Investing in the COVID-19 Recession Era

Investing in the COVID-19 Recession Era
By Patrick Findaro, Co-Founder and Business Development Director of Vetted Biz

An analysis on the industries with the strongest likelihood of a rapid recovery from the recent lockdown-induced recession

Introduction

The recent COVID-19 induced lockdown led to a rise in a nationwide recession of which the country is only now beginning to recover from. Nevertheless, after researching and analyzing more than 2,900 businesses at Vetted Biz, we have found a select few industries that were able to remain stable despite social distancing restrictions. Additionally, there are also other industries expected to thrive once restrictions finish being lifted and the worst of the pandemic has passed.
The criteria used for this article when evaluating these industries addressed several factors. First, it looked at how successful each industry’s businesses were in adapting to these new restrictions. Then, it studied what opportunities these industries offered for its businesses to diversify during difficult times; and also speculated on what curve model best suited each industry’s recovery process once lockdown restrictions finish being lifted. Finally, in cases where this was possible, this study also cross-referenced industries’ performance predictions with the historical data on their SBA loans, which can be found here.

Main Findings: 3 Characteristics, One Outcome

The findings from this initial research concluded that COVID-resilient industries normally contain the following three characteristics: 1. Secure payments, which refers to having recurring revenue ensured by having either periodic contracts or offering services deemed “essential”; 2. Market leverage, which concerns having a strong brand and industry performance prior to lockdown restrictions being imposed so that businesses do not have to disburse additional costs in marketing during this time; and 3. An efficient budget, which encompasses factors such as high margins, strong liquidity and overall profitability. The article below will address in-depth, industries that are deemed either “COVID-resilient” or that will likely bounce back in the short-term once local restrictions finish being lifted. It will provide pertinent examples on how each industry is adapting accordingly, and will conclude by showing how the industries selected all have the three characteristics previously deemed necessary by this article.

COVID-Resilient Industries

Ghost Kitchen Restaurants

Ghost Kitchen restaurants – which are professional food preparation and cooking facilities set up for the preparation of delivery-only meals – have not only remained open during the recent lockdown, but also saw an increase in sales throughout this period. Amongst the numerous benefits that come with investing in a Ghost Kitchen concept, two specific ones particularly created optimal conditions for them to continue to thrive during the current situation: their efficient budget, and market leverage. Because Ghost Kitchens focus solely on servicing delivery and takeout orders, not only is the kitchen’s site required by the restaurant smaller, but also, the location of the kitchen is not as important seeing the business is not as dependent on foot traffic – both of which allow for lower costs associated with real estate.
Additionally, Ghost Kitchens can be run by as little as 2 to 3 employees, a fact that given the current situation not only further reduces costs associated with payroll, but also mitigates any contamination risks which remain a predominant concern during COVID-19. In terms of this sector’s market leverage, it is important to consider recent studies showing that 31% of consumers use delivery services at least once a week, and that 59% of millennial orders every week are either for takeout or delivery.
Beyond that, a recent study on SBA Loans found that between 1991 and 2019, 61% of food and beverage franchise loans were paid-in-full – a relatively high value when compared to other industries such as fitness centers or home services. The characteristics outlined above shows that Ghost Kitchen models are a sector of the restaurant industry that should only be expected to continue to strengthen as social distancing growingly becomes a greater part of the population’s reality.

Landscaping

The landscaping industry, which includes installing, cleaning and maintaining any territory’s green area, is another industry that has remained stable throughout the recent lockdown restrictions. Because the landscaping industry was not shut down during the recent lockdown, it was able to keep servicing its clients and generating revenue. The fact that state and municipal laws require businesses to maintain the landscaping orderliness of the territory they are operating in, means businesses offering landscaping services are treated as a priority by its commercial clients.
Additionally, as commercial businesses open, landscaping businesses are once again able to leverage their presence and ensure they can hold existing clients while adding on new ones as well. Another important factor to consider is that most services contracts within this industry are signed on a long-term basis, meaning recurring revenues is a strong characteristic of this industry. Finally, because the services provided by this industry are at the client’s specific location, the business can be operated from a small office space and is consequently able to optimize its budget by not having to allocate a great percentage of it towards real estate costs, which normally make up a large sum of a business’ expenses.

Property Management

The Property Management industry, which offers services that manage commercial and residential properties on a large scale on behalf of homeowners, is an additional industry that has proven to be COVID-resilient. Property management businesses manage owners’ commercial or residential real estate properties on their behalf through long-term contracts. These businesses deemed essential by homeowners and their long-term contracts allow for greater stability and makes it harder for clients to go back on their service contracting decisions. This allows for a strong inflow of recurring revenue.
Additionally, property management businesses can be run from a home office and by 1 or 2 employees only. SBA studies show SBA loans disbursed to businesses within the Real Estate industry also had a relatively high paid-in-full rate of 60.1% – thus further corroborating the industry’s strength despite recent circumstances.

Bookkeeping & Tax Preparation

Finally, the bookkeeping and tax preparation industry has thrived during this most recent recession. With most of the population rushing to have tax returns filed to receive government stimulus packages, this industry has recently seen an increased demand that has allowed for its businesses to leverage their market presence.
Secure payments have also been a feature of the industry due to monthly payments and renewals from businesses in need of bookkeeping services as they adapted to recent conditions and prepared to apply for stimulus packages as well. Finally, these businesses can also be run from a home office and with as little as 2 to 3 employees. Once again, bookkeeping and tax preparation businesses have shown that with an efficient budget, secure payments and strong market leverage, an industry is able to remain afloat even throughout a COVID-induced recession.

