Improve Your Curb Appeal

Let’s begin with first impressions. Whether it’s in person or through photos online, the first thing a potential buyer will see is the outside of the property. You need to do an honest evaluation of its curb appeal and make sure it’s ready to show. Hopefully, you’ve kept up with your building’s exterior while you’ve owned it. If you haven’t, it’s worth the time and money to put your best foot forward to make the multi-family real estate sale.

Make sure the landscaping is tidy, from cut grass to pruned trees and hedges. Make sure pathways are clear and consider adding benches or stepping stones to dress them up. If the trim needs a paint touch-up, take the time to do it. And don’t neglect parking areas; they may be the very first step investors take on the property.

Make Sure Your Tenants are in the Loop

There are two main reasons to let your tenants know you are working to sell your multi-family real estate. First, you need to fulfill any state or local regulations about notice of new ownership. Be upfront and explain if their lease terms will be protected with new ownership. Answer any questions or concerns they may have honestly. Secondly, they can help you a great deal by knowing to keep their units clean, presentable, and ready to show. If work needs to be done, now is the perfect time for them to let you know.

Work on the Inside of Each Unit

After notifying tenants, work with them to schedule a routine inspection to perform a walkthrough and see anything that needs addressing in terms of cosmetic repairs, updates, or issues with occupancy or pets. Make a log of what needs to be done and handle it.

The more you can do to prepare your property for potential buyers, the more likely you will have a smooth and successful sale. Invest the time and money to put your best foot forward.

The post 3 Steps to Follow Before Selling a Multi-Family Property appeared first on Span Capital.

 Keep Your Business Plan Flexible

Don’t create an unchangeable business plan and expect it to succeed. For small business owners, a business plan is always a work-in-progress and should be taken liberally in order to keep your business responsive. For some, this means to remove parts of your plan that aren’t working well. For others, it means filling in gaps where the original plan was unclear.

 Always Ask Important Questions

Learn the importance of asking timely questions. Too often a business is full of individuals convinced they have the right answer but ask a few questions. The right question at the right time can help set a successful course for your entire company. Don’t assume you have all the right answers but be willing to seek wisdom from others.

 Review Your Goals

As a small business owner, you’ll want to review your goals almost as soon as you write them. A business strategy needs to focus on the daily interactions of your company while still remembering the long-term goals and objectives.

Don’t spend too much time and energy on tasks with no objective. If your daily work doesn’t bring you closer to your long-term goals, you need to review your business plan and determine how to create a logical progression toward your intended outcome.

 Respond Flexibly to the Market

Entire industries change overnight. Once you feel you have a grasp of your business and your market, it’s easy to forget that change happens quickly. Keep an eye out for updates, changes and new directions in your competitors and your entire industry. Whether you need to alter your product, shake up your branding or target a completely new audience, keep your business ready to move at a moment’s notice.

 Make Bold Decisions

Once you’ve created a business strategy, confidently move toward your goals. Any startup is a risky proposition, so it’s important to make bold confident decisions. Companies who hedge their bets too often find themselves taking no steps forward. Take a step, adjust when necessary and continue to keep your business responding flexibly to your new goals and new problems you face.

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For most financing, you’re going to need to put that strategy onto paper. A business plan is typically a requirement, showing that you’ve really thought things through and know how your goals will be reached. It’s also a good tool for you to keep yourself on track.

Since you’re just starting out, you may not have documents like accounts receivable and payable, your balance sheet, and tax returns. In that case, you’ll have to gather your personal financial documents. If you’re very new, you’ll have to do that anyway.

Some of the main ways that entrepreneurs achieve their business financing are loans from friends and family; credit cards; small business loans; and venture capital. Which will be best for you will depend on what you’re using it for, how much you need, and what kind of collateral you have to get approval.

If you only need a small amount, such as purchasing some equipment or furniture, a personal credit card might be enough. However, since the interest rates on these can get high, and the interest pile up if you can’t pay it off right away, it’s not the best choice for large amounts.

