Manufacturing Business Available

We are currently representing a successful business that is now available for purchase, having been operated in SW Florida for over 25 years. They produce a Florida themed food product that is distributed throughout the USA and has the potential for a significant interenational market. Owner's benefits have been strong and consistent, topping out at around 500k in 2007, although off due to the economy the last two years. The facility is well organized and there is capacity to add a variety of products to the current lines. Building is owned by business owner and an attractive lease can be negotiated. This business could qualify a buyer for an E-1 Visa according to immigration attornies. It has been pre-qualified for SBA financing. It is priced at $950,000. Details are available upon completion of a non-disclosure aggreement.
Call Larry Steinborn, Broker
Sand Dollar Real Estate/
Business Depot

239-433-1343
bizdepot@aol.com

Small Business is Important

Small business accounts for 80% of all jobs in the USA. Many ideas for new products come from entreprenuers working on their own. Corporate giants may control much of the economy, but they certainly do not own it. The small business person can provide the quick response time and flexibility of management decision making not available in most large corporate structures. Opportunity is there for those willing to make the sacrifices necessary to acheive success.

Sand Dollar Real Estate/ Business Depot
239-433-1343

www.twitter.com/bizdepot

Spring Cleaning Your Business.

At one time there was a tradition known as spring cleaning. Living in Florida, it is not as obvious as it might have been in the more northern states where after a long winter of accumulation and storage of things in close quarters, we would move everything out and let the fresh air in. Here we do not have that annual reminder, but it is just as important, no matter what time of year. Summertime may be more convenient for us, when business is slower. It is just as important to business that we do an occasional cleaning of clutter and more importantly, an assessment of our business plan. Old files and dead projects need to be disposed of so that we can better concentrate on the active and potentially productive ones. The advantage of small business is that it can have a flexibility that large business can never have with their various departments and approval processes. If something is not working, now may be the time to decide to kill it and look at other profit possibilities. So, open your mind to new ideas and enjoy the invigoration of a fresh smelling office and the excitement of fresh ideas.

Economic Downturn?

Despite the negative news we hear everyday on Bloomberg or Fox News, there are many businesses in Southwest Florida doing just fine. One way is that many business owners decided to stay small enough to succeed. They didn't get greedy in the good times and over leverage to capture "potential" markets that as it turned out never materialized. They have the flexibility to change with the times and conditions much better than the large corporations, with their "legacy" costs and unmanageable chains of command. Are you listening Lee BOCC? While some have had to give up some of their space or employees, others have seen opportunity to serve needs and worked to fill them. Some have bought out struggling competitors to add needed accounts and usable equipment. Some have added profit centers that enhance the core business, while others have eliminated non productive lines or srvices to concentrate on the core business. Naturally, being good at what you do and maintaining a good reputation will maintain many a business through what might be the end of the line for those that don't.

Evaluation or Valuation?

Evaluation or Valuation?
I am often asked to evaluate a business when what is really wanted is to value a business. What is wanted is to know is what the business is worth. To determine the value of a business is a valuation. It takes skill and a variety of input as described in an earlier post to do a professional valuation. It is easy to understand the confusion because I have even seen broker advertise business evaluation as a service. An evaluation is a simple assessment of how your business is doing, which doesn't take a professional. Your customers do it for you every day. Their reaction to your product and services will give you a good idea of what you are doing right and what you can improve upon. While these evaluations are free, they are valuable. They will determine if your business will grow and succeed, which is the reason we are all in business. Of course, a successful and profitable business will have more value than another when it comes time to do a valuation.

Larry Steinborn, Broker
Business Depot
239-43-1343

www.twitter.com/bizdepot

What is my business worth?

To really know what your business is worth takes time and skill. Each business is unique and may have positive and negative factors that add or subtract from the value that a buyer is willing to pay. A current issue that needs to be considered if the business is to be financed is the availability of money. The bottom line is that any business is worth where the minds of the buyer and the seller meet. Below are a few of the factors I would ask a seller to present if I were assisting in targeting a price.

FACTORS DETERMINING BUSINESS VALUE

1. Income Stream
2. Equipment
3. Fixtures
4. Improvements
5. Real Estate
6. Lease
7. Licenses
8. Customer Mailing List
9. Patents
10. Copyrights
11. Secret Recipes (formulas)
12. Franchise Rights
13. Training and Consulting
14. Goodwill
15. Key Employees
16. Terms of Sale
17. Years in Business
18. Competition
19. Legislation
20. Risk
21. Market Trends
22. Ease of Duplication

Business Depot
Larry Steinborn, Broker
239-433-1343

Know the 6 Cs when financing a business.