Cleaning & Maintenance

While cleaning and maintenance services might have been suspended or diminished as lockdown restrictions were put in place, this industry is likely to see the strongest and fastest recovery curve as these same restrictions begin being lifted. ¬With one of the most important conditions for reopening being ascertained cleanliness at all times, it is likely the cleaning and maintenance industry will experience the strongest market leverage, as their services are considered the utmost priority of any business looking to reopen.
Additionally, cleaning services do not require an extensive employee count or entirely sophisticated equipment. When cross referencing this industry’s performance prediction with its historical data on SBA Loans disbursed between 1991 and 2019, the cleaning and maintenance franchise industry had the highest SBA paid-in-full rate at 67.8%, once again reiterating the industry’s strength and likelihood of recovery once lockdown restrictions have been lifted.

Barber Shops & Beauty Salons

Although beauty salons and barber shops were not deemed an “essential service” during the recent lockdown and consequently had to shut down their services throughout most of the quarantine, they are likely to see a strong recovery curve as restrictions are lifted and people begin to resume their normal lives.
Grooming services especially for men, will likely peak as they return to work in need of a haircut. Additionally, women will likely seek beauty salons to address services in need such as waxing, haircut, and eyebrow design. By leveraging its market presence as people begin leaving their homes and resuming their regular self-care routines, the barber shop and beauty salon industry will likely see a strong recovery.

Children Programs

Children education and after school programs is another industry that will likely experience a strong bounce back once lockdown restrictions are lifted. Because most businesses have remained open and transitioned to online platforms, they have been able to maintain their market presence and secure a steady inflow of revenue as their help in keeping their children entertained or providing additional reinforcement to online schooling efforts became an unprecedented priority to parents also working from home.
Additionally, it is likely their market leverage will be even further elevated once families resume their daily life and parents begin to push their children towards reestablishing their regular routines. Finally, as children return to school in the Fall and parents see the education gaps left from online schooling during the spring semester, education programs in particular should experience an even greater growth rate.
Children education and after school programs have a strong leverage to secure a steady growth once restriction lockdowns are lifted, a fact that is corroborated by its relatively low SBA default loan rate, which was at only 4.2%.

Conclusion

As lockdown restrictions are lifted, a business’ ability to adapt and grow under current circumstances will likely become a strong factor in any investment process being pursued. By outlining some of the industries we have seen thrive during these difficult times, we hope to have clarified and mitigated any uncertainty that may have risen during your entrepreneurial pursuits amidst COVID-19. In sum, businesses and their respective industries that have been able to secure payments, optimize their budgets, and leverage their market presence should be considered the strongest candidates for investment as the country begins to recover from this COVID-induced recession.

Learn more here: https://www.vettedbiz.com/

* * MasterMind Minutes * *

Photo by AbsolutVision on Unsplash

MasterMind Minutes is the Webcast that shares expert business information in Minutes Not Hours. Each edition runs approximately 10 to 15 minutes and features an expert guest covering one question. The entire series is posted and updated several times a week on this page so you can binge watch back-to-back “episodes”. Three to five new editions are added each week so keep coming back to view the experts on an insightful topic that is sure to help you build, grow and run your business.

www.franchisegrowthsolutions.com

HOW TO EVALUATE A STARTUP OR EMERGING BRAND FRANCHISE WITH ONE OR NO FRANCHISEES?
Our Guest Today is: Ed Teixeira.
Ed has over 40 years of experience in the franchise industry and is the VP Franchise Development for FranchiseGrade.com a leading franchise market research firm. Ed is the author of Franchising from the Inside Out and The Franchise Buyers Manual and has spoken before the International Franchise Expo, Chinese Franchise Association in Shanghai, China and has lectured at the Stony Brook University Business School on Franchising.
Contact Ed at: https://www.franchisegrade.com/. 1-800-975-6101
Contact Gary at: [email protected]
Learn More About Franchising: https://www.franchisegrowthsolutions.com

WHAT SHOULD EMPLOYERS THINK ABOUT WITH RESPECT TO LIABILITY CONCERNING EMPLOYEES GETTING CORONAVIRUS AT THE WORKPLACE?
today’s guests are:
Joel Greenwald is the Founder and Managing Partner of Greenwald Doherty LLP, a national management-side employment law firm. Focusing on labor relations and employment law. AND Michael Einbinder is a founding Partner of Einbinder & Dunn. He is a participating member of the American Bar Association Forum on Franchising.
Contact Michael at: [email protected] – Contact Joel at:[email protected]

HOW A COMPANY CAN SUPPORT THE COMMUNITY, ITS EMPLOYEES AND ITS FRANCHISEES IN TIME OF CRISIS – Today’s guest is Hector Westerband. Hector is the Founder and CEO of ACAI EXPRESS. He has over 20 years in the hospitality industry. He was introduced to the amazing Acai Stone Fruit. It was there where he started his own Acai Food Truck Called Acai Express in 2013.development.
Acai Express: https://lnkd.in/eESYZ6U

WHAT ARE THE FRANCHISE BRANDS THAT ARE DOING WELL DURING AND WILL DO WELL AFTER THE PANDEMIC? – Today’s guest is Lance Graulich
Lance is the founder & CEO of ION Franchising, an industry leading franchise consulting and development group, that represents over 500 franchise brands & business opportunities within 90 categories. Lance helps prospective entrepreneurs find their perfect franchise for FREE.

