Just Elementary, Inc. » Business Tips
Tips to Make a Business Easier to Sell
Let’s face it, business buyers and commercial property investors have a lot of opportunities to choose from when they searching online. They easily sort results and inquire on numerous different opportunities available. Because of this, getting and keeping their attention is hard. Given that you have put in an amazing amount of blood sweat and tears setting up and operating your business, when it comes time to secure a buyer, how well positioned is your business … Read entire article »
Filed under: Business Tips, Selling A Business
Definitions of Business, Leasing & Commercial Real Estate Terms
When reading online you may come across a plethora of acronyms and real estate terms that sound familiar, but you don’t know what they mean. Here are some Common Commercial Real Estate Terms: Commercial Leasing Related Terms: NNN: This is referred to as ‘Triple Net.’ This is a commercial leasing term that refers to leases in which the Lessee (tenant) pays the operating expenses of the property. In a full Triple Net lease, all of the operating expenses … Read entire article »
Filed under: Business Tips
Occupancy Costs, Should you Move your B2B Business?
For a B2B business, such as a manufacturing, distribution or service business, Occupancy Cost is the total periodic expense incurred for the right to occupy the physical real estate it occupies. Occupancy Cost is commonly referred to as ‘Rent.’ Rent is more than just the base rent, it also includes all of the NNN/CAM charges that go along with it. See our post on NNN/CAM charges for a greater explanation of these additional expenses. However, there … Read entire article »
Filed under: Business Tips, Commercial Leasing
Ramifications of Round Table Pizza’s filed Bankruptcy, What to expect based on lessons learned from past franchisors who filed for Bankruptcy
You may have heard that Round Table Pizza, the Franchisor, has recently filed for bankruptcy. What does this mean for the brand, franchisees and it’s customers? In looking back at past situations that share similaraties, it is not all dire news. Two such examples are Schlotzsky’s in 2004 and Togo’s from around the same time. Schlotzsky’s was a publicly listed company when it filed for bankruptcy in August of 2004. After changing hands a couple of … Read entire article »
Filed under: Business Tips, Franchises
Pros and Cons of Using an Inventory Service During Escrow
Should you use an Inventory Service when you are buying a business? We’ll give you a breakdown of when it will be handy and when you might no get enough benefit for the cost. Reasons Not to Use an Inventory Service: #1. When the amount and quantity of the inventory is small enough that the buyer and seller can count it all in a relatively small amount of time. #2. When you need to get to know the … Read entire article »
Filed under: Business Tips
Pitfalls of Buying an Existing Franchise Business
There are a lot of benefits to buying an existing franchise business. However, in this post we will cover some drawbacks that pertain to acquiring an existing franchise business. Having an extra party in the process, that being the seller of the existing location. Never underestimate how much extra work it is to negotiate, and by adding the existing owner as another party to … Read entire article »
Filed under: Business Tips, Due Diligence, Franchises
Tale of a Closed Round Table Pizza
Franchises aren’t all fun and games and wild beyond imagination riches. The road to financial freedom and family happiness is littered with former franchisees who have lost everything, or at the very least lost something, like the following tale of the owner of a North Orange County Round Table Pizza. This particular Round Table unit was open many years and was a popular fixture in the community. The longtime owner had decided to sell after many … Read entire article »
Filed under: Business Tips, Franchises
Who Pays Sales Tax on FF&E for a Bulk Sale Escrow
When buying and selling a business in California, there is the not so little matter of paying sales tax. Yes, sales tax when buying a business, just like you would pay sales tax on a pair jeans at the department store. The theory is that when you are buying a business, you are not just buying the Goodwill, but you are also buying tangible equipment critical in the operation of the business. That tangible property … Read entire article »
Filed under: Business Tips, Due Diligence
Buying a Business, Do I really need an Escrow?
