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Owning their own business is part of the American dream for many individuals. Although investing in a franchise requires you to work hard for success, you may find it more tempting than starting your own company.

On The Upside, Franchises Offer Many Benefits

One of the biggest attractions of owning a franchise is joining a successful business. There’s a proven market for the product or service. The name recognition means you have a customer base right away.  

The franchisor may have a training program that can help you get your employees ready to work right away. National or local advertising is already in place. Your franchisor may provide you with a marketing plan. 

You may receive equipment, inventory, or supplies at a reduced cost from the franchisor. At the least, you’ll have access to reputable vendors.  

Owning a franchise can make obtaining needed financing easier. For example, the Small Business Administration earmarks some of its funding for franchises.

On The Downside, Franchises Can Be Costly

None of this comes without cost. You won’t have the freedom to operate the business as you see fit. You must follow the rules and guidelines established by the franchise agreement. There’s little, if any, room for creativity or flexibility. 

You may also find the monetary cost of owning a franchise to be never-ending. For starters, you’ll have to pay for the franchise. That can run into the thousands of dollars.  

You will also have to pay the franchisor a royalty for every sale you make. You often have to pay for those training and marketing programs you need to get started.  

You’re always part of the franchise. If the national brand or another franchisee is involved in a scandal or receives negative publicity, your business could suffer.

Do Your Due Diligence

Consider all the ups and downs carefully before deciding to purchase a franchise. Franchise agreements usually require a long-term commitment. They can be challenging to break if you change your mind, so investigate thoroughly before investing in a franchise.

Cash flow becomes a problem for multiple reasons—slow paying clients, operation costs, a dip in sales—but having lines of credit available for your business is a game changer.

To start, it’s considered flexible “revolving” credit. It’s flexible because you can do whatever you want with the money since (like a loan) but revolving because you only have to use it when you need it (like a credit card). With a business line of credit, you don’t receive a large lump sum that you then have to budget out, you are able to use whatever you need at the moment you need it. It functions just like a business credit card, but you can access cash with it.

Business lines of credit keep you in charge and in control of your business. With lines of credit, you don’t have to sell company equity in order to temporarily increase your cash flow. This allows you to build your business ow you’ve always dreamed and without the interference of investors.

Opening a business line of credit is a relatively easy process and is often times more affordable than other financial products. For approval, six months of at least $50,000 in revenue is required which makes this a great tool for new businesses as well as old ones. The average rates are between 7% -25% which makes them cheaper than invoice financing, business credit cards and even short term loans. Also you only pay interest on what you have borrowed. If you have a line of credit for $50,000 but only borrow $10,000, you only owe interest on the $10,000. Also, limit replenishes automatically as you repay what you borrowed.

An amazing tool, business lines of credit allow you to always have capital on hand. They are perfect tools and financial vehicles for any kind of business structure and are natural compliments to other financing options (i.e. loans, business credit cards). It’s no wonder why many entrepreneurs recommend lines of credit.

One of the most important initial decisions that small business owners face is where to lease office space. Since rent on your physical location is one of your biggest expenses, it is crucial to take your time, understand your options, and decide carefully. Here are five mistakes to avoid when you are leasing office space.

Not Taking Enough Time

Don’t wait until the last minute when you need space for your business office. You should start researching and looking around at least six months before you need to move in. You’ll save money and also have the time to search out an ideal location.

Insufficient Research

Efficiently leasing office space requires knowledge of numerous details such as the prime locations, reputable tenant brokers, possible pitfalls, and legal processes. Learn these fundamentals before you start looking for the right commercial space for your business.

Signing a Lease Without Representation

Leases for the rental of office space can be complex documents that contain multiple clauses, hidden costs, and other variables. To obtain the most favorable terms from landlords, it is desirable to use a good tenant broker to assist you when you are finalizing and signing the lease. Professional representation can often save you a significant amount of money.

Over-reliance on Listings

Although listings on search engines can give you a general idea of the office space available in particular areas, the information accompanying the listings is often not only insufficient, but also inaccurate. These listings may help you get a general idea of the market, but when you arrange to view listings, understand that they may be exaggerations and oversimplifications of what is actually available.