Friends and family are the only people that will lend to you without requiring a lot of documentation. The terms are also likely going to be much better, with a low rate of interest, or none at all. You might be able to take longer to pay them back as well.

Capital venture companies, or those seasoned investors who look for businesses to fund, won’t be interested need a few hundred thousand to a few million dollars of investment. Obviously, for that amount of money, you’re going to need to show that you’re serious and have your strategy well thought out.

If you need to use your personal history to get business financing, you need to make sure that it looks good. Pull your credit report and make sure that it’s up-to-date. If you can pay your credit cards off each month that will help as well. Be sure to take a look at the loans available through the Small Business Administration, especially if all you need is a microloan.

The post How to Finance a New Business appeared first on Span Capital.

1. Use Your Technology Skills

The sky is the limit when it comes to software and applications that focus on increased productivity. Choose the ones that work best for your personality style and learn to use them in their full intended capacity. Whether you need a full planner-style program or a calendar with alarm reminders, technology can be one of your best time management companions.

2. Always Have a To-Do List

One time-saving tip for productivity is to always keep a running to-do list on hand. This list can be the first thing you check in the morning and the last thing you review at the end of the workday. Crossing items off the list keeps your workload organized into manageable increments.

3. Find Your Focus

One of the biggest productivity killers is a continuous distraction. If you find yourself easily distracted, try blocking off certain parts of the day for answering emails and returning phone calls instead of continuously checking in on these items. Some productive entrepreneurs use background noise like music or white noise machines, while others need to bring in noise-canceling headphones for complete silence.

4. Trust Your Team

The best entrepreneurs find talented people to fill in the workload gaps. Hire people you can trust, treat them well and delegate as needed to free up your day to maximize productivity.

5. Map Out Your Day

At the end of each day, make a plan and schedule for the following day or week. Stay flexible and revise when necessary, but don’t make the mistake of spending each day in a reactionary instead of a proactive state.

6. Stick With What Works

New and better technology will always come along, and everyone you meet will have an opinion about how you should stay organized. The key to successful time management is to stick with what works best for your organizational style and not be tempted to continuously switch to newest, exciting thing.

If you are a young entrepreneur with limited time and resources, it’s especially important to learn how to use what you have available to your best advantage.

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Multiple Projects

Construction companies are often juggling projects in various stages of completion. This means that sometimes you can use a bit of extra cash to tide you over until a job is finished and you are paid. It also means that you may be viewed as a better risk because you can show that in your accounts receivable. In addition, you can often pay off your loans sooner than planned, thus receiving discounts on the final interest paid.

Fast Loan Process

A successful business in the construction industry can easily prove its reliability and cash flow with just a few bank statements, and that may be almost all you need to show, allowing you to get approval quickly. The sooner the loan process is completed, the sooner you can purchase the materials that you need to finish your current job and get paid, or to have part of your team start on the new one.

Expansion is Easier

Maybe you’ve been wanting to take on more work, but haven’t been able to do so because of the need for more staff or equipment. All businesses go through times when the key to further success is an investment but the cash flow is not quite there. Construction loans can help you invest where you need it so that you can win more contracts and know that you have the ability to meet multiple deadlines.

Types of Funding

There are several possible ways to get financing for your business. There are loans specifically for equipment, business lines of credit, small business loans from the SBA (Small Business Administration), and business credit cards. Each of these is worth looking into to be sure that you know the requirements in terms of what you need for approval as well as how it can be used and how much financing you can potentially receive.

If you have a company in the construction industry and are wondering how you can meet some of your cash flow needs, it’s a smart idea to look into small business financing. There are some loans that banks offer specifically for your line of work. The entire process may be much easier than you think, with funds made available to you in a matter of days.

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Just as with countries, corporations have their own cultures. It may not be expressly defined, but it comes across in the mission of the company and how people interact with one another, at all levels. As a company grows, new people have to be added to the ranks of employees. The more quickly the business grows, the staff has to be added more quickly.

