Andrew Rogerson's Blog, page 44

Rex Berry and employment law in the Sacramento area

Rex Berry is my guest on 105.5FM and Money 2.0 and our topic covers employment law and how an employer in the Sacramento area can take steps to reduce unwelcome lawsuits and employee claims; which drain the owner by wasting time and energy on a unproductive problem.

Rex is an attorney and therefore a member of The State Bar of California. Not only that, he knows what he’s talking about. Here’s some of the reasons why.

Rex has appeared before the Washington and California Supreme Courts and United States Supreme Court. In 2013, Rex was named to the American Lawyer/Corporate Counsel Top Rated Lawyers Guide to Labor and Employment Law, and was selected for inclusion in the list of 2013 Northern California Super Lawyers.

There’s more but let’s “cut to the chase.”

Rex Berry and Employment law in the Sacramento area

As Rex and I discuss, employment law, especially in California can be very subtle and easy for an employer to make a mistake.

A misunderstanding, a cultural difference, a heated moment that led to an inappropriate outcome or event, failing to take quick action which may have “nipped a problem in the bud” are situations as an employer or employee we can relate.

For the employer, the problem is their responsibility and can lead to much better outcomes if managed carefully and thoroughly.

My conversation with Rex Berry

Employment law in California requires getting it right. My conversation with Rex was intriguing and covered a range of topics.

Here are some of my questions for Rex and part of our conversation.

What is the biggest mistake employers make when hiring an employee?
How much information can you really obtain on a prospective applicant?
What is the biggest mistake employers make when an employee brings up a complaint?
How much documentation is enough?
How does an employer decide when to continue working to salvage an employee, and when to “pull the trigger and let them go?”
What makes a good employment lawyer?
When should I call an employment lawyer for advice?

Employment law is of critical importance to the success of a business; especially if you are in California. Rex Berry specializes in this area of law in the Sacramento area and is ready and able to help.

Please click this link if you would like to hear my conversation with Rex Berry and employment in the Sacramento area.

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Personal or business bankruptcy in Sacramento

Bret Rossi lives and works in the Sacramento area and is a member of The State Bar of California. That is, by profession he’s an attorney. Like all attorney’s, he has specific areas of interest or specialization and these are Litigation and Bankruptcy be it personal or business. That’s not how Bret sees his job, that is, practicing law but more importantly, helping people with a negative situation in their life so they can move forward and on towards things that are more fun and productive.

Each Tuesday at 10.00am PST on radio station 105.5FM I conduct a radio show called Money 2.0.

The purpose of the show includes interviewing business experts in a range of topics including selling a business, selling a medical practice, valuing a business, buying a business and buying a franchise plus all the responsibilities and challenges that come with owning and operating a business or as I like to say, where Wall Street meets Main Street.

You are welcome to listen to my interview with Bret Rossi when he was a guest on my show on September 10, 2013.

Personal or Business Bankruptcy in Sacramento

Some of my questions for Bret when we talked about bankruptcy and business litigation and how it affects the local Sacramento economy includes the following:

There are different chapters of bankruptcy. Very briefly, what are they and what does each number mean?
Which ones are used for business and which ones are used for personal?
It would seem that a business owner that is considering filing for bankruptcy may have both a personal and business need. If you own a business with debts and personal debts can you file one bankruptcy to handle both personal and business debt?
Is there a minimum amount of debt a business owner should consider as too much and decide filing Chapter 11 is a good option?

There were many more topics covered during my interview with Bret; especially what options are available to those considering a personal or business bankruptcy.

If you would like to listen to my conversation with Bret Rossi on my show, simply click the following link: The Law Office of Bret Rossi.

On this show there were two guests. If you just want to hear my conversation with Bret it starts about 28 minutes into the show.

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Tax planning for a business owner in the Sacramento area

Donna Sauter lives and works in the Sacramento and Modesto, CA areas and likes to deal what many would consider the most boring subject of all; taxes and financial statements. As far as Donna is concerned, her job is not about taxes and financial statements but using the data and wealth of information that flows from putting accurate financial statements together and the benefit and knowledge it brings the business owner.

Each Tuesday at 10.00am PST on radio station 105.5FM I conduct a radio show called Money 2.0.

