6. Do not execute a lease without having an unbiased professional review the terms of the agreement.
Beware, the present market conditions favors the property owner. Many times the terms and conditions in a lease are not carefully reviewed and the tenant thus assumes unforeseen obligations such as structural repairs, replacement of air conditioning units, as well as increases in rental rates. If a property has been upgraded and the reassessment has not occurred prior to lease execution, the tenant may be assuming the increase in assessed value as well as a possible increase in the tax rate during the term of the lease. Be advised, the document was prepared by the landlord and therefore must be critiqued carefully by the tenant and his counsel. A real estate broker who is earning a fee from the transaction should not be considered an unbiased party.
7. Do not underestimate your operating expenses, or overestimate your income.
Being too overly optimistic does not serve you well because it is difficult to go back to a lending source or an investor when you run short of funds. Think conservatively and you will never be sorry.
8. Do not hire anyone until you check his/ her background and references.
When hiring one reference in not adequate. And, it is not foolish to run a report on a prospective employee. Training is costly so you want to be certain that you put the time into an individual who becomes an integral part of your team and will not use the position as a stepping stone for his or her personal benefit. Character is as important as qualifications.
9. Do not ignore the importance of including a dollar value for the services you provide to the venture.
There may be times when there is not enough cash in the account to draw a check for yourself or other members of management, but the cost of the services cannot be ignored in budgeting for operating costs. Without management there is no business.
10. Do not overlook the variables that relate to seasonality of your business.
Almost every business has seasons or months that are better than others. Never calculate your increases in revenues without taking the seasonality of your business into account. Adjust the expenses accordingly - there are seasons in which payroll will be higher or lower.
Stay tuned for my next piece where I'll share more small business Don'ts.
About the author
Marjorie Weber has been educating entrepreneurs and guiding them in their search for capital for the past 16 years: combining business training programs with one-on-one mentoring. Marj is currently a financial advisor for Florida SBDC at FIU. She was Chair of SCORE Miami Dade from 2010 to 2014. She also serves as an advisor to the Goldman Sachs 10,000 Small Business Program and the SBA Emerging Leaders Program and provides training for Veterans seeking an entrepreneurial path upon retirement from the service. She has facilitated workshops under the auspices of Miami Bayside Foundation, Little Haiti Cultural Center and .local banks. She commenced her career as a real estate investment banker in New York and Miami..She uses these long term relationships to assist her clients in accessing capital. She knows both the process and the people and has assisted in providing financing for hundreds of businesses in Miami Dade.