Six Cs of Credit.

1. Character
2. Cash Flow
3. Capacity
4. Conditions
5. Capital
6. Collateral


If you are considering borrowing to expand or start a business, it is wise to be aware of the way a banker looks at your application. The six Cs are the guideline that the banker uses to justify to his committee or underwriters that the loan to you is a good use of their money.
The biggest factor is usually character. They want to know your reputation for responsibility in paying back loans. In other words, this is your credit score. But beyond that, they will want to know your experience at the business you are operating and how sound your business plan is. Therefore,it is important that you have a good relationship with someone at your bank. There needs to be a person you can call to discuss your needs and options. If you go to the bank and constantly see different faces, then you need a new bank. I tell people that having that personal contact is much more important than saving a few dollars on fees or shopping for the absolute lowest interest rate.
Cash flow is the next most important factor. They want to see sound projections indicating enough monthly income to operate and still cover the debt repayment.
Capacity to earn is also important. This has to do with the validity of your idea. Is there a need for your product or service? Conditions are the external factors that may have an influence on your business idea. Is the location right? Are there zoning issues? What is the short term and long term economy like?
Capital has to do with your equity position in the operation. If you are not in a position to risk any of your own cash, then the banker will have serious doubts.
Collateral is considered, but is not as important as the other factors. Banks are not pawn shops and have no interest in obtaining property. It is expensive to take the collateral and reselling it is complicated, so is a last resort.
Knowing these six Cs will help you prepare a proper application for your banker. It will also help you determine with knowledge, whether you really want to commit to the obligation.

Larry Steinborn
Business Depot
239-433-1343

Renegotiating a lease?

"Rent increase" is a term not used much in the last couple of years in SW Florida or in many other places throughout the USA. If your lease is expiring, you may be surprised as to how flexible and cooperative your landlord may be to keep you as a tenant. Even if your lease is not due, you may be able to obtain concessions from your landlord. With property values down and vacancies on the increase due to failures of businesses, now is an excellent time to review your own plan for the next few years. If your business is struggling, the landlord may allow an abatement of part of your rent for several months or a year to keep you in business and as a tenant. Now might also be the opportunity to move to a larger or more desirable location for little or no increase in rent. The first place to check is with your current landlord. They may have a property available and it puts them on notice that you may move if you find a better deal.
One thing to keep in mind though is that if a deal is too good to be true it might just be. Rents are down but not free, so remember that if the landlord does not have the cash flow to meet expenses, maintenance issues may become a problem or you may even have to deal with foreclosure.

Non-disclosure Agreement

Non-Disclosure Agreement.
At some point most business buyers will be asked to sign a non-disclosure agreememt. This is simply an assurance to a seller that a buyer is obtaining information that is confidential and often personal to a seller. The buyer is stating that he will keep the information in a confidential manner simply using it in an effort to determine further interest in purchasing the business. Unlike home sellers, business sellers generally only want qualified and serious buyers knowing the details of the business or that it is even for sale. The agreement also commits the buyer to directing all communication through the broker or seller. Some sellers have employees that are not aware of the intention of the owner to sell. Other sellers have told the employees. It is always best on the part of the buyer to assume that they do not know of the sale. If the buyer needs assurance that the employees plan to stay that can be a term of due diligence and covered after tentative agreements have been reached on general terms by the buyer and seller.

Business Plans

Why Do I Need a Business Plan?

"Proper planning prevents poor performance."


A business plan is like a road map, that assists the business owner to know where he is trying to go and how to get there. All businesses should have some form of business plan. It may be a simple concept for a small "mom & pop" business, or detailed and extensive for a larger business preparing a loan application. It may need to be updated on a regular basis to keep up with changes in the economy or opportunities that arise, but should have a basic concept of the mission of the business that does not vary. Businesses with a comprehensive business plan have a much higher degree of success.
This is why it is required for any loan application. The lender, dealing with all kinds of businesses, needs to know just what your business is about. If you have a confident knowledge of your business, the lenders comfort level of risking the depositors money with you is increased. Some landlords will also require a business plan before they will lease to you. They want to make sure you understand you are getting into.
Anyone thinking of starting or buying a business, must have some form of a business plan to really know if the concept is realistic. Once the business is going, it can keep you on track. Take it out every few months to see if you are doing what you should be.
You can easily write your own plan by following an outline. I will provide a sample outline in a future post. There are software packages that are pretty good available at the office stores. If you are applying for a large loan for expansion, the cost of a professionally prepared plan, may be justified.

Larry Steinborn, Broker
Business Depot
www.twitter.com/bizdepot