Hughes Properties Blog

Information on Buying and Selling Businesses

8 Books Every Entrepreneur Should Read in 2015

My dad always used to tell me that the difference between the “you” now and the “you” 20 years from now will be the places you visit and the people you meet. I would also add baldness and gray hair to that, but they don’t sound as cool.He was right. Whether you meet someone in person or read a book he or she authors, people are pivot points that enable learning and foster personal growth for others. via 8 Books Every Entrepreneur Should Read in...
Bring Donuts: The Secret To Effective Customer Development – PR Tips For Startups

Bring Donuts: The Secret To Effective Customer Development – PR Tips For Startups

Bring Donuts: The Secret To Effective Customer Development Today was an exciting day because I helped a client “get out of the building,” and solicit product feedback from strangers. For those who follow startup guru Steve Blank, “getting out of the building” i means actually leaving your desk (gasp), risking rejection, and putting your idea before the public. It can be a nerve-wracking experience for an introverted, product-focused entrepreneur, but it’s invaluable. We were armed with two dozen donuts, hot coffee, warm smiles and our assumptions. Turns out donuts were a smart move. The pastel pink pastry box is a trigger and people know what’s inside, even when they didn’t want to eat the donuts. via Bring Donuts: The Secret To Effective Customer Development – PR Tips For Startups. Posted by Chikodi Chima in Customer...
What the Sharks on Shark Tank Can Teach You About Your Business

What the Sharks on Shark Tank Can Teach You About Your Business

Understanding what prominent investors look for in companies can help your business succeed. November 10, 2014 For most small-business owners, an appearance on the reality show Shark Tank is most likely far from their list of top 10 business priorities. But for almost all small-business owners, appearing on the show is a great opportunity to get a free education on what’s important in business. Shark Tank, which has been around since 2009, offers aspiring entrepreneurs the opportunity to pitch a business idea to five investors (the “sharks”) in the hopes of getting one or more of them to invest in their ventures.Over time, the Shark Tank cast has varied a bit. The current lineup of sharks includes: Mark Cuban, a successful Internet entrepreneur and current owner of the Dallas Mavericks basketball team; Barbara Corcoran, a New York City real estate mogul who started her now-multibillion dollar business with a $1,000 loan; Lori Greiner, an idea woman who’s made a fortune creating new products and selling them on her QVC show; Robert Herjavec, a “rags to riches” entrepreneur who found business success in the technology industry; Daymond John, founder of the design brand FUBU, who’s now considered a fashion mogul and is a much-sought-after branding and business expert; and Kevin O’Leary, a venture capitalist who made his fortune in software educational products. Each shark started from humble beginnings and built their fortune from the ground up. They know what it takes to be successful, and they apply that knowledge to determine which opportunities are good investments for them to take on. On every episode, there’s a pattern to the questions the sharks...

5 Reasons to Make Starting a Family Business Your New Year’s Resolution

Image credit: Mays Business School at Texas A&M University | Flickr December 19, 2014 A new year is an opportunity for a fresh start in your business and family life. There are good reasons to consider combining the two in a family business. All of the family business owners I’ve interviewed have been frank about the challenges of running a family business and have shared how to avoid pitfalls. The consensus is that it’s rewarding and worthwhile, if you can make it work. A few shared that it saved their family from breakups and economic devastation. Here are five reasons why you should give the idea of owning a family business your full attention: 1. Represent your culture. T&T Supermarket Inc. is an Asian supermarket chain that has been operating for over 20 years. Cindy Lee, CEO, was a housewife with few options to cook traditional foods and decided to solve the problem with a family business. She works with her daughter, Tina Lee, director of strategy and operations. Tina wants to be as successful as her mother, and views her family business as an opportunity to represent her culture. According to Tina, “Our mission has expanded to be an ambassador of Asian food and Asian cuisine. One of our challenges is to extend our customer base beyond the Asian family and grow it into the mainstream family as well.” Related: How Ethnic Brands Grow Beyond Their Niche 2. Leave a legacy. Jennifer Gannon operates BonaVista Pools, with her brother and sister. Her mother, Liz Gannon, is the principal owner. They build custom pools for world-class luxury brands. Her father built the business and left...

Stock or Asset Sale?

I often get this question when listing a business for sale, and almost all of the time, I recommend an asset sale.  What you need to grasp is the concept that when you purchase a corporation, you as the buyer simply step into the shoes of the former owners. In essence, you assume all liabilities such as taxes, employees, accidents, suppliers, and pending lawsuits or new ones that have yet to pop up. I personally found myself in this scenario a number of years back when I purchased the corporation of a fixed-wing airport business in Los Angeles.  Just a few months after the purchase I got a call from my bank informing me the state was in the process of cleaning out my account for back payroll taxes left unpaid by the previous owner. An expensive lesson I’m happy to share. On the other hand a stock sale can take place in a matter of days, and for many the speed of the deal can prove mighty enticing. All stock sales also require the services of an attorney for the stock transfer. However, I generally recommend taking your own good time, performing your due diligence and identifying as best as you can the status of any existing or potential liabilities. Even so there are times when both the buyer and seller desire a stock sale, and as long as both parties are aware of the potential issues it can prove a good fit. An example of this could be a current or former employee who wants to buy the business and is quite familiar with the operation and...