ARE YOU OVERLOOKING POTENTIAL MONEY SAVING CHANGES IN THE FEDERAL TAX LAWS THAT WERE INCLUDED IN THE COVID STIMULUS BILLS? – Today’s guest is MICHAEL IANNUZZI
Michael Iannuzzi is a partner and co-leader in Citrin Copperman’s franchise practice providing a variety of services to a wide spectrum of clients within the franchise community.

GROWING YOUR FRANCHISE COMPANY POST COVID-19 – Today’s guest is Harold Kestenbaum.
Harold is a franchise attorney who has specialized in franchise law and other matters relating to franchising since 1977. https://youtu.be/OOCXqhGPA_U

WHY DO FRANCHISEES FAIL – Today’s guest is Tom Scarda, CFE, Founder & CEO of the Franchise Academy, Best selling author and Podcaster.

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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HOW ARE BANKS RESPONDING TO LOANS FOR NEW BUSINESSES?
Today’s guest is Reginald Heard – Founder and CEO of Bankers One Capital.

HOW ARE YOU MARKETING AND GETTING THE WORD OUT THAT YOUR BUSINESS IS GETTING READY TO REOPEN? Laura Skulman, Director of Marketing and Events for B&D Burgers in Savannah Ga.

HOW FRANCHISORS ARE CREATING A DIGITAL STRATEGY AS THE ECONOMY OPENS UP – Today’s guest is Aubree Coderre, National Sales Manager at C-Squared Social

Stephen McCluskey Insurance Expert – Discussing what you can do if your Insurance Company is not paying business interruption insurance due to Covid 19 closure

Michael Einbinder – Founding Partner of Einbinder and Dunn, a Law firm focusing on the needs of franchisees and franchisors

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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OPPORTUNITIES TO OPEN A RESTAURANT NOW! Today’s guest is David Simmonds – Commercial Rental Expert

MasterMind Minutes – One Question – One Expert Answer – Minutes Not Hours
Our guest today is Doug Smith… He is the Director of Sale for ROI Experts which is a digital marketing agency that works with restaurants around the world. ROI Experts generates trackable ROI using their unique ROI engine platform. Doug is 27 year veteran of the radio, sales and marketing. Visit their website at www.roiexperts.com‍

Beyond the Covid 19 Shutdown, Returning Workers will be Judging “Workplace Culture”

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MATTO FRANCHISE
A Revolution is Brewing
LEARN MORE HERE:
https://www.mattofranchise.com/

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Workplace talent drives success. It is not products, not marketing, not demand that ultimately make a company competitive. Don’t fall victim to fear and culture failures during these times. It will inhibit the future health and growth of your company.

Beyond The Covid19 Shutdown, Returning Workers will be Judging “Workplace Culture”

By Gary Occhiogrosso
Photo by Austin Distel on Unsplash

As companies continue to evaluate their business in these challenging times, one of the areas many small business operators, and CEO’s of large companies, are investigating is workplace culture. As we ramp back up, many companies will be seeking employees. Many workers will be very focused on how companies treated their employees, vendors, and customers during the pandemic shutdown. Returning employees will also want to know that they, their work, and their ideas, make a difference. Make no mistake; the job market will be so robust that workers have the opportunity to pick and choose for whom they will work. Companies should take this time to revisit, and if necessary, reinvent their workplace culture if they intend to compete for the most qualified employees. Workplace talent drives success. It is not products, not marketing, not demand that ultimately make a company competitive. Don’t fall victim to fear and culture failures during these times. It will inhibit the future health and growth of your company.

Please review this article in the Harvard Business Review. It clearly and expertly advances the concept of workplace culture and how to improve your approach and practices to best advance your company in the upcoming turnaround.

Excerpt:

    Today’s workforce wants to know that they’re making a difference within their companies. While work cultures are unique to every organization, the foundation of what enables a culture to thrive is the extent to which employees are empowered to be engaged, feel valued, and be heard. This is where leadership comes in.

Read the entire article here at Harvard Business Review: https://hbr.org/2020/04/build-a-culture-that-aligns-with-peoples-values?utm_campaign=hbr&utm_source=linkedin&utm_medium=social
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Franchise Money Maker
Click here to Franchise your company, expand your brand, collect your royalties!

Lead Generation, Franchise Sales and Reality

This approach is terrible not only because you have empty spots in your pipeline but also because an ebb and flow in the advertising plan sometimes may cause the “brand” to disappear for awhile and send the franchise buyers a less than confidence inspired massage. For a start-up or emerging brand, this is the equivalent of a jet airliner “pumping the brakes” to save fuel while attempting to “take off.” It usually leaves a mess at the end of the runway.

Lead Generation, Franchise Sales and Reality
By Gary Occhiogrosso – Managing PartnerFranchise Growth Solutions, LLC.
Photo by Kees Streefkerk on Unsplash

The best way to get results in franchise lead generation is to remember that NOTHING works a lot, but everything works a little. What does that mean? It means for a start-up or an emerging brand (under 50 units), you need to try various lead sources to test which “streams” bring in the type of leads at the rate necessary to make your sales plan.

Look at all the factors in the game
Cost Per Lead and Cost Per Acquisition are only two KPI’s to look at when monitoring your program and its results. It is not as straightforward or revealing to limit your decision based on “how much did I spend and how many units did I sell.” The Reality is; it takes numerous elements to gain success. Such as time to build your pipeline (5-8 months), consistent follow up by a competent, highly trained, and relentless sales staff. As well as accepting the reality of the selling cycle
(about 120 to 180 days) and a realistic lead generation budget to pursue a professional and sustainable franchising recruiting effort. Your brand will NOT “sell itself.”

