Steps to Start a Business
American Business is overwhelmingly Small Business According to data from the Census Bureau’s Annual Survey of Entrepreneurs. There are 5.6 million employer firms in the United States and 89% have fewer than 20 workers. The Steps to Start a Business can be challenging and time consuming for potential entrepreneurs.
While doing my research I decided I wanted to become an entrepreneur and open my own Restaurant Brokerage Firm. I knew after working with one of the nation’s largest Restaurant Brokerage Firms for over 7 years as a Sales Development Manager and Restaurant Broker, I was qualified to be my own Broker!
This blog is about my experience during my first 90 days since I opened EATS Restaurant Brokers. The challenges have been monumental at times, the setbacks have been hurtful, but the rewards have overshadowed all the negative the obstacles. I have listed some important steps I had to complete and a mistake I made during the process.
Organize Business Entity
The first obstacle was establishing the business entity. The first items I addressed in order are listed below:
– Drafted a Business Plan
– Set up Business Structure
– Set up Business License- create the company name
– Applied for an EIN (Employee Identification Number)
– Set up Business Account
– Set up an accounting system for debits and credits
– Created a Marketing Plan
– Created a Marketing Budget
Create a Website
The presentation of your business can make or break your business in the beginning stages of a company start-up. Like most start-up companies I was trying to save money any way that I could. I first used a Website developer based out of India, the prices were affordable and the websites this company produced looked good.
Once I paid my money and provided content and pictures for my website, it was completed in about 4 weeks. The website was active for one week before I started to have issues. After three weeks my website had an error message, I could not get in contact with the website developer.
Once I knew I have got scammed I quickly found a website developer located in the USA that specialized in Business Broker websites. The website development team made the process simple and my new website was down six weeks later. I paid double the price of my previous website but the quality is so much better.
It’s true you get what you pay for!
Marketing
Getting customers is the difference between closing the doors and succeeding. I did not start my business with a huge marketing budget.
I’ve spent countless hours cold calling restaurant owners, sending emails, sending mailers, and networking to get restaurant seller leads. Branding myself on social media and blogging has been time-consuming activities but have been successful in getting leads.
The marketing aspect of my business as a Restaurant Brokerage has been a challenging learning experience. The freedom to be creative with my marketing has been the most satisfying reward for opening my business.
There are more than 28 million small businesses in the United States, making up a whopping 99.7 percent of all U.S. businesses, according to the Small Business Administration. I’m glad that EATS Restaurant Brokers is one of those companies!
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dominique Maddox at 404-993-4448 or by email at sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com
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What Should Your Business Broker know about your business?
If you’ve reached the point where you’d like to sell your business, odds are you’ll want to engage a business broker to help you through the process. The relationship between a Business Broker and seller is a key element to getting a business or restaurant sold. As a seller, a broker can help you streamline everything from pricing your business to marketing it to buyers.
The relationship between a seller and a Business Broker should be honest and open, with ALL negative information provided to the Broker upfront. Founder of EATS Restaurant Brokers Dominique Maddox says, “the worst feeling is to have a seller not disclose negative information on the listing and you find out later in the process”.
The act of withholding information from a Business Broker can decrease the chances of a business getting sold. Business Brokers are consultants with a job of keeping a deal together, this becomes increasingly difficult if they don’t have all the details of the business.
EATS Restaurant Brokers provides 3 things a Business Broker should know about your business.
Do the tax returns match the copy the IRS has on file?
When a buyer goes to a bank and provides Tax Returns provided by the seller, the bank will request tax returns directly from the IRS to confirm they match. Form 4506-T is an Internal Revenue Service (IRS) document that is used to retrieve past tax transcripts that are on file with the IRS. The document must be signed and dated by the taxpayer, thus giving third-party permission to retrieve the taxpayer’s data.
This is extremely important because if a seller has provided false tax returns or filed an amendment on his/her tax returns the Broker needs to know this information. Yes, as a Restaurant Broker I’ve had sellers provide false tax returns to a buyer and it was uncovered once the form 4506-T was signed.
Do you own the equipment?
Landlord these days when a tenant defaults on the rent they will evict the tenant and keep the equipment. This process makes it’s easier to lease the space to a new tenant. Savvy buyers can get a fully equipped restaurant to lease to convert to a new concept. This works well when you are opening but when it’s time to sell, what do you have to sellAn experienced Business Broker will have a seller provide an asset list to include only items owned by the seller. This makes a big difference in the potential list price. I’ve experienced sellers trying to sell a restaurant, but they don’t own the equipment, these deals rarely close.
UCC liens on the business?
UCC filing, also known as a UCC lien or a UCC-1, is a financing statement that lenders can file against your business with your secretary of state. ). This form is filed in order to “perfect” a creditor’s security interest by giving public notice that there is a right to take possession of and sell certain assets for repayment of a specific debt with a certain priority
Liens can be placed on business equipment, a vehicle, property, or even a blanket lien naming all your assets. Most Purchase Agreements will have language that a business or restaurant has to be free and clear of UCC liens before a sell can happen.
If a seller doesn’t want to tell a Business Broker about a UCC lien it will come up once the closing attorney does a lien search. Talking upfront about these issues with your Business Broker about your UCC lien situation can help the sale of the business. Your Broker should be able to help you through each situation, but they must know first before they can help.
The trust relationship between a Seller and Business Broker can be the difference between a business selling or not. Nobody hates surprises more than a Business Broker when they think they know all the details about a business they are trying to sell. Your Business Broker is like your lawyer, they need all the details before they can successfully represent you. The best piece of advice is to Disclose, Disclose, Disclose!
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dominique Maddox at 404-993-4448 or by email at sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com
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