Phased Investment Needed to Grow Businesses
10 years ago
Thursday, February 26, 2009
SBA Goodwill Financing Update
Check out this article in the Washington Post http://www.washingtonpost.com/wp-dyn/content/article/2009/02/26/AR2009022601375.html?hpid=moreheadlines
Sunday, February 22, 2009
Caring Transitions Franchise in Lexington Available
The owner of the franchise territory for www.caringtransitions.net has the territory in an inactive status and desires to sell it . This can be a low investment homebased business with multiple revenue streams . Contact me for details .
Friday, February 20, 2009
SBA proposed goodwill financing changes
It appears that the SBA is going to delay their planned SOP change from March 1 until August 1 in order to give the SBA time to discuss the issues with knowledgeable parties . The proposed change would limit effectively limit the amount of financiable goodwill to $250,000 . This , in the opinion of many , would marginalize the SBA and make them less relevent in the financing of small business transactions . Here are some points to consider :
Businesses are sold based on cash flow, not tangible asset value…..just as publicly traded companies are valued based on a price to earnings ratio, not a tangible net worth. By limiting goodwill, the SBA is essentially eliminating the financing for the sale of most businesses.
When a small business is sold, it often represents saving the jobs in the firm. Just closing the business, or slowing down, as the owner ages, costs jobs.
New owners, financed by the SBA bring renewed passion and ambition to the company. This often results in significant sales growth, and job creation.
If a legislator does not think that is true, I have a very interesting statistic. At a break out session at the IFA convention in San Diego, February 2009, it was disclosed that system wide, when a franchised business is sold to a new franchisee, the first year’s sales average approximately 25% higher than the last year of the outgoing franchisee. Franchisors track metrics carefully, so we now have real data supporting item 3.
Always bring in the following statistic about small businesses. It is known that 50% of all jobs and about 70% of all new jobs are in small businesses. Small businesses are also the largest customer segment for large businesses. A whopping 0.08% of the stimulus package was earmarked for small business. There is a major disconnect here!
The Senate version had the 7-A SBA loan limit raised to $3 million. But in committee, the Congress prevailed. It did not require any additional funds to have this higher cap. But the Congressional Small Business Committee, chaired by Congresswoman Velasquez from Brooklyn, New York, is dead set against it. We need to get this issue back on the table. We need to educate President Obama about this issue, so he can begin to change the committee/’s orientation on it. But….right now, this issue is less important that the goodwill cap issue.
I have shared my concerns with Congressman Chandler and urge others to do the same .
Businesses are sold based on cash flow, not tangible asset value…..just as publicly traded companies are valued based on a price to earnings ratio, not a tangible net worth. By limiting goodwill, the SBA is essentially eliminating the financing for the sale of most businesses.
When a small business is sold, it often represents saving the jobs in the firm. Just closing the business, or slowing down, as the owner ages, costs jobs.
New owners, financed by the SBA bring renewed passion and ambition to the company. This often results in significant sales growth, and job creation.
If a legislator does not think that is true, I have a very interesting statistic. At a break out session at the IFA convention in San Diego, February 2009, it was disclosed that system wide, when a franchised business is sold to a new franchisee, the first year’s sales average approximately 25% higher than the last year of the outgoing franchisee. Franchisors track metrics carefully, so we now have real data supporting item 3.
Always bring in the following statistic about small businesses. It is known that 50% of all jobs and about 70% of all new jobs are in small businesses. Small businesses are also the largest customer segment for large businesses. A whopping 0.08% of the stimulus package was earmarked for small business. There is a major disconnect here!
The Senate version had the 7-A SBA loan limit raised to $3 million. But in committee, the Congress prevailed. It did not require any additional funds to have this higher cap. But the Congressional Small Business Committee, chaired by Congresswoman Velasquez from Brooklyn, New York, is dead set against it. We need to get this issue back on the table. We need to educate President Obama about this issue, so he can begin to change the committee/’s orientation on it. But….right now, this issue is less important that the goodwill cap issue.
I have shared my concerns with Congressman Chandler and urge others to do the same .
Thursday, February 19, 2009
Saturday, February 14, 2009
Bimpie Sub and Salad Shop
The Blimpie Sub and Salad Shop in Palomar ( Lexington Kentucky ) is for sale . The owner desires to retire and this is a very established business in a nice shopping center . The asking price is $79,000 .
Kentucky Spring Green Franchises
I am working with www.spring-green.com to grow their presence in Kentucky markets like Louisville and Cincinnati . This can be a home based business which means low overhead. It is also a high margin business . Contact me for details .
Wednesday, February 4, 2009
Newport , KY restaurant property available
A restaurant property in Newport , KY is available for purchase . It includes real estate and all FF&E . The second floor can be used for an apartment or extended stay rental .
Asking price is $400,000 and the restaurant once operated as Lightfoots .
Contact me for details .
Asking price is $400,000 and the restaurant once operated as Lightfoots .
Contact me for details .
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