The Reality is that consistency in lead flow is also essential. I have seen many start-ups and emerging brands take a hiccup approach to franchise lead generation. This approach is terrible not only because you have empty spots in your pipeline but also because an ebb and flow in the advertising plan sometimes may cause the “brand” to disappear for a while and send the franchise buyers a less than confidence inspired massage. For a start-up or emerging brand, this is the equivalent of a jet airliner “pumping the brakes” to save fuel while attempting to “take off.” It usually leaves a mess at the end of the runway.

Royalties will make you the King or Queen
For me, the most important thing for a start-up or emerging brand to remember is the “value” of your franchisee over the lifetime of the franchise agreement. The Reality is; if you calculate the royalty return over that period, you will see the real reward of consistent lead generation and awarding a franchise. Calculate your Royalties on your AUV’s by the number of years you expect your franchisee to be in business, and it’s obvious. Do the math. Keep that in mind, and you won’t think the “Cost Per Acquisition” is too high unless you are attempting to “fund” your new franchise company from the upfront franchise fee collected. Funding your growth solely with the Initial Franchise Fees is never a good idea.

You should be in the franchising business for the royalties and the eventual exit, not the franchise fee. News Flash, focusing on the collection of Franchise Fees doesn’t work and often puts not only the franchisor in jeopardy of failure but also the franchisee. When you focus on the franchisee’s success, you will build a better organization, better equipped to support your franchisee. Successful franchisees paying long term, residual income from ROYALTIES is the way to BUILD YOUR BUSINESS.

A bigger “kiss” at the end
The Reality is; the sale of franchise companies (especially to Private Equity firms) have proven time and time again, that multiples paid on Royalty driven EBITDA at exit are more significant than the multiple typically offered on EBITDA derived from company operations. That’s because it’s scalable at a faster pace and with a lower cost.

Building a franchise business as a Franchisor requires a great concept, a comprehensive system, manuals and training, proven results, capital, planning and patience. If you remove any one of these components the journey may be an endless winding road with no clear direction.Talk to us to get started.

For more information, visit our YouTube channel and watch the videos titled:
“Using Digital to Sell More Franchises.”
“Private Equity and Franchising.”
https://www.youtube.com/channel/UCy6HZTtVYfsO9o8fBFMnZww

Contact us at [email protected]
Explore our entire website: www.franchisegrowthsolutions.com

It’s Harvest Time – Tips On Selling Your Franchised Business

You have used the franchise system, brand, and people to build your business. Don’t be afraid to use them to exit.
They have a critical interest in a successful transition. Use them to help you close the deal.

In today’s post, Tom Spadea, Founder and Partner in Spadea-Lignana Franchise Law shares his thoughts on the best way to sell your existing franchise business. As you might imagine there are steps that you need to be aware of while moving through this process. Working with your franchisor is just one way to expedite and ensure a smooth transition. Selling your business is a big decision. If you’ve worked with the end in mind then it should be a payoff, not an act of desperation. The payoff after years of smart work should be reflected in the multiple paid on EBITDA from an eager buyer who sees value. One thing I’ll remind you; Buyers want “potential” but they don’t often actually pay for it. Smart buyers will pay based on a specific set of guidelines to determine “valuation” or “enterprise value” which directly equate to selling price and price paid. This article explores best practices and tips when selling your franchise.

Franchise Attorney

Where Do I Start if I Want to Sell My Franchise or Buy an Existing Franchise?
By Tom Spadea – Spadea Lignana Franchise Law

If you have made the decision that now is the time to exit a franchise, you need to accomplish three critical things before placing your business on the market. If you are interested in buying an existing franchise, it’s also important to understand these three factors because it can affect how you move forward.

1. Discuss Future Plans
First, you should discuss with your franchisor what your plans are. All franchise relationships eventually come to an end. You are probably not the first and won’t be the last franchisee to exit the system. You have used the franchise system, brand, and people to build your business. Don’t be afraid to use them to exit. They have a critical interest in a successful transition. Use them to help you close the deal. If you have a specific reason why you think telling the franchisor will compromise your exit, then you should discuss that with your franchise attorney. If you don’t have an attorney that you are comfortable working with, please give us a call for a free initial consultation at 215-544-2452.

2. Gather Documentation
Second, you need to gather documentation and clean up any inconsistencies, errors or omissions in your paperwork. The list is extensive and you can never have too much documentation. Buyers will take lack of documentation or documentation they have to fight to get as a sign of trouble and it will break down the trust between you. Not only will it potentially affect your value, it will cause unnecessary delays.

In a small business transaction, the trust between the buyer and seller is critical. Without trust, the deal will not happen. The way you can build trust is by having all the documents readily available for any buyer who is serious about making an offer. You need to tell a story to the buyer, and that story has to be validated by documentation.

Read the entire article here: https://www.spadealaw.com/franchise-law/buying-or-selling-an-existing-franchise

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About Tom Spadea
Tom Spadea spent more than 15 years in corporate and entrepreneurial positions before completing law school at Temple University’s Beasley School of Law. His undergraduate degree is in finance from Marquette University, where he graduated Cum Laude. Tom is a Certified Franchise Executive (CFE), a non-legal designation earned from the International Franchise Association. He has also been named a “Legal Eagle” by Franchise Times, a distinguished award recognizing Tom as a leader among his peers in franchising.

