Posts Tagged ‘business’

How to Spot a Bad Business Broker

February 16, 2015

detectiveWhen selecting a business broker to help sell your business, make sure to watch for the red flags in their business plan. These few tips can help you save time and money during the selling process.

The broker wants a significant or total fee paid up front:

Many brokers have begun taking upfront fees, but generally the total fee is a combination of an upfront fee and commission paid upon sale of the business. An unreliable broker meets with you, runs some quick numbers, tells you that you can get your price or even more for your business, and then asks for a check to get started. In many cases, business owners are so relieved that they’ve found a broker and elated that they’ll write a check on the spot, without checking any references. “They get to ‘take away’ your check when they leave and you may not see them again, if they can help it. (more…)

Business Brokerage 101

May 19, 2014

selling_a_businessAs 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…)

What Message Are You Sending?

March 24, 2014

bad_communicationToday’s environment is consumed with endless means of non-“oral” communication methods. Texting, emails, instant messaging, letters, notes and stickies are just a few.

When drafting an email or written message, you must be mindful of how you attempt to convey your messages. Often, the recipient of a message interprets it differently from the expectations of the well intentioned sender perspective. This often results in a moment or situation that stalls progress or even creates a confrontation.

(more…)

It’s a Process, Not An Event! Part 2

February 3, 2014

smart_goals

In a previous blog, the steps to be taken in advance of preparing your 2014 goals and business plan were discussed. To review, the steps are:

  • Analyze your 2013 business
  • Complete a skills evaluation
  • Document your time for one (1) week

After completing those three steps, you’re ready to establish goals and write a business plan.

Establishing business goals is just one piece of a larger puzzle. Business goals must fit with the other areas of your life: Personal, financial, family and spiritual. So, as you set your business goals, make sure they are not in conflict with goals in other areas. For example, if your business goals require a larger investment of time and your family goals are to spend more time with your family…. there’s a conflict. (more…)

Is Real Estate Your Hobby?

December 9, 2013

bad_voice_mailYou may be unwittingly giving your customers this impression. I often call agents to discuss real estate business and get voice mail messages that tell me they aren’t interested in doing business. And if I think you aren’t interesting in doing business, then you know that potential clients are probably feeling the same.

Here are a few examples of voice mails that turn customers OFF:  (more…)

Preparing Your Business for 2014

November 18, 2013

2014_planSo far, 2013 has been gratifying for most of the real estate industry. Phones are ringing, buyers are bidding and new homes are starting to spring up everywhere you look. The easiest course of action is to just sit back, get comfortable and wait for the phone to ring, but it won’t get you to the next step in your career.

Now is the time to start planning how you’re going to grow your business in 2014. How can you do better next year? What is my position in the market and how can it grow? What changes do you foresee in the market? Who will your customers be? (more…)

Choosing a Location for a Small Business: Lease or Buy?

November 4, 2013

lady with open signAll 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…)

It’s a Great Time to be in Real Estate Sales

September 30, 2013

join_real_estateUntil recently, all you heard about the real estate market was bad news. Prices dropping, over supply of inventory, excess bank foreclosures, short sales, etc. Income fell by 35 percent for real estate agents on average. Times were tough. Since the peak of the market in July 2007, thousands of real estate agents left the business and the interest in getting into real estate died.

That trend is reversing. It’s actually a great time to be in real estate sales. Home prices have increased month over month for the last 8 months, interest rates are still at historic lows, buyer demand is strong, bank foreclosures and short sales are down dramatically (35% of overall sales compared to 65% just 2 years ago) and new home inventory is on the rise. (more…)

What is a Capitalization (Cap) Rate?

September 23, 2013

cap_rateIf you’ve ever thought about purchasing an income producing property, you probably heard someone talk about the CAP rate. The cap rate is defined as the rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor’s potential return on his/her investment.

The most commonly used formula for determining a cap rate is simply net operating income divided by value. Let’s suppose that you are looking at a commercial building that has five tenants. The asking price is $800,000 and the net operating income is $75,000. By dividing the value of $800,000 by the net operating income of $75,000, you determine that the cap rate is 9.4%.

If you identify an income producing property for sale with a cap rate of 13%, your first thought might be that it looks like a great investment. A 13% return sounds great.

Before you pop the cork on the champagne bottle and begin the celebration, take a closer look. As the cap rate goes up, the price goes down however, risk follows the cap rate. So, the higher the cap rate, the higher the risk. (more…)

Is Now a Good Time to Buy a Small Business?

June 17, 2013

buying_small_businessThe 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…)

The 123’s of Warehouse Buying

May 20, 2013

warehouse_buyingAs commercial real estate continues to make a comeback, many buyers who are looking to expand their various businesses are beginning to look at the properties currently on the market. Warehouse space is one of the first items that a growing business will look for when it comes to storage or creation of goods.

Warehouses are used by manufacturers, importers, exporters, wholesalers, transport businesses and more. They are generally plain buildings in industrial areas, and include loading docs to load and unload goods from trucks.

If you are thinking of purchasing a warehouse, you should consider the following: (more…)

Adding Business Brokerage to Your Real Estate Career

December 3, 2012

business_brokerageYour real estate license provides opportunity for residential and commercial sales. It even provides opportunity for sales of businesses.

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…)

Financing a Small Business Acquisition

May 29, 2012

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…)

Buying a Small Business in 2012, Part Two

January 30, 2012

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…)

Buying a Small Business in 2012, Part 1

January 17, 2012

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…)