Just Elementary, Inc. » Archive
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
Triple Net (NNN)?, CAMs? & Gross Leases
What does a Gross Lease entail, what are exactly are Triple Nets (NNN), and what about CAM charges in Commercial leasing? Let’s start with a Gross Lease. Gross Lease means a lease that has no additionally itemized charges for the operating expenses of the commercial property. This lease offers a simple and predictable periodic lease payment for a lessee (tenant). Gross leases are common in Industrial properties and other properties that have less maintenance and operating … Read entire article »
Filed under: Commercial Leasing
Buying vs Starting
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 … Read entire article »
Filed under: Uncategorized
Negotiating Commercial Lease Rate & Terms
Let’s face it, this is the time to negotiate or renegotiate your commercial, retail or industrial lease. The primary metric motivating landlords is the vacancy factor. Across the board, from retail to industrial, vacancy rates are high, which means landlords have more and more spaces to fill and keep occupied. Of course, this is a factor of an economic dip and your business is likely suffering a decrease in revenues from the boom times. But, … Read entire article »
Filed under: Commercial Leasing
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
Business Valuation Too High Using Wrong Methodologies
Many a client we have come across has a business valuation in their hands that is much higher than reality dictates. The reason for this is multi-faceted. Let’s start with unscrupulous M&A sounding firms who claim to be able to sell businesses for outrageous multiples based on future earnings. Often, these types of firms put on slick presentations and claim to have sold many businesses for great premiums. … Read entire article »
Filed under: Business Valuation, Featured
How You Benefit from a Small Business Valuation
It is a simple question: Why should I get a valuation for my business, especially if I am not planning on selling business anytime soon? As business intermediaries, we can tell you why. Reason #1 to Get a Broker’s Opinion of Value: Checkup for your business One good reason to get a Broker Opinion of Value (BOV) from an experienced business broker is to help you find out where you are losing value in your business. In our experience, we … Read entire article »
Filed under: Business Valuation
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
Fully Improved Kitchen Space For Lease
Here is another low cost, simple entry business opportunity. It is a former Asian Fusion restaurant with full hood and grill located in a retail shopping center anchored with a grocery store and RITE AID pharmacy. Located in Colton, CA. This built out restaurant space is 3,100 sq ft and features a full hood and grill, 2 separate restrooms, plenty of dining space. For an appointment to tour the facility, contact us @ 323-213-9193 or … Read entire article »
Filed under: Business Opportunity For Sale, Commercial Leasing
Does Trust Matter in the Due Diligence Process
You have your Due Diligence Checklist, and you are making progress on completing it, but one thing is in the back of your mind. Trust. Do you really trust the other parties involved in the transaction? … Read entire article »
Filed under: Due Diligence, Featured
Due Diligence Service for Small Businesses – The Process & Checklist
When it comes to doing Due Diligence on the purchase of a small business, it is important to recognize that every business is different and you will need to figure out which are the most important items in your situation. With that in mind, the above are some basics to have in your checklist. Remember, not all of these may apply to your particular situation, and your situation will require specific focus. For a consultation … Read entire article »
Filed under: Due Diligence, Featured
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
Failed Franchises Measured by SBA Loan Failure Rates
Sounds like strong language. Thanks to our friends at thefranchisehound.com we have a list of SBA Loan Failure Rates for loans doled out to franchised businesses. An important disclaimer is that the list is not the actual failure rates of franchisees for a the listed franchises, it is only a list of SBA Loans gone bad that were given to franchisees of the franchises. Note that even 3 of 14 SBA loans to McDonald’s franchisees … Read entire article »
Filed under: Franchises, 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
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