Spring Into A New Adventure

Venturing Into Running Your Own Business For many, Spring cleaning is a ritual not to be denied; there is a certain satisfaction in dusting off the cob webs, pulling out the garden tools and putting away the dark and heavy décor in favor of the light and bright. It signals a rebirth. But what about dusting off your own dreams and taking a good look at them in the light of a sunny new day? If you’ve ever thought the life of entrepreneur, proprietor, and boss would be a nice goal– why not dust that dream off and shine some light on the notion? Whether this is a whole new path, or one you’ve travelled before and are itching to get back to, the Hughes Properties web site offers a number of new and very exciting listings. A wide variety of listings await the right buyer. As you embark on this path of discovery, bear in mind that just as if you were buying a house, finding the top home realtor would be prudent-buying a business should be handled by a business broker. These are completely different fields of expertise, forms and regulations. Hughes Properties sells businesses, and more often than not, also serves the buyer. This experienced focus, along with a specialized business-focused escrow service, ensures a smooth transition from one party to the other. From liquor licenses to E2 VISAS, leases and even an action list of to-do’s to help guide you, Hughes Properties is here to help you spring into a bright new future. By: Bob Hughes Author Profile: Robert Hughes is a commercial broker and...

Seven Tips for Starting Your Own Business

By Robert Hughes Today, ABC news was talking about how, during this time where nationally the unemployment rate is at 10% +, more than ever people are getting their own business. There was a 27% increase over last year of people looking to be their own boss. Here are the summary of the tips they suggested: 1. Be clear why you want to own your own business. Small business ownership can be the best avenue of success with the highest potential for your greatest financial security. 2. Determine your business type. Put your own twist on your business based on your personal experience and the things that are of interest to you. You can buy an existing business that best fits your wish list then add your new energy and put your special stamp on it. Or you can take over a great location from one that currently doesn’t offer what you plan to, but that can be tailored to your plans. Either of these options often saves quite a bit in start up costs. 3. Create a simple business plan. Initially, create a one page business plan that covers what you offer, who you’re targeting, how much you’ll charge, and what you’ll do to make it happen. 4. Nail your target customer. The more you can pinpoint your targeted client, the more focused and effective your marketing efforts will prove in reaching them. 5. Perfect your pricing. Know what costs are associated with delivering your product. Review the existing pricing and analyze all the current costs. It does not require fancy charts, just play around with the numbers...

IS GOODWILL A GOOD THING?

How A Business’s Goodwill Establishes Price and A Solid Footing February 2013 Hughes News  Whether you’re a business owner about to sell your business or a buyer looking to buy a going business; there seems to be some confusion when it comes to “GOODWILL.” This is a key ingredient in the formula of a businesses’ value. Therefore, for a seller, it affects how much a business can be sold for. From a buyer’s perspective, goodwill indicates the likelihood of ongoing business operations and income from day 1. Goodwill often defines the price of a business. Here’s the formula in a nutshell; Asking Price LESS Market Value of FF&E’s (furniture, fixtures & equipment) = Goodwill Value. FF&E’s may include: 1. Market awareness of the business or its reputation in the community. 2. Phone number 3. Logo, web site and social media standings or rankings 4. Business name recognition 5. Location 6. Proprietary technology, patents or formulas 7. Customer lists 8. Vendor resources 9. Lease term and rate 10. Number of years in business 11. Advertising history 12. Trained employees and length of employment These factors paint a picture of the advantages of buying an on-going business, versus starting from scratch and facing what can be years of ups and downs until you establish yourself. The length of that learning curve and establishing period often surprises new business owners. Goodwill is at the core of a business’s value and often what makes it worth buying. Happy goodwill hunting.   Author Profile: Robert Hughes is a commercial broker and president of Hughes Properties, Inc. in Palm Springs. An MBA from USC, Hughes...

Escrow and Buying a Business

May 2013 Hughes News Escrow is the process required to complete the sale of a business. An escrow company becomes the neutral party that prepares all the necessary documents, holds the monies and, when all of the stipulations in the parties’ agreement have been met … closes escrow. Close of escrow entails issuing the buyer the bill of sale for the business and disbursing funds to the seller. When an offer is accepted and escrow is opened, this starts the due diligence period for the buyer. In most cases, this due diligence period is 17 days during which a buyer may acquire and review all of the documents associated with the business. In essence, the buyer is determining for himself that what is declared by the seller and what the buyer perceives about the business is true and acceptable. At any time during this due diligence period, a buyer may cancel and get his deposit back, minus any cancellation fee, including “out of pocket” expenses to date. To cancel escrow it normally requires the principals from both parties to sign a mutual cancellation. It could be said the purpose for escrow is to insure the parties involved that the business transaction is conducted with ultimate transparency and that all agreed-upon terms are met. This process may include: Publishing a Bulk Sale Notice State and County Title Search Current Vendor’s Payables Prorating of rents and security deposits Escrow also handles all the required paperwork, i.e: Preparing Escrow Instructions, clarifying the agreed-upon terms and timelines Preparing Closing Statements Preparing Notes, if required Preparing Bill of Sale ABC license transfer, if required...