Deciding Impulsively

When you are looking at possible office sites, avoid being swayed by agents of landlords who try to talk you into making a quick decision. Remember that you’ll be spending a majority of your working hours at this place, so it is imperative that you take your time in selecting the most suitable location.

For more advice on leasing office space for your business, contact Overhead Capital Ltd.

Many companies are offering consumer credit as a way to gain customers, but is it a good idea for you? Here are some advantages and disadvantages of offering consumer credit.

There are advantages to offering consumer credit. The main advantage is that it allows you to remain competitive. If your competitors are offering consumer credit and you’re not, you could lose business since customers are more likely to choose the business that allows them to pay less up front, even if it turns out to cost more over time. 

If none of your competitors are offering consumer credit, you may have a large increase in sales which will increase revenue. Offering consumer credit allows your to build a relationship with your customer. People like to buy from people they trust and by extending your faith to them (through credit), they are likely to continuing purchasing from you. You also have the opportunity to provide incentives or discounts for early payment.

There are some disadvantages to offering consumer credit. Outside of the inevitable because some people are just not going to pay—offering consumer credit negatively impacts your cash flow. Because you offer payments over time for items that are received immediately, you won’t have the cash on had for all of your other business needs (i.e. operation costs, payroll, etc). You will also have to manage the cash flow within your accounts receivable in order to cover the temporary loss. You can do this by negotiating better terms with your own lenders and/or suppliers, or by using a business line of credit.

You also take on the responsibility of assessing credit risk and someone will have to manage and keep up with accounts receivable by calling those who don’t pay and ultimately you run the risk of bad debt. Putting the debt into collections costs money and if they never pay you have to write the debt off as bad debt.

Offering consumer credit is a big decision to make. Take it slow and make it wisely.

Investing in commercial real estate can be daunting for beginners. This post explores commercial real estate basics, including financing methods, niches, and risk profiles.

Risk Profiles of Commercial Real Estate Investing

The following are the four main categories of a risk-reward payoff of commercial real estate investing.

Core

Core investments are the least risky. They are stable and provide a steady cash flow. Most of these investments are Class A buildings that require little to no improvements when purchased and generate predictable cash flows. This is the way to go if you are looking for capital preservation overgrowth.

Core-plus

Core-plus investments are relatively stable since they are located in areas with financially stronger and responsible tenants. Their vacancy is relatively low, and they can access financing more easily. 

This type of investment has more risk and may include refurbishing or renovation, which results in higher risk but higher returns.

Value Add

These are properties with a current cash flow but may need more significant improvements. Such improvements can justify higher rates and finding ways to lower operating expenses.

They can provide more upside potential, but they may be riskier. This is because they use a higher leverage ratio compared to the previous two.

Opportunistic

These investments offer the highest growth potential but have the most risk. They may need significant renovations and have high vacancy rates. An example of these investments is land. 

Pros and Cons of Real Estate Investing

Pros

• Cash flow and appreciation  

• No management obligations: You can hire property managers to maintain the properties on your behalf. 

• Diversification: It gives you more diversification from assets like stocks and bonds. It can provide a higher ROI when other assets depreciate or inflation is high.  

Cons

• Financial barriers. Real estate investments are not accessible to an average person. They are mostly open to accredited investors. 

• Vacancies. Tenant vacancies can lead to continued pay for expenses with no tenants paying rent.  

Key Takeaway

Consult a financial planner before investing to help you know what risk profile you can invest in. Also, take into consideration the pros and cons so that you can make an informed choice. 

Small business owners struggle to make a breakthrough in the marketplace. Hurdles along the entrepreneur journey should not deter your business plan. As an entrepreneur, you should factor in the prospect of expanding your business. The article walks you through various growth capital sources for business expansion.

Cash Advance

If you are looking for short-term growth capital for your business, you should consider a cash advance. Cash advance involves relinquishing marketable receivables to a finance company in exchange for financing. In this model, you have to encompass high fees charged by lenders. Therefore, you must ensure that your venture is profitable in the long run.

Venture Capitalist

In the recent past, there has been an increase in the number of venture capital firms. These firms invest a substantial amount of money in businesses that prove profitable in the long run. To secure this form of growth capital, you have to be willing to give up a portion of your equity. Venture capital firms are known to provide financial knowledge and advice to their partners.