A common misconception is that escrows are only for buying a house or commercial property. Often times a novice business buyer will buy a business and simply hand a check to a seller. Yikes! Using a bulk sale escrow is an important legal step in buying a business in California. What is a bulk sale escrow? Glad you asked! … Read entire article »
Filed under: Business Tips, Due Diligence
Tax Incentives via Enterprise Zones in California
Tax planning is an important piece of homework to take care of when it comes to cash flow planning a business. So many decisions you have to make are altered by them, from staffing, to HR issues, to where you are located. In regards to location planning, there is the obvious, which are business license fees for the city/county that you plan to operate in. Beyond that, you may have heard of Enterprise Zones. Enterprise Zones … Read entire article »
Filed under: Business Tips
Demographics and Leasing (More to it than meets the eye) Case Study: Existing Laundry Owner
From our sister site, laundryanalytics.com, comes a brief story about an existing laundry owner in the Phoenix area and his history in the business. Here is a short primer on the story. The Arizona retail market has been severely struggling since the recession began, which has really impacted laundry owners. Laundromats depend on dense residential areas for business, and in the Arizona market, many people have fled as construction jobs and other low wage retail … Read entire article »
Filed under: Business Tips
Definition of EBITDA
EBITDA is a common accounting term that is used with sophisticated small businesses, it stands for Earnings Before Interest, Taxes, Depreciation and Amortization. EBITDA is basically the actual cash flow profit of the business based on the actual expenses of the business. There are two categories of items in EBITDA, one category is Taxes, which covers three of the items, amortization, depreciation and taxes themselves. Debt service expense is the other category, which covers the interest on … Read entire article »
Filed under: Business Tips
CBB of the Week Profile from CABB
I was just profiled as the C.B.B. of the week by C.A.B.B. C.A.B.B. is the California Association of Business Broker C.B.B. is the Certified Business Broker designation bestowed upon qualified and experienced Business Broker members of CABB. … Read entire article »
Filed under: Business Tips
Due Diligence Buying a Coin Laundry Laundromat
A self service ‘coin’ operated laundry sounds like a glamorous and easy profit business. It isn’t, but it can be. If you polled a lot of laundry owners, as we have, you will find that most of them will tell you from experience that there are a lot of ways to lose your shirt when investing in a laundry business. While a coin laundry sounds like a simple business that you buy and then collect … Read entire article »
Filed under: Business Opportunity For Sale, Business Tips, Due Diligence, Featured
SBA Express Loans under $250,000 Easier to Get
A great article in the LA Times points out that the SBA loan programs is getting some needed modifications. We’ll specifically cover the smaller ‘Express’ Loans. ‘Express Loans’ is a term that describes SBA loans that are up to $250,000 in value. Express loans have been historically hard to get for a couple of reasons. Number 1, there is not a huge profit margin to them for a bank, and number 2, the bank had 50% … Read entire article »
Filed under: Business Tips, SBA
Condemnation Clauses for Commercial Leases
The Condemnation clause is an often overlooked clause in negotiating a commercial lease. Even though it rarely comes in play, it is well worth negotiating just in case to protect the many years of blood, sweat and tears a lessee/business owner has put in to the business. A condemnation clause dictates how compensation to the property owner is allocated to the tenant(s) at the property in the case that the property is seized via eminent … Read entire article »
Filed under: Business Tips, Commercial Leasing, Landlord, Negotiation
1031 Exchange for A Business?
Business owners often ask us, and the answer is Yes, a 1031 exchange for a business is possible. The reason business owners ask if it is possible, is they often want to exchange a business for an investment property. But, they are very rare to pull off for many reasons. However, the exchange must be like kind, so business assets can not be exchanged for an Industrial property, or any other real property for that matter. Businesses … Read entire article »
Filed under: Business Tips
Why You Can’t Get an SBA Loan
People complain that securing an SBA loan is too difficult. There are many factors at play, here we consider the impact of a Borrower’s Business Experience on their qualifications. In the early part of the past decade, as the economy grew at astronomical rates, the rate at which business bank loans went bad shrunk to and hovered at minuscule levels. Once this failure rate was super low for too long, enforcement of the experience criterion became … Read entire article »
Filed under: Business Tips, SBA
Small Business Due Diligence – Verifying Seller’s Tax Returns via IRS 4506
When trying to buy a small business, it is important to do your Due Diligence to gauge the suitability of the business to your needs, and to make you are paying the appropriate price for the business. One important step is to verify the tax returns that have been filed by the owner of the business. Of course, if the seller hands you copies of the Tax Returns, should you just automatically assume that they … Read entire article »
Filed under: Business Tips, Due Diligence
Leasing Second Generation Restaurant Space – Saving Time & Money
Eating Someone else’s leftovers doesn’t sound like the greatest of deals. But, when it comes to your money, you’ll have to figure out if you want to buy an existing business ( e.g. leftovers), or make something new from scratch. Should you buy an existing business? Should you start a new business? That depends on you and the team you are going into business with. There is a Right and Wrong answer for you. We will layout some points for you to consider to help you make an informed decision that will feel, well, Just Elementary! Reasons to Buy: You want an established track record and proven business model. You will be open for business the day you take possession. Trained employees in place with a seller to offer additional buyer training. Reasons to Start: You have your own … Read entire article »
Filed under: Business Opportunity For Sale, Business Tips, Commercial Leasing, Negotiation
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