Peninsula Small Business Talk

from the Peninsula Executives Association

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Posts Tagged ‘California Business Opportunities’

Money Saving Tips from PEA

Recently, PEA’s program committee had members discuss and share ideas for how to save money in their businesses.  Here are a few tips from them to you!

Interested in this kind of information and getting to know PEA? Learn how to join HERE and ‘Like’ us on Facebook!

Buying and Selling Businesses with Angelo Izzo, California Business Opportunities

Angelo Izzo, California Business Opportunities was born in New York and attended Syracuse University and Cornell.  He was a Professor of American History and worked in education for 20 years, including 2 years in South America.  Angelo took questions from the audience for his spotlight talk.

How do you determine the value of a business? Angelo explained it is a very convoluted formula that involves collecting and compiling facts about the business.

What are the advantages of a short-term vs long-term lease? It depends on you as an owner and your particular business.  If you feel more secure and stable, a long-term lease might be better.  If you are unsure about where your business is going or the area you are in, a short-term might be better.

What types of businesses do you sell? Angelo brokers all types of businesses, but he said the core set of business he works with are food and drink businesses.  He also works with many service-based businesses, like the medical billing company he recently sold.

How long does it take to sell a business? Angelo said on average, it takes 60-90 days to sell a business.  The quickest he has ever sold a business was in 26 days.  The length of time it takes depends a lot on if you already have an offer or if you need to list your business.

How can you build your business to be easily sellable? Angelo said the most important thing is to keep good books.  It is very common for a small business to have their financial records in disarray.  Angelo recommends organizing your financial records in Quickbooks.

How do you get the financing to buy a business? Banks generally won’t give a loan to the buyer.  The buyer must find their own financing, whether independently or through an agreement with the seller.

April Success Stories Round-up!

January 2012 Success Stories Round-up!

PEA businesses are starting 2012 off well!  Congratulations on everyone’s successes this month.

  • Bette Asbra, Pro-Staff Painting thanked Tom Brown, All Reasons Moving and Terry Pebbles, Optimum Floors.  Terry put in a beautiful hardwood floor for a client and All Reasons not only moved the furniture out for the installation, when they moved it back in they put on anti-scratch pads.
  • Dan Ingerman, Wemorph said that they just worked on designing a set for a TV show.  The TV show is based in Palo Alto and Dan will be talking about sustainability.
  • Larry Hassett, Hardware Stores took a car that needed body work to Scott Yeaman, Yeaman Autobody. He wrote a positive review for Scott’s web site, which entered him into a drawing.  Larry won a Flip Video camera, which he likes a lot.
  • Jon Maystrik, Arborwell Professional Tree Management had a great year last year.  Arborwell had great growth last year especially in Southern California.  Jon had a great year personally and thanked PEA for contributing to that.
  • Georgie Gleim, Gleim the Jeweler was in New York last week and wanted to report that the Christmas holiday season was good for them.  She thanked everyone at PEA who helped make that possible.
  • Richard Phillips, Advantage Career Solutions, says that this has been a good year so far for his clients.  One just signed off on a job as an IT Director with a pay raise.  Another was hired with a sign-on bonus at PayPal.
  • Albert Ong, Ambassador Services signed a big contract with Stanford.  He immediately had to go in with one day’s notice to clean carpets before a Saturday event.
  • Avi Safar, Footwear, Etc., said that December was a record month for them, especially in the Palo Alto and Los Altos stores.
  • Judy Johnson, Unexpected Treasures thanked Robin Azevedo, McRoskey Mattress Company for sending the most interesting new client in several years.  She also thanked Darnel Rogan, Saber Roofing for a lead on a job in Atherton.
  • Shawn McMillan, Connoisseur Coffee thanked everyone for the orders over the last week.  It has been 13 months since the fire and he is now hoping to re-open in a few more months.
  • Julie Fukuhara, Stern Mortgage says that in doing her business tracking at the end of the year, she saw that 25% of her business came through Yelp.  Anyone who doesn’t have a Yelp profile should be working to correct that.
  • Darnel Rogan, Saber Roofing thanked Bob Rosenberg, GR8WORK Builders, Inc. for a lead on job in Portola Valley.
  • Bobbie Fakkema, Events, Etc… thanked Jeff Badzik, Perfection Auto Detail for the beautiful detailing on her car.  She also thanked Laurie and Larry Moore, Larry’s Autoworks for going over her car (one of the things she bought at the Holiday Auction).
  • Carol Garsten, Nature Gallery said there is a good reason why you haven’t seen her at the meetings lately – she is moving the Nature Gallery to a new location in Los Altos.  The new address is 296 State Street, Los Altos.  She plans a Grand Opening on February 10.  She also reported that January was her best January in 25 years of business.  She thanked Georgie Gleim, Gleim the Jeweler for sponsoring her in PEA and suggesting the Los Altos location.  She thanked Dave Dove, Cassidy Turley BT Commercial, for helping her negotiate the lease in her new location. Finally, she thanked Susan Hamilton, VTF Services for the help with the plants.
  • Larry Moore, Larry’s Autoworks thanked Jon Maystrik, Arborwell Professional Tree Management for the beautiful job they did on their trees.   The neighbors came over and complimented the job.  Laurie Moore, Larry’s AutoWorks thanked Susan Hamilton, VTF Services, for coming over and taking piles of redwood chips from their tree trimming project.
  • Kaye Sharbrough, Senior Seasons thanked Dan Ingerman, Wemorph for the new Seniors Seasons sign-on-a-stand.  This solves an upcoming problem of needing to be in two places at once, thus needing a second banner.
  • Dr. Leta Zwiebel, Psychologist announced that last Wednesday was her last in San Mateo.  She is now only going to her San Mateo office on Mondays.  While she feared that her patients would be unhappy about this change, she got positive responses from them.
  • Gary Rudolph, Rudolph’s Interiors thanked Angelo Izzo, California Business Opportunities for his help investigating a business opportunity.