Angel Investors

Unlike venture capitalists, angel investors do not invest on behalf of the clients. Instead, they provide financing based on their interests in your business. Furthermore, they provide you with a network of new customers and suppliers. By doing so, the investors give you a platform to improve your growth capital.

Asset-Based Growth Capital

Conventional lenders have proved to be resourceful sources for growth capital. Here, you must provide collateral in terms of assets to secure a loan. Asset-based loans are the best option, especially if banks deny you growth capital. Make sure you understand the terms and conditions before signing an agreement.

Summary

Small businesses can expand their operations through growth capital. To achieve this goal, you must pick the best financing option. Overhead Capital has been at the forefront in providing growth capital. Contact the experts today for top-notch financing services.

The merchant cash advance is a popular form of alternative financing among business owners who need quick access to cash. To apply for a merchant cash advance, you complete an application and submit it along with the documents the lender requested. This usually includes several months of credit card statements for your business at a minimum.

Lenders who offer the merchant cash advance as a financing option establish repayment by receiving a small percentage of your company’s credit card receipts each day by automatic clearing house (ACH) deposit. Because repayment is a percentage, it allows you to pay more when sales volume is high and less when it’s lower. The higher your credit score, the more likely it is you will receive the most favorable repayment terms. We recommend obtaining a copy of your report several weeks before you plan to apply so you know your credit score and can correct any mistakes on the report.

Have a Plan for How to Use Funds from the Merchant Cash Advance

While a merchant cash advance can come in handy when you’re experiencing a cash flow pinch, you shouldn’t come to rely on it as a regular source of revenue. This is one reason why knowing how much you want to borrow and having a budget for it before you accept proceeds from the advance is so important.

Decide if This Alternative Payment Method is Right for Your Industry

The industries that typically benefit the most from a merchant cash advance tend to be retail, restaurants, and service businesses because they receive daily revenue from credit card sales. It is always a good idea to review credit card sales from the past several months before applying for an advance. This will give you an idea of your average daily revenue to ensure that you can manage repaying the funds as expected.

Is the merchant cash advance right for your company? Find out by contacting Overhead Capital Ltd. with additional questions or to complete an application.

There is nothing easy about starting a medical practice. You need to find the ideal location, attract new patients, devise a business plan, and many other tasks before you can even consider opening the doors. Below are five tips for anyone considering moving forward with buying, developing, and opening a new medical practice in their area. It all starts with believing you can do it.

Remind Yourself of Why You Started When Times Get Tough

Perhaps you have advanced medical skills but little to no skills in the administrative side of opening and running a business. That is common and there is nothing wrong with it. The important thing is to understand your own strengths and weaknesses before you start to avoid a costly case of trial and error later. It may be that you need to hire a business strategist to get up and running.

It is difficult to anticipate the issues you might run into as the owner of a new medical practice at the beginning. The issues will become more apparent once you operate for a while. Remember that knowledge and skills are not the same thing and it can take time to develop all the skills you need to run a medical practice successfully.

Don’t Rush Choosing a Name for Your New Medical Practice

The name you choose for your business should be unique and identify what you do and who you serve in just a few words. Before you become attached to a potential name, however, be sure to request a business name check to make sure that someone else doesn’t already have a trademark on it. You could find yourself in legal trouble if you try to use the same name even if you legitimately did not know it belonged to someone else.

Get Your Financing in Order

Starting and running a medical practice is not an inexpensive endeavor, but Overhead Capital Ltd. is here to help meet at least some of your financing needs. Please contact us to learn more about our many alternative finance options.

Real estate investment can be a good financial opportunity. However, there are a wide range of types of property in which you can invest. If you are considering a residential rental property, the primary decision is whether to invest in a single-family or multifamily property. Here are some of the benefits 

Selling Brings in More Money

The improvements made in a multifamily property are on individual units rather than the entire structure. As a result, there is a greater overall impression of improvements compared to a single-family property. That is, improving the units in a twelve-unit property means improvements to twelve homes. When this is compared to the same improvements made to a single-family property, it is clear that greater improvements are made to the multifamily property. As a result, when the property is sold, this overall appreciation is taken into consideration.

Management and Maintenance Are Easier

Rental properties require management and maintenance. However, it is more difficult to manage and maintain multiple single-family properties, which may be located all over the area, compared to a multifamily property, which can be addressed at a single location. This takes some stress off the ownership of the property, including reducing time and effort spent.