Tom is the founding member of the Philadelphia Franchise Association and is the current President and Chairman. The Philadelphia Franchise Association holds quarterly networking and educational meetings, bringing together franchisors, franchisees, and suppliers.
Read more about Tom here: https://www.spadealaw.com/attorney-profiles/tom-spadea
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If you’re considering selling your business or buying a business contact Franchise Growth Solutions.
We can help you sell you business quickly and at the highest possible price.
Contact: [email protected] and visit: www.franchisegrowthsolutions.com. We can help!

Key Points To Consider When Securing The Right Location For Your New Restaurant

Gather data on the type of people living in the area. For example, if you’re planning to open a hip hamburger joint, you want a younger demographic, which might be present near a college campus. Do the people in the area like the type of cuisine you’re going to serve?

By Gary Occhiogrosso Managing Partner, FranGrow & Forbes Contributor
Photo by Louis Hansel @shotsoflouis on Unsplash

How many times have you seen new restaurants open their doors only to close them six months later? Ever wondered why? Among the top 3 reasons is improper location selection. The most successful restaurants are not only those with a great concept, outstanding food, legendary service but also the perfect location.

I spoke with David Simmonds the Founder & President of RESOLUT RE. He shares his insights on some key factors to consider when looking for the perfect restaurant location.

Here are some critical points to evaluate when selecting a restaurant location.

Conduct a Thorough Location Analysis
To be a successful food service establishment, the restaurant must fit the demographics; the restaurant needs to be accessible to the type of guests that live and work in the market it serves. Location analysis is an in-depth look at the general area you’re considering for your establishment. Gather data on the type of people living in the area. For example, if you’re planning to open a hip hamburger joint, you want a younger demographic, which might be present near a college campus. Do the people in the area like the type of cuisine you’re going to serve? Going back to the same example, an upscale seafood restaurant is probably not going to be a popular choice for most broke college students. Examine what types of businesses have been in the location you’re seeking in the past. It’s essential to understand why those previous restaurants failed to ensure you don’t repeat their mistakes.

David Simmonds, recommends “Know who your customer is- what he/she looks like from a demographic and psychographic perspective. One can accomplish this from the analysis of customer data from existing locations, or one can make as educated of a guess as possible. We recommend hiring a qualified professional who has access to different platforms of data that identifies the many characteristics and behaviors of people in defined areas.”

Also, the size of the local population is essential. You need to assess the number of customers you’ll need for your restaurant to remain profitable. Can the area sustain those numbers? The individual restaurateur can find many of these demographic data points, but Simmonds states: “While there are databases of comps available to people within and outside of the commercial real estate industry, nothing beats a CRE professional who is very active in the subject market and has relationships to obtain comps that are recent and pertinent.

Don’t Forget The Basics
In addition to the location analysis, there are some critical fundamental factors also to consider. Unless you’re going to open your restaurant in an extremely high foot-traffic friendly part of town, you’ll need an easy access parking lot as close to your restaurant as possible. Additionally, the side of the street you’re on relative to the traffic flow matters as well. If people need to make a left turn ten feet from a busy intersection to get into your parking lot, they may go elsewhere. Customers love convenience, so you must build that into your restaurant footprint.

Other things that matter include the overall safety of the area, as well as whether the entrance to your restaurant is openly handicap accessible. Your patrons need to feel safe and secure, and they need to be able to easily access your building, even if they require the use of a walker or wheelchair. You need to diligently go over each one of these factors when examining possible restaurant locations in your area.

Everything is Negotiable
To lease or to buy? This can be a tough but crucial question. You need to seriously weigh the pros and cons of leasing space or buying one outright. It may come down to your budget and how much you plan to spend on the remodeling and to set up your new space, as well as how much you have available to pay as rent or a mortgage. There are pros and cons to both leasing and buying. Leasing is a much more flexible option as far as the future of your business is concerned since it enables you to change locations (depending on your lease, of course) without having to worry about resale values or investing large sums of cash as a down payment. However, leasing requires knowledge in a lease negotiation. When asked about what can be negotiated, David Simmonds points out, “Absolutely, everything is negotiable, in theory. Of course, the extent to which landlords are negotiable depends on the type of business being talked about for the space, the credit and financial history of the person or entity that would be signing onto the lease, local market conditions, and each landlord’s current position in the property and goals for it.”

Another negotiable point is how much free rent time you can secure from the landlord so you can build out your space without paying rent. Simmonds answers it bluntly, “As much as you think you can get away with, without aggravating the landlord enough not to respond at all. Again, this is where a qualified professional with a thumb on the pulse of the market earn their money.”

Exclusivity For Shopping Center Locations
If you’re considering opening your restaurant in a shopping center, you’ll want to negotiate some measure of exclusivity with the landlord. This will prevent another restaurant featuring the same cuisine from opening in the same shopping center. I asked David if this is a realistic expectation from a restaurant tenant. He explains it explains this way: “Typically- yes, but again, this will depend on a myriad of factors: type of restaurant, credit/financials on the lease, local market conditions; meaning how much of a landlord’s market it is, how big the center is and what tenant mix the landlord would like to see in the center.

On the other hand, if you can afford to buy a piece of property or an existing building, you won’t have to deal with any potential landlord issues or rent increases. It’s important to weigh all factors specific to your situation and location before signing a lease or buying space.

Take Your Time to Secure the Perfect Spot
Using a professional commercial broker can accelerate the process, but patience is a necessary component. Though it may be difficult, don’t rush through the process. It’s completely normal to feel pressured into finding a space and jumping right in, but settling for a location that seems to be just “good enough” simply won’t cut it. The perfect space for your restaurant is out there, so if it’s a success you’re seeking, wait to find the right location, then snap it up!

