your company is worth and it will help the bank better understand your financial position. 

How Is a Business Valued?

There are various elements of a business valuation that establish the worth of a business. They include the following:

Net Assets

Valuators use the asset-based approach to gauge the value of a business that is asset-intensive. Under this valuation method, the spotlight is shined on the business’s net asset value. The value is determined by assessing the fair market value of all assets less liabilities.

The Market Value Compared to Peers

The market value approach method entails assigning the business a value comparable to that of similar businesses in the market (relative to size, sales, and industry). The transactions used for comparison can be a previous transaction with the same company, transfer of ownership involving comparable companies, and a market quotation from listed securities by a company in a similar industry. 

An Analysis of Cash Flow

The discounted cash flow method (DCF) method is one of the most effective approaches to a business valuation. It looks at the potential future earnings of the business to establish worth. The approach can either analyze historical cash flows, or forecasted/budgeted cash flows to estimate the future cash flows of the company. The method is widely used for service-oriented businesses, and with businesses where cash flows can be projected with a higher degree of certainty. 

The McMill Way

McMill CPAs & Advisors use the above methods to estimate your company’s business value. A business valuation helps you to assess the current “health” of your business, assess the viability of business deals, and plan for the future. Our professional team will help you understand your business and its value so you can make the best decisions for you and your family. Contact us with any questions you may have regarding our business valuation services and how they can assist you and your business in Norfolk and surrounding communities today!