Most experienced leasing brokers agree that establishing a commercial tenant population usually requires representing landlords for a period of time. When you have a lease listing, you attract tenants and some number will not have an interest in your listed space but allow you to assist them with finding what they do want. Prospecting for landlords can include small to mid-sized inline shopping center owners, office building owners, retail property owners or industrial property owners. You can locate an ownership list if you want to purchase leads or you can approach landlords directly and solicit a listing. (more…)
As an agent, is it a good time to list and sell businesses? It’s always a good time to be in the business of business brokerage, but you should remember these tips.
First, you need to have an understanding of the business industry. If you want to list a dry cleaning business, take the necessary time to familiarize yourself with the business culture and language. You should try to select an industry that you have worked in or have an interest in. Agents that fail to adequately prepare for listing appear less than confident and have trouble earning the business owner’s respect. (more…)
It sounds too good to be true: As an IRA holder, you can use your retirement funds, prior to retirement age, to purchase commercial real estate as an investment inside your retirement account without incurring penalties or taxes. Depending on the account structure, you can even purchase these investments using a checkbook tied to your IRA funds.
Since 1974, IRA and 401(k) account holders have had the option to control the ways in which their retirement monies are invested, including real estate, tax liens and other alternative assets. Because the investment is made on behalf of the retirement account, just like the IRA investing in stocks and bonds, the acquisition is made without triggering a taxable event. (more…)
All growing small businesses may someday be faced with the question of leasing versus buying office space. This question has many pros and cons. With ever-changing office vacancy rates and market fluctuations, it’s uncertain what the future may bring. A small business owner needs to carefully weigh the pros and cons of leasing or buying office space.
First let’s consider the advantages of owning property. Locking in your commercial mortgage long-term can give your business clear, fixed costs. The associated costs of owning and running a commercial space can provide expense deductions in the form of mortgage interest, property taxes and other items. Owning your office can also offer the advantage of renting out extra office space adding another source of income. The prospect of owning commercial space and having the property appreciate over time allows the owner to sell eventually and fund their retirement. (more…)
The economy has created many challenges for hard working individuals as well as large companies. One of the unfortunate by-products of these difficult times has been layoffs and forced early retirement for many people. The question quickly becomes “what to do?”, since many folks are not ready to stop working.
What can be done to fill the void and provide more control and equity moving forward? One answer is to consider small business ownership as a solution. Owning a small business can provide excellent income and future equity while taking advantage of prior work experience. (more…)
On your way home today, take notice of how many small businesses you pass. Franchises and independent businesses are all around you. On any given day, any one of those business owners could be ready to offer their business for sale.
The business owner is leasing space or owns the property he or she occupies. This means that you will be conveying the lease or selling the real property along with the business transfer. Sometimes the business owner will sell the property and then lease back the space. This strategy provides capital and the business can be transferred with the business owner as the tenant. (more…)
In a perfect world, all sellers would finance the sale of their business and realize the additional financial gain associated with the loan interest. It seems like a great opportunity until the buyer decides not to pay the seller. So what are seller financing pros and cons today?
First, most small business owners have an immediate need for the cash or capital generated by the transfer of the business. The seller may be planning to purchase another business, retire or need the money for any number of other reasons.
Any of these reasons make financing the purchase and sale difficult for the seller. The seller’s CPA would be quick to point out certain tax advantages to be enjoyed by the seller but at the same time reluctant to recommend financing most buyers. (more…)
In today’s foreclosure-heavy market, it’s not uncommon to find land properties for sale in your area. Land has always been a great investment, due to its limited supply and historic rise in value. In fact, banks are now putting land on the market at prices that are pennies on the dollar compared with the original cost.
Many investors are purchasing land across Georgia. Depending on what you plan to do with the land, there are two different courses of action you can take: (more…)
Continued from “Buying a Small Business in 2012, Part One”.
You’ve now identified a business opportunity and completed a tour of the business facility. The seller’s answered your initial questions and provided you with business financial information. Once you review the income statements, balance sheets and tax returns, you can decide if you want to make an offer. There are two ways to communicate the offer to purchase the business. You could choose to utilize a contract or binding agreement or you could utilize a Letter of Intent or non-binding agreement. A contract must be written by an attorney and immediately binds you and the seller, and will require submission of earnest money. You’ll include certain contingencies in the contract that must be satisfied and the contract’s highly definitive. (more…)
You may be wondering if 2012 will be a good year to purchase a small business. Can small businesses generate profit in a difficult economy? These are fair concerns and certainly require the small business buyer to move forward with adequate caution. If you’re determined to own a business, you can find what you’re looking for by establishing specific search parameters and purchase criteria.
1. Research Well Performing Businesses
First, complete the necessary research to identify a short list of business types that perform well in a weak economy. Determine if franchise opportunities provide a greater chance of success. Franchises historically have a higher start-up success rate and give you a proven business system, training and name recognition. You’ll have to decide if you want to start a business from the ground up or purchase an established business. The established business will cost more however, you get to avoid the painful start-up period and you can see current and past performance. (more…)
Buying a business can seem like a daunting task. I always recommend a professional business broker, since they can help you find exactly what you’re looking for. Here are some checklist items that will be necessary to get the job done:
Get the necessary financial information
Sellers must be able to provide books and records for their business. This includes business income statements, balance sheets and tax returns. All income and expenses must be traceable to original invoices. A lack of books and records makes considering the purchase of a business impossible.
Determine the value of the business
There are numerous ways to calculate business value. One method involves rules-of-thumb specifically related to the business industry. Publications are available for this information as well as online resources. You can also ask your business broker to perform a competitive market analysis. This process requires a professional that has access to nationwide sold data. A competitive market analysis provides significantly greater detail and support of value. (more…)
When searching for a location for your business, one of the most viable options is a commercial lease. Rather than having to pay financing on a purchased property, a lease allows you access to a space, so that you can immediately begin doing business. The type of lease you choose could greatly affect your business in the future, though.
There are several different types of commercial real estate leases available: Net lease, modified net lease, and gross lease otherwise known as a full service lease. (more…)
Many of our business brokerage specialists are asked about franchises. Should you purchase one and what are the upsides to this type of acquisition? It’s become a popular option among business buyers, but should you take the leap?
Franchises are significantly different than independent businesses and offer several distinct advantages.
The first advantage involves a structured system of doing business. Whether or not an individual has specific experience in the particular industry, he or she can utilize the business system and succeed. Franchisors provide detailed training that fully explains the business system and how to use it. (more…)