ABOUT: David Simmonds

David Simmonds founded RESOLUT RE in January of 2009 and has since built a massive, international, 3rd-party, brokerage platform. RESOLUT has 6 offices across Texas (Dallas/Fort Worth, Houston, Austin/San Antonio, McAllen, Midland & El Paso), and services the great states of Louisiana out our Lafayette office, and New Mexico out of our offices in Albuquerque and Sante Fe.

RESOLUT RE represents over 40 tenants nationally, in Mexico and in Canada. We have the ability to service our clients’ expansion needs anywhere in the United States and up to 77 countries around the globe.

RESOLUT RE markets over 800 projects and exclusively represents over 250 tenants regionally across Texas, New Mexico and Louisiana.

David is a member of the International Franchise Association (IFA) and the International Council of Shopping Centers (ICSC) and received a Bachelor of Arts degree in Economics from Columbia College/Columbia University in New York City.

George can help you move out of the city and into a spacious home in the suburbs or find the perfect business location. text George at 201-245-3550 for a private consultation.

Financing a Business? – What You Need to Know About SBA Loans

Photo by Vladimir Solomyani on Unsplash

Many people are often misled to believe the money from an SBA loan is essentially “free.” That the funds are provided with the help of government grants and no-interest offerings; however, that is not the case.

Financing a Business?
What You Need to Know About SBA Loans

By Gary Occhiogrosso – Managing Partner, Franchise Growth Solutions, LLC

Whether you’re taking the plunge and starting a small business, or you’re interested in purchasing an existing one, or buying a franchise, you may benefit from utilizing an SBA loan program.

What Is an SBA Loan Program?
The Small Business Association (SBA) 504 Loan, also known as the Certified Development Company (CDC) program, was created to assist small businesses with the financing of their startup or growth. SBA loans are used to purchase everything from franchises to equipment to inventory. The SBA loan program was also created to help eliminate the “risk” banks take.
Through an SBA loan program, applicants can take out loans at below average market rates, which makes it an affordable option for small business owners.
Because of the complexities, it’s crucial to speak with a lending officer at a local bank. They may offer many options. Often, SBA loan benefits go untapped because many people are unaware of the program. In some cases, the information is not generally provided upfront.

Who’s Eligible
Only small business owners are eligible for an SBA loan. Specifically, their business’s net worth must not surpass $7 million, and their income cannot be more than $2.5 million in the preceding years.
Applicants must be able to provide records from the past two years that show stability and income, and they must have a credit score of at least 650. However, it also helps if the applicant has a background in the field of business they wish to start.

Setting the Record Straight
Many people are often misled to believe the money from an SBA loan is essentially “free.” That the funds are provided with the help of government grants and no-interest offerings; however, that is not the case.
Like any loan, SBA loans are offered through banks, but only SBA-approved banks can offer the program. You do not pay the SBA back; you pay the bank back directly.

Undoubtedly, taking advantage of an SBA loan can be a game-changer in the world of small business. If your interested learning about funding your new business please contact us at [email protected] – We can schedule a call.

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Sources:
https://www.smartbizloans.com/requirements-eligibility
https://en.wikipedia.org/wiki/SBA_504_Loan
https://www.entrepreneur.com/article/79254
https://www.sba7a.loans/sba-7a-loans-small-business-blog/2017/12/1/sba-7a-loan-for-a-restaurant

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About the Author
:
Gary Occhiogrosso is the Founder of Franchise Growth Solutions, which is a co-operative based franchise development and sales firm. Their “Coach, Mentor & Grow Program” focuses on helping Franchisors with their franchise development, strategic planning, advertising, selling franchises and guiding franchisors in raising growth capital. Gary started his career in franchising as a franchisee of Dunkin Donuts before launching the Ranch *1 Franchise program with it’s founders. He is the former President of TRUFOODS, LLC a multi brand franchisor and former COO of Desert Moon Fresh Mexican Grille. He advises several emerging and growth brands in the franchise industry. Gary was selected as “Top 25 Fast Casual Restaurant Executive in the USA” by Fast Casual Magazine and named “Top 50 CXO’s” by SmartCEO Magazine. In addition Gary is an adjunct instructor at New York University on the topics of Restaurant Concept & Business Development as well Entrepreneurship. He has published numerous articles on the topics of Franchising, Entrepreneurship, Sales and Marketing. He was also the host of the “Small Business & Franchise Show” broadcast in New York City.
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Leads – A Never Ending Challenge For All Companies

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He explained that through his experience and the help of a little sonar gadget on his boat, that he knew there was a shoal of fish below. We all slung our rods over the side and dropped our lines.

Fishing for Leads – The 5 Steps
By: Peter Lawless

The first thing that I noticed when I got onto the small boat at the harbour in Enniscrone, Co. Sligo, was the cleanliness and order of the boat. The skipper in charge had all of the rods, upright, with their lines neatly tucked away, in holders. The holders were made out of piping, about 30cm long, which had been welded to the side of the boat.

A simple, inexpensive aid had made me sit up and pay attention. This skipper thought about his customers, and this device left a strong impression. We then got a very short lecture on safety, checked we had our life jackets on, and off we went. About 12 of us!

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Finding your target market
About 12 minutes later, the skipper stopped the boat, and told us we should find some mackerel here. He explained that the lures on the hooks looked just like what mackerel wanted to eat. It certainly was not something I would have fancied!

He explained that through his experience and the help of a little sonar gadget on his boat, that he knew there was a shoal of fish below. We all slung our rods over the side and dropped our lines.