What is a Business Worth?

Keeping It Real Whether You’re Buying Or Selling Printed in: The Public Record, February 2012 There are several industry-accepted methods used to arrive at the value of a business. Just rattling these off can make one sound, well let’s just politely say informed. 1. EBITDA– Earnings before depreciation (and other noncash charges), interest and taxes. 2. EBDT– Earnings before depreciation (and other noncash charges), and taxes. 3. EBIT– Earnings before interest and taxes. 4. SDE– Seller’s discretionary earnings. Just to make matters more interesting, a multiple, typically between 0 and 4 depending on the type of business, is then applied against the earnings to arrive at a value. It quickly becomes quite convoluted, yet the reality is that most businesses sell at a price that is market-driven based on a percentage of the business’ current sales. In my 10 years of valuating small businesses I have found that all these methods will pretty much get you to the same number. However, unless the business is a huge conglomerate, the best approach is the Seller’s Discretionary Earnings method, better known on the street as “Cash Flow.” By using this common sense approach, it seems both buyers and sellers have an easier time quickly grasping the value. An examination of the Profit & Loss statements will determine the SDE, or cash flow. By adding back many of the expenses that reflect the current owner’s personal allocation of the cash in the business, which would likely be different figures for you, you’ll arrive at a true picture. Add-backs to consider include profits, depreciation and amortization, interest fees, taxes, non-recurring expenses (such as...

ABC’s of ABC

When purchasing a restaurant, bar, liquor store, mini-market, wine shop, catering business, or any number of other businesses where the selling or serving of alcohol is involved-you will need to deal with the application process of the California Department of Alcohol Beverage Control Board. The ABC process is a necessary step for the new business owner whether you are stepping into an existing business or starting up a new one. In either instance the application process is fairly similar. A. Each county has its own ABC office. First go to your local ABC office and request the required paperwork that you will need to bring to your interview. B. After you complete the paperwork, contact the office to set up an interview. C. Once your paperwork is in order, you will be given materials to post on-site at your business for a period of 30 days. D. After the 30 day period, most required items should be completed, including the balance of the sale price into the escrow account. E. At this point, Escrow prepares ABC’s 226 form, confirming everything is complete for a transfer of the license to occur. F. The local ABC office will now review all of the paperwork before sending it onto Sacramento for the license to transfer into your name. This is the short and sweet version of the ABC’s of ABC. They have a web page which effectively covers the process, including a handy method of tracking the process of your application. The web site is www.abc.ca.gov and it is helpful to have the license number to track the progress. Do not hesitate...

Where Do Our Buyers Come From?

By Robert Hughes Just a couple of days ago I was surprised when the local newspaper asked this very question. A quick review of recent sales proved quite interesting. Buyers that have purchased businesses recently have hailed from: Alaska — Country Club Vacation Rentals Rome, Italy– Cactusberry Yogurt New York– Cal-Zone Pizza Montana– La Quinta Florist, Cathedral City Florist, Cathedral City Pets Washington State– Legions & Icons Reno, NV– Taragar Property Management San Diego– Benny’s Bagels Los Angeles– The Fall’s Steakhouse Cathedral City– Tooties BBQ San Diego & Banning– Basic Gym Dallas, TX– 21 Liquor License Banning-21 Liquor License Los Angeles– Dales’ Lost Highway (lease) La Quinta– Crush 111 (lease) … and several more in escrow that are out-of-area buyers. This just goes to show our clients are relocating to the Palm Springs area and are looking to purchase jobs. That is really what we sell. A quick look in any newspaper tells the same story; few jobs and mostly lower pay. If a person owns their own business they can determine their own income by the effort they put into it. With fresh eyes and a renewed excitement I always say that a new owner can increase a business’ income by 30. This country of ours has always been a melting pot, and in the case of Palm Springs, the community can only benefit from all the energy these new residents bring. Author Profile: Robert Hughes is a commercial broker and president of Hughes Properties, Inc. in Palm Springs. An MBA from USC, Hughes has a wide variety of entrepreneurial experience with the personal ownership and sale of...

BOB

Bob Hughes, Broker

Phone: 760-323-8311
or 877-7HUGHES
Email:
bob@hughesproperties.com
DRE #01341734

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NDA (Confidentiality Agreement)

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