Where are Loan Rates? with Julie Fukuhara of Stern Mortgage

Julie Fukuhara, Stern Mortgage gave an overview of the current state of affairs in the loan market.  She likes to use Fannie Mae Japanese candlesticks charts to examine trends over time.  High rates on the Japanese candlesticks chart mean lower interest rates on loans.  Julie showed a chart that ranged from September of 2009 to the present.  While there was a big rise peaking around November of 2010, the current peak is the highest is the time period.  Julie says that the current interest rates are so low that she considers them rock bottom.

This is a big motivation for a lot of people apply for a loan or to refinance an existing loan.  Lenders continue to be very cautious in giving loans, although they do want to make loans to qualified borrowers.

A sobering note in this is the rate of foreclosures.  Julie showed a series of area maps with homes in foreclosure marked as red dots.  Here are some of the numbers:  Tampa, FL – 1 in 20 homes in foreclosure.  Sacramento, CA  – 1 in 19.  Bakersfield, CA  – 1 in 17.  Vallejo, CA – 1 in 16 (at these kinds of rates, red dots are beginning to resemble clusters of grapes).  Orlando, FL – 1 in 15.  Stockton, CA, Riverside, CA, and Phoenix, AZ  – 1 in 14.  Saddest of all is Las Vegas, NV with a foreclosure rate of 1 in 9.  These are some of the hardest hit areas; the overall foreclosure rate in the U.S. is 1 in 46.  To add to the picture, Julie showed a list of major U.S. lenders who have gone out of business since late 2006 – a staggering total of 387.

To add to the problem, the current trend is for appraised home values to be too low.  This is due to using short sales and foreclosures as comparison home prices.  Julie noted that short sales and foreclosures are not used when assessing a home’s value for tax purposes.

Some foreclosures are coming from individuals who are not out of work or in some other financial crisis.  These are people who see walking away from the loan as a valid response to a home that was purchased around the home value peak and is now deeply underwater.  Angelo Izzo, California Business Opportunities noted that loan modifications would help this situation but most requests for loan modifications are turned down.

Julie says that there is some talk in the industry about altering state law to try and regulate a fair market value for homes.  This is difficult partly due to the emotional component in pricing.  This is also why the appraised value may be much lower than the open market price.

On the improvement side, Julie reports that self-employed borrowers may now supply only one year of tax returns.  Landlords who have owned rental property for at least two years may now report rental income.  Asset statements are only required for a one-month period.  This is a particular boon because lenders are asking for any deposit over $2,000 to be explained.  You can now refinance a house as long as it has been off the market for one day.  You may report multiple second homes.  And finally, lenders are allowing unemployment income if the job is a seasonal one.  All of these were not allowed by lenders two years ago.

As a final tip for people who have homes on the market, Julie and John King, Keller-Williams Realty brought attention to the fact that single family homes must now have carbon monoxide detectors installed.  Appraisers may have to verify their presence and the seller will have to pay for a re-appraisal if the units were not installed at the time of the first inspection to the tune of $125 to $150.