The purpose of the show includes interviewing business experts in a range of topics including selling a business, selling a medical practice, valuing a business, buying a business and buying a franchise plus all the responsibilities and challenges that come with owning and operating a business or as I like to say, where Wall Street meets Main Street.

You are welcome to listen to my interview with Donna Sauter when she was a guest on my show on September, 24, 2013.

Some of my questions for Donna when we talked about taxes and tax issues for business owners in the Sacramento area includes the following:

When should a business owner start their tax planning?
What would you advise a business owner who is having a really bad year and whether it make sense to do any tax planning?
If you own a business and are having a really good year, what tax planning should you consider?
How do you help your clients with their tax planning?
What’s the best way a client can prepare so when they come to you, you can focus and help them?

There were many more topics covered during my interview with Donna; especially about how these mundane tax compliance requirements help a business owner.

If you would like to listen to my conversation with Donna Sauter on my show, simply click the following link: Tax and tax planning for a business owner. On this show there were two guests. If you just want to hear my conversation with Donna it starts about 28 minutes into the show.

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Angel Investing in the Sacramento area

Graeme Plant lives and works in the Sacramento area but deals with clients across the US and from around the world. His job includes working as a Mergers and Acquisitions consultant. In addition, Graeme has a passion and interest in Angel Investing and the benefits and challenges it brings to the economy.

Each Tuesday at 10.00am PST on radio station 105.5FM I conduct a radio show called Money 2.0.

The purpose of the show includes interviewing business experts in a range of topics including selling a business, selling a medical practice, valuing a business, buying a business and buying a franchise plus all the responsibilities and challenges that come with owning and operating a business or as I like to say, where Wall Street meets Main Street.

You are welcome to listen to my interview with Graeme Plant when he was a guest on my show on September, 24, 2013. Some of my questions for Graeme when we spoke about Angel Investing in the Sacramento area includes the following:

Is there a typical type of return an Angel Investor looks for?
How does an Angel Investor measure risk when choosing an investment?
Is an Angel Investor able to combine Angel Investing with other types of finance?
Do Angel investors tend to come together with “like minded” investors or do they tend to work on their own?

There were many more topics covered including my request to Graeme to provide some of the success stories from Angel Investing he was able to share.

If you would like to listen to my conversation with Graeme Plant on my show, simply click the following link: Angel Investing in the Sacramento area.

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Incorporating Your Small Business

In the last few years, you’ve seen your business grow in ways you didn’t expect, and now you’re going to take further steps to protect your investment. Incorporation is the next logical move, but before you dive in, make certain your finances are in order. Here are a few tips to secure your finances before you decide about incorporating your small business.

Evaluate Your Habits

Sometimes when you are excited about a new opportunity you tend to overshare information. This habit might leave your business vulnerable to hackers and criminals who are looking for the right opportunity to take advantage. Be careful not to discuss business matters in public places. This includes keeping your security-sensitive conversations to a minimum even when out with a friend. You may think it is confidential, but someone close by might be eavesdropping. In small towns where people know each other well, chatting freely might just result in a bit of imminent gossip, but sit next to the wrong person in a cafe in an unfamiliar metropolitan area and you never know who is listening. Don’t be scared, but do be cautious.

Be careful not to travel with sensitive documents like your Social Security card or business credit card if you don’t absolutely need it. One glance at your Social Security number and it could spell disaster for your business. Read about protecting yourself from tax fraud or protecting your business identity. Keep up to date with news on the subject through Twitter and RSS feeds to which you subscribe.

Frequently Change Your Passwords

Hackers are savvy about technology and you hear more and more about criminals using credit card numbers and other personal information to steal new identities. By updating your passwords every few months, you protect your business from an outsider gaining inside information about highly sensitive information. Choose strong passwords. These should be long words or phrases that mean something only to you, as well as a mixture of numbers and letters. Use a password generator if you don’t want to come up with one on your own. Also, use encryption to protect sensitive data.

Collect Your Mail on Time

There are certain documents you must secure via snail mail. Make certain you don’t leave sensitive mail in your box for too long. If you’re out of office for an extended amount of time, have someone you trust collect your mail, or put a hold on mail through the post office.