Reeling in the sale
Now I don’t know about you, but this was totally new to me. I wound up the line frantically, as soon as I felt a tug, and hey presto, there were three fish dangling off the hooks. I started flailing about, one jumped off before I even got it in over the side, and when I was trying to reel it in the final bit I lost another one. The one that I got in, I lost down the gutter when I finally got it off the hook.

The skipper explained to me, that once a fish took the bait, I should give a quick tug on the rod, to make sure it was firmly hooked. I should then take my time, to reel it in. Secure the rod in the holder, with the fish hanging over the bucket and deal with them one by one – I did, and I ended up with 20 fish, which delighted me, as I had set a target of 10, since my friend had caught 9 on his first time

So what are the lessons for marketing – if you are still with me, and have not already got most of them, here they are in business speak;
1. Set goals and targets that are realistic, and based on some valid foundation or research.
2. Have simple procedures set up, to make it easy to operate and for your customers to conduct business with you.
3. Speak in your prospects language, about what they want – it’s a bit like the fish bait, unlikely that strawberries and cream will catch many mackerel!
4. Once you know what your prospects like, find out where they are, do some research and target them accordingly – as in our example, not much point in putting down shark bait in a shoal of mackerel.
5. Once you get your customers attention or have a lead, qualify it, and ensure you follow up at all time to close the sale. Again the use of a good sales process is essential here.

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The bottom line, if you know what problems or desires your customers have, and you can solve or fulfill these, while providing value for money, you will always be a winner.

And if you don’t know the answer to that question, go ask the people who have already bought from you – they do!

Author Bio
Business Owners who need more sales and better marketing advice, turn to Peter Lawless, of 3R Sales & Marketing. For previous articles and interviews like this, visit our website and subscribe to Success. We also provide free Sales & Marketing Assessments for Business Owners with an Irish Connection.

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Organizational Tips To Keep A Small Business Pointed Towards Success

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I firmly believe that the healthiest small business is the one that visits and reviews their organizational systems every six to twelve months. The small business that keeps doing the “same old, same old” is losing money. So where do you stand?

Being Organized Equals Small Business Success
By: Patty Kreamer

You started your own business because you have a burning passion for what you do. You are also – we hope — good what you do and have a desire to help others. Little do you know that running a business includes, well…running a business. This little bombshell can throw many a new business owner for a loop.

I receive numerous phone calls every week asking me how to start a business as a professional organizer. The first thing I say is that the organizing part is easy because it is a natural gift (sometimes a curse); it’s running the business that can trap you. This is not to scare a potential entrepreneur away, but to help them realize that it’s not all fun and games doing what you do best. You have to:

* Buy insurance
* Get legal advice on how to set up your business
* File for the company name with the state
* Find working capital if necessary
* File all the proper tax forms
* Open up a checking account
* Get office supplies
* Market the business
* Build a network
* And the list goes on and on…

In the initial start-up stage, entrepreneurs are often so excited about starting a new business that they pay little or no attention to what is happening with all the paperwork and electronic data you are generating. That is typical and expected. However, around the six to twelve month mark, entrepreneurs start calling people like me – a professional organizer – begging for help in setting up a system to help them be organized. I envision a hand protruding from mounds of papers reaching for help.

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The sad news is that many small businesses have never taken the time to set up systems once they’ve built up paper and electronic backlogs. They just keep generating documents without stopping to assess what is being created.

I firmly believe that the healthiest small business is the one that visits and reviews their organizational systems every six to twelve months. The small business that keeps doing the “same old, same old” is losing money. So where do you stand?

Something that has really hit home in the past year or so is that you don’t GET organized and have long lasting success. You have to BE organized. Getting organized is a quick fix of cleaning up and putting things away – usually a Band-aid (r) approach – that doesn’t last for more than a few days.

Being organized is recognizing that organization is an ongoing journey. Life doesn’t stop happening the minute you GET organized. You have to have systems in place that will help the daily flow; a lack of systems will cause clogs. These clogs come in many forms:

* Piles of papers
* Lost documents
* Misplaced items – glasses, phone, pens, keys
* Running late
* Stress and frustration…

You get the picture.

When it becomes clear to you that you are running through your day feeling like you’ve accomplished nothing, you may need to reassess your organizational skills and systems.

Your small business must overcome many hurdles to be successful. Fortunately, being organized is one hurdle that you can learn to overcome. Or you can work with a professional organizer to set up customized systems that make you functional, productive, and more pleasant to be around.

I challenge you take a deep look at the state of your small business’ organization. If you see your passion being overrun by disorganization, it’s time to take some action.

Here’s to simplifying your life!

Author Bio
Patty Kreamer, owner of Kreamer Connect, Inc., is a professional organizer, speaker, and author of the Making Life Simple… Again! e-course available at http://www.ByeByeClutter.com/MLSAHome.htm. If your business or organization is looking for a fun, dynamic, and effective speaker, you can email Patty at [email protected] or call her at 412-344-3252.

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How To Start Your Own Daycare Center And Be Your Own Boss

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When you first decide to open up your own daycare, you need to check with your state and government agencies to find out what rules and regulations you need to follow. For example, you are only allowed to have a certain number of children per square foot of space your building has, so you need to know this right off the bat.

Start Your Own Daycare Center- Be Your Own Boss
By: Susan Anderson

Many people are now looking for ways to get out of today’s corporate business world, and to become their own boss. One way that some have been successful is by opening up and running their own day care center. More moms than ever before now have to return to work after their baby is born. Few families are able to make ends meet on one income. So, why not start your own center that caters to these busy moms, and open up a loving and safe place where they can leave their young babes and go to work knowing that will be well cared for?

