Tag Archives: Bank Loan

So Why Does a Franchise Cost So Much Anyway?

A franchise investment isn’t as high as most people think, especially when you put the investment cost into context and compare it with starting a business from scratch. There are eight factors that determine a franchise’s investment costs.

What You Think You Know about Credit Is Just Wrong

There is a huge difference between consumer credit and business credit. Consumer credit funds consumptions while business credit is known as “leverage” and is applied to the purchase of an income producing asset. As individuals, consumer credit is generally a method we use to obtain what we desire sooner than if we were forced to save up the funds to purchase [...]

Read more »

The Feeble Role of Government to Stimulate Small Business

The news is filled with quotes from government officials exposing the critical role small business play in our economy. Articles talk about the billions in government dollars directed toward supporting small businesses. However, before you stake your claim on these funds, you should understand the assumptions the government has an about small business. Having made several trips to Washington D.C. to [...]

Read more »

Our Fragile Monetary System

Understanding monetary policy is critical to understanding why our lives are the way they are. Unfortunately, economics is often viewed by the vast majority of citizens with confusion and boredom. Financial jargon coupled with intimidating mathematics quickly deters people from any attempt at understanding it. That said, our established monetary system exists as one of the most unquestioned forms of [...]

Read more »

Forget Writing A Business Plan

The SBA has it wrong. A business plan is not always what you need. Financial planning is advisable to the extent that you have access to enough money or capital to conduct your first few experiments. However, small business counselors, mentors, and the SBA often encourage ALL fledgling businesses to write a business plan. This advice is just downright wrong. [...]

Read more »

Why Buyers Buy a Business

The inverse to why sellers sell a business is why buyers buy. Often a seller may only sell one business in a lifetime. However, buyers often buy several companies during their lifetime as they assemble pieces to help another business grow. Many buyers purchase a business to avoid the risk associated with start-ups and are principally financial [...]

Read more »

How to Argue for Seller Financing

Most banks say that they are small business lenders. The missing part of that statement is how banks define small businesses and what banks will lend money for. From the bank's perspective, a small business is an established business and not a new business. Banks lend money primarily for tangible assets that double as collateral. Banks rarely lend money to [...]

Read more »

How to Value an Existing Lifestyle or Micro Business

When it comes to buying a business, size does matter. Most lifestyle or micro businesses have under 1 million in annual sales. When it comes to lifestyle and micro businesses, the owner is also the top manager. For valuation purposes, a good rule of thumb for a marketable lifestyle or micro business is that the owner should generally earn about [...]

Read more »