While hiring new employees isn’t a bad thing, there has to be a way of communicating the company’s culture to them. When you only add one or two people, it can happen organically. If you add a lot at once, the ratio of new to old is greater, and there isn’t the time for an organic sharing of culture. In these cases, communication is key.

Communication is not only a way to share the culture with specific concepts such as mission statements, vision statements, and employee handbooks. The style of communication itself gives subtle clues about interaction within the company and provides a blueprint for people to follow. Each email and progress report then becomes a way of sharing and defining the corporate culture.

The ideal scenario is that you become aware of your particular company’s culture early on when it’s small. It can be seen in the way the owners and top-level management interact with each other and staff. If they favor a more laid back, informal communication style, this will take hold in other employees who look to their senior managers to guide them in what is appropriate.

It’s important that the leaders of the company define the culture they want at the beginning, if possible. They need to take a look at the style that is natural to them when communicating with one another and identify what works and what doesn’t. For example, if leaders speak their minds to one another, but don’t really want staff to do so, their communication needs to take this into account.

Once it’s properly identified, then the mission and vision, and all company materials can be written in this same vein. Employees will follow the example of the leaders, so their actions need to be in line with what they say. Once that happens, holding onto the corporate culture, even during rapid growth, will be much easier.

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Apply for a Traditional Bank Loan

In the long run, the least expensive financing option for entrepreneurs in the restaurant industry is the traditional bank loan. Much like a person, car, or mortgage loan, the borrower applies with a bank or credit union, who then evaluates their credit and ability to pay back. With a new company, an additional level is added: the business model. Banks need to see that you have done your homework by analyzing the market, knowing how competitive the field is, and projecting a multi-year plan to turn a profit. The process may be a bit slow, as approval must pass through several levels, but the rates and terms are typically good.

Apply for a Line of Credit

A line of credit may be a better way into the restaurant industry for some potential owners. While a bank loan will give you the cash that you apply for, a line of credit is a form of financing in which the borrower is approved up to a specified dollar amount. Once the approval is in place, the borrower may draw whatever they need and only pay interest on what they use. Because the risk is slightly lower, this process is a bit quicker than traditional loans, and approval is slightly easier.

Apply for a Small Business Administration Loan

The United States Small Business Administration (SBA) provides loans by working as a guarantor with traditional banks or credit unions. If you do not have sufficient credit to get a bank loan on your own, if you apply for an SBA loan and receive approval, the SBA will work with the bank by assuming the responsibility for a large portion of the borrowed sum. By having a government agency agree to cover defaulted payments, the banks are more willing to release funds as their risk has been cut down.

If your dream is to become a restaurant owner, evaluate these options, determine which is most appropriate for you, and start gathering your documents and building your plan!

The post How to Get Financing for a New Restaurant appeared first on Span Capital.

When you’re just starting out, for example, you may want to get some financing. A bookkeeper can help you with the financial documents necessary in your business plan. Many times, entrepreneurs are great at coming up with an idea, preparing the marketing and business strategies, but not at creating spreadsheets. But that financial information is critical for loan approval.

Taxes are another time when you can use the help of an accountant. Better than waiting until the taxes are due, however, it’s much better if you enlist the help of a bookkeeper regularly so your accounts are up-to-date. This will make filing taxes much easier and faster.

In addition, if the accounting of your business is current, your bookkeeper can advise you ahead of time of any potential problems. This way, you can better plan for any issues that may come up, rather than be caught off-guard when it’s going to be harder to fix. For example, if you need to hire more employees, change your suppliers, or your utility bills are skyrocketing, your bookkeeper will be the first to know.

The reality is, business owners need to focus on the big picture: getting clients and running the company. The financial records often get left undone or rushed through at the last minute because, on the surface, they don’t seem to be critical to the day-to-day operations. At the very least, customer service and sales seem more immediate. If left undone, however, you may see your financial picture too late.

When you’re thinking about buying a new building, expanding your company, or acquiring a new business, these are also times when accounting help can be critical. Having a really clear view of your cash flow and projections gives you vital information to determine the feasibility of growth. It’s also important if you’re thinking about selling and need help with valuation.