When you first decide to open up your own daycare, you need to check with your state and government agencies to find out what rules and regulations you need to follow. For example, you are only allowed to have a certain number of children per square foot of space your building has, so you need to know this right off the bat. You will need to locate a site that is large enough to house the number of children that you plan to care for. Many have been successful with purchasing actual homes, and making any needed renovations. You may also have some luck with your local churches or city organizations, either with locating a space, or possibly leasing space from them. It is crucial that you pay attention to all of the zooming rules in your area, so you don’t rent a place, then find out you are not allowed to run a business out of it. It does take quite a bit of overhead to open up your own center, a lot of which goes into getting the location you need.

You will need to try and locate funds to get everything you need. Develop a business plan, and set it before your local Chamber of Commerce, local churches, and businesses. If you have a sound plan, and they feel that the community needs your center, they may help you with funding your endeavor. You may also look into getting a business grant from the government, as this would save you from having to make large payments before your business ever gets off the ground. You can find additional resources online or at your local library that should be able to help you with locating funding, other than taking out a bank loan. If all else fails, then try to get a business loan, but there are better resources available to you, you just have to know where to find them at. If you have an empty store in your area, this may be the ideal place for your daycare center. You may have to do some work to the inside to make it meet your needs, but you should be able to rent it at a reasonable price, especially if it has been vacant for a while. This would also give you the advantage of having a good location, as it would probably in a highly trafficked area of your town, which would be convenient for your clients.

Once you have pretty much gotten everything down as far as laws and your location taken care of, you will need to advertise your new center. One of the best ways to do this, especially if you are on a busy street, is to have a nice sign up that states your business name and that you are accepting children. You will also want to let people know the hours your center will be open, and what days of the week, and most importantly, have a contact number shown. If you can’t get all of this information on your sign, at least have your business name, hours, and phone number, then potential customers can call you for more information. You may also want to drop off fliers at your local pediatrician’s offices, schools (get permission first), or maybe run an ad over your local radio station or newspaper. If you don’t let people know what you are offering, and get the word out, how can you expect to have clients?

Another major decision to make is choosing what hours your day center will be open. If you really want to make an impact, I would recommend being open outside of the normal business hours, maybe opening at 5 or 6 am, and staying open until around 7pm. This would help you get clients that many other daycares are unable to cater to, giving you more customers. Keep in mind, that you will most likely need to provide meals, so if you are open the above hours, you will probably be serving three meals a day. You will want to make sure you remember that when you determine what the cost per child will be. Remember that you also will need to provide at least two healthy snacks a day. Let your parents know what you will be offering, so they will know what they are paying for.

Children tend to do best when they have set routines, so you will need to make a basic daily plan, and give your teachers and parents a copy. It is important that you plan the day according to the age range of the children. Include in a rest or nap time, or two for the younger ones. You will also want to have some learning activities, arts and crafts, outside time, free play time, and story time. If you will be accepting children that are working on toilet training, you will need to set aside specific time slots in the day to be potty time as well.

When you know how many children you will have, and what their ages will be, check your local rules and federal laws to find out how many teachers you need. Depending on the children’s ages, you need one teacher for every so many kids. When hiring your teachers, look for moms or young adults that have taken some early childhood education courses. You want to try to get certified teachers, if possible, to ensure that you not only have a caring center, but one that offers learning opportunities as well. If you can fit it in your budget, it is also a good idea to have some kitchen staff, maintenance people, and possibly even a nurse or CNA on staff in case of emergencies.

All parents will need to fill out medical forms for their children, letting you know their history and of any known conditions or allergies. You will need a release to seek treatment form, the child’s insurance information, contact numbers for the parents in case of emergencies, and contact info for the child’s doctor. It is important to be prepared in advance, in case any emergency situation did arise.

Your center will need to have a designated outside play area, equipped with safe, sturdy toys for the children to play with. This are should be fenced in with locked gates to protect the children. You will want to have swings, sandboxes, slides, any kind of outside equipment you wish, as long as it is safe, and age appropriate.

Stock the individual rooms with toys, books, games, televisions, educational movies, maybe a computer or two for the older children, anything that you wish to have on hand for the teachers and children to use. You will need to have an eating area in each room, and a place for naptime, diaper changes, etc.


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When dealing with parents and financial issues, you will be better off asking them to pay the month or week in advance. By having them pay ahead, you aren’t dependent on them for the funds to buy needed supplies, or pay teachers, and don’t have to worry about losing children due to non-payment. A lot of daycare centers have to close because they financially cannot make ends meet, usually due to parents not being able to pay them when payment is due. Let parents know that you need them to pay in advance so that you have sure funds to use to care for their children with.

You may want to run the center yourself for the first little bit, to keep costs down, and to ensure that everything is running as you want it to. Eventually, when profits rise, and everything is going well, you may want to hire a manager to oversee the day to day running of the center for you. They would be responsible for hiring teachers, taking care of new customers, purchasing supplies, planning lesson plans, meals, etc. You basically would sign the checks, and still make all of the major decisions, but would free to pursue other endeavors if you wish.

Every community could benefit from a well-run daycare center, and with a little patience, and effort you could be the one to give it to them. Just make sure that you follow all of your local, state, and federal laws regarding childcare centers, and that the safety of your children is your number one concern. Everything else will pretty much fall into place over time.

Author Bio
Susan Anderson enjoys writing articles for families and consumers which are informative and adds value to their lives.

For more information on how to create a great monthly income by opening your own daycare center, visit www.nipty.com/daycare

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