Economy of Scale Is Beneficial

Along with the ease of maintenance and management, another benefit of multifamily property real estate is the economy of scale in maintenance. That is, maintaining one property, even with multiple units, is more cost-effective compared to multiple single-family properties. This saves money during the investment that can then more easily be recouped after the sale of the property.

Loss of Tenants Is Easier to Overcome

The loss of a tenant in a multifamily property is much easier to deal with compared to the loss of a tenant in a single-family property. In multifamily properties, other tenants will remain, which provides revenue for the property. However, if a tenant leaves a single-family property, the property does not generate any revenue until a new tenant takes possession.

When investing in residential real estate, multifamily properties have many benefits compared to single-family properties. Capitalizing on these benefits can help you save money during maintenance as well as bring in more money when you sell.

Everyone wants to be more productive in the workplace. However, it can be hard to know the best way to move beyond what you think you are able to accomplish. These tips can help you push your productivity to the next level.

Use neuroplasty. Though people learn best when they are young and their brains are still developing, the adult brain still has an amazing capacity for change. That means employees can change their patterns to become more productive, especially with the right support, environment, and resources in the workplace. If you want to be more productive, work on changing your thinking patterns, and you will be amazed at what you can accomplish.

Reduce stress hormones. When human bodies becomes stressed, the brain changes, putting you in more of a “survival” mode. This can prevent you from being creative and innovative in the workplace. By reducing your stress, you free your brain to think creatively so you can achieve your goals on a day-to-day basis.

Cycle your productivity. Humans were not designed to work for eight hours a day without a break. Just as your body has natural sleep patterns, your body has natural productivity patterns. Pay attention to these cycles and maximize your productivity when you are focused and energetic. Then use the “lull” to allow your brain to recharge.

Minimize distractions. Distractions can keep you from being productive because they take you out of your current task and derail your thinking. You not only have to take time to deal with the distraction, but then you also need to take time to return to the task you were completing. By minimizing distractions in your workspace, you can maintain focus and productivity on your current task more effectively.

Whether you are gearing up for a new project or simply want to be more productive on a day-to-day basis, these tips can help. By implementing them into your work-life, you will be able to achieve your goals more easily to have the career success you are seeking.

Owning their own business is part of the American dream for many individuals. Although investing in a franchise requires you to work hard for success, you may find it more tempting than starting your own company. On The Upside, Franchises...
Continue Reading →
Cash flow becomes a problem for multiple reasons—slow paying clients, operation costs, a dip in sales—but having lines of credit available for your business is a game changer. To start, it’s considered flexible “revolving” credit. It’s flexible because you can...
Continue Reading →
One of the most important initial decisions that small business owners face is where to lease office space. Since rent on your physical location is one of your biggest expenses, it is crucial to take your time, understand your options,...
Continue Reading →
Many companies are offering consumer credit as a way to gain customers, but is it a good idea for you? Here are some advantages and disadvantages of offering consumer credit. There are advantages to offering consumer credit. The main advantage...
Continue Reading →
Investing in commercial real estate can be daunting for beginners. This post explores commercial real estate basics, including financing methods, niches, and risk profiles. Risk Profiles of Commercial Real Estate Investing The following are the four main categories of a...
Continue Reading →
Small business owners struggle to make a breakthrough in the marketplace. Hurdles along the entrepreneur journey should not deter your business plan. As an entrepreneur, you should factor in the prospect of expanding your business. The article walks you through...
Continue Reading →
The merchant cash advance is a popular form of alternative financing among business owners who need quick access to cash. To apply for a merchant cash advance, you complete an application and submit it along with the documents the lender...
Continue Reading →
There is nothing easy about starting a medical practice. You need to find the ideal location, attract new patients, devise a business plan, and many other tasks before you can even consider opening the doors. Below are five tips for...
Continue Reading →
Real estate investment can be a good financial opportunity. However, there are a wide range of types of property in which you can invest. If you are considering a residential rental property, the primary decision is whether to invest in...
Continue Reading →
Everyone wants to be more productive in the workplace. However, it can be hard to know the best way to move beyond what you think you are able to accomplish. These tips can help you push your productivity to the...
Continue Reading →