Assistance from a bookkeeper is going to be important at all phases of your business before you even have your first customer. In the beginning, though, there are part-time solutions until you’re ready to have one on staff full-time. Rather than think you can’t afford this kind of help, remember that it can actually save you money right from the start.

The post The Best Time to Hire a Bookkeeper for Your Business appeared first on Span Capital.

Dealing with Individuals vs. Entities

Firstly, it’s important to note that many commercial real estate endeavors are joint ventures between people who have formed a partnership and created a business entity, in the form of an LLC, corporation, or other appropriate business structure. While this seems like an advantageous procedural move, it can put financers in a difficult position because the new entity may nor have a business credit rating. This does not necessarily disqualify them from borrowing, but they may have to show a means to guarantee the loan.

Loan-to-Value and Debt-Service Coverage Ratios

Two important ratios that are weighed by commercial real estate lenders are the property’s loan-to-value ratio (the amount of the loan divided by its purchase price or appraised value) and the debt-service coverage ratio (the property’s annual net operating income compared to its debt service, which is comprised of principal and interest.

A good loan-to-value ratio typically falls in the range of 65 to 80%, which a good debt-service coverage ratio should be at least 1.25, indicating positive cash flow. Anything less than 1 indicates cash flow that is negative.

Loan Repayment Schedules

Like standard home mortgage loans, commercial real estate loans are amortized over an agreed-upon number of years that includes interest and fees. A longer amortization period usually means lower monthly payments and higher overall interest paid by the home mortgage holder.

With commercial loans, the amortization period is frequently longer than the length of the loan. This forces the borrower to pay off or “buy out” the remaining balance at the end of their term. These rates can be negotiated between the borrower and the bank, but they can turn upside down quickly, putting the borrower in a difficult situation.

As with all loans, entrepreneurs or investors interested in commercial real estate need to come prepared and have serious business goals and plans lined up when working to secure financing. Knowing these factors and considerations should help you keep a foot in the door!

The post The 3 Main Parts of Commercial Real Estate Loans appeared first on Span Capital.

1. Due Diligence Requirements

The JOBS Act, which makes crowdfunding legal for corporations, has extensive due diligence requirements. This includes background checks on both large stockholders and management.

2. Frequent Reporting

Companies that choose this method of fundraising must file reports with the SEC. Depending on the complexity of a campaign, this can take up a great deal of time and effort.

3. Difficulty Appealing To Potential Investors

Under the JOBS Act, businesses can’t advertise their funding campaigns. This makes it incredibly difficult to raise funds, as campaigns rely on a large number of small pledges. If you can’t get the word out about your company, you can’t convince apathetic internet users to spend their money. The only exception to this rule is that you can direct investors to the funding portal you’re using. While this may help people who already have a large audience, such as online influencers, it doesn’t do much for entities with little internet presence.

4. Disclosure Requirements

The JOBS Act puts several disclosure requirements in place:

• Documents must be filed with SEC
• Must be filed 21 days before your first sale
• Must contain audited financial statements detailing raises over $500,000
• Restrictions on Funding Portals and Broker-Dealers

Funding portals and broker-dealers are essential to funding campaigns. They are a single point of contact where investors can pledge their funds. A few popular examples are Kickstarter, IndieGoGo, and GoFundMe. All campaigns have to go through funding portals or broker-dealers that are registered as such.

The JOBS Act also outlines several restrictions on how these broker-dealers and funding portals may function and how businesses can use them. For example, these entities aren’t allowed to act as investment advisors, solicit investments or base employee compensation on sales.

6. Funding Caps

Most frustratingly, there are limitations to how much investors can contribute and how much money a business may make from campaigns. For example, investors with incomes of under $100,000 can’t pledge more than 5% of their net worth or annual income, whichever is greater. On the other end, businesses can’t make more than $1 million per year using this fundraising method.

Crowdfunding may seem like a quick way and simple way to raise money, but there are a lot of pitfalls. With the current legislation, it may be more trouble than it’s worth for many businesses.

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