Check Your Credit Reports

By pulling your credit reports, you will find out if anyone has used your identity or business information to open an account or rack up charges on an credit card you are no longer using. It is one of the quickest ways to determine if your identity has been compromised. You’re entitled to one free credit report per year from AnnualCreditReport.com.

Protect Your Personal Documents

You may keep certain documents like your company’s financials, tax returns, account information and other sensitive data on your premises. It might be a good idea to put these documents in a safe deposit box off-site and limit the number of people who are able to access this paperwork. If paying for a safe deposit box isn’t an option, buy a safe for onsite storage.

Watch out for Wireless Networks

You may be tempted to access personal business information on a public network, but this may not always be the most secure way to review sensitive information. It is probably best to view this information at home on a network you’ve secured from hackers. This is something to consider when you’re out at a coffee shop or the library. Remember these are not secure networks, so save the banking and secure transactions for in the office.

Shred Personal Information

Although you may not like to think about it, some people will dig in your garbage to retrieve information. Checking account documentation, financials and all paperwork related to your business should be shredded to prevent a breach from occurring. Invest in an inexpensive shredder from an office supply store, or opt for a service, which will pick up anything you need shredded from your office each month.

Incorporating your small business is an important milestone. But be smart about it! Protect your investment by securing your personal information today.

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Ready to sell your medical practice?

Selling a medical practice is no different to selling any other type of business or practice but I have noticed one exception.

After I receive a call from a doctor or their office manager that wants to sell their practice my first step is to put together a valuation of the practice. There is the obvious reason for doing a practice valuation; that is, it arrives at a price to put the practice on the market.

However, in addition to this reason, the more important reason for me is that it allows me to build a profile on the history of the practice and its patient base as well as provide a detailed summary of key information a potential buyer will want to know. This may not sound different to selling any other type of business but with a medical practice it’s much different.

Ready to sell your medical practice?

It’s much different because the current owner of the practice often has criteria that’s important to them and the patients they choose to serve. For example, does the practice take insurance or is it cash only? Does the practice take Medicare or Medi-Cal patients and if so, what percentage of the practice revenue comes from those patients? Does the practice service a particular ethnic group because the owner speaks that foreign language? That is obviously a big deal because if the potential buyer of the practice doesn’t speak that language, the patients will leave and go someplace else.

Unlike selling a regular business, this takes a lot of work and takes a lot of time. It would be easy to skip this step because of the work and time it takes however to me it is critical as I can’t provide the best service possible to either the buyer or seller unless this is done.

Despite doing all this work to present the practice in the best light possible to potential buyers, I’ve noticed something more important, very easy to miss and possibly impossible to know and it is this. Does the doctor selling their practice really want to sell?

Read More: Here is more information about selling a medical practice.

Do you really want to sell your practice?

I’m currently working with two doctors that have been together in medicine for well over 40 years. They love what they do and their practice has a tremendous reputation in the community. There has been strong and regular buyer interest to acquire their practice. In fact, there have been 6 offers made from potential buyers. For some reason, each offer was initially very appealing to the doctors selling the practice, but as time went on, because there were many questions to address, the sellers found reason why the offer wasn’t quite right.

Similarly, I recently worked with a sole practitioner to sell her practice. A buyer made a very good offer which she accepted but with a condition that they would close the sale in 4 months’ time. As it became closer to the date to close the sale, there were problems that came up that pushed the date of closing the sale out one month, then another month and then it didn’t happen.

You will still be a doctor after selling your practice

The above examples plus other observations I’ve made from selling a medical practice is that the work of a doctor is incredibly important to them and how they define themselves. Being a doctor requires enormous sacrifice in terms of the amount of money it costs and the dedication of time to meet its demanding standards. Equally, the community acknowledges and appreciates the skill, selfless commitment and life-saving work of doctors. For these reasons and more, it can become hard for a doctor to let go and sell their practice.

If you are a doctor and thinking of selling your practice is this something you are ready to do? What will you do after the sale of your practice closes and you have transitioned the practice to the buyer?

What will happen if you are unable to sell the practice?

A regular phone call I receive is from a child or spouse of a doctor to ask what steps they can take to sell the practice as the owner/doctor has passed away.

It is so hard if not impossible to sell a medical practice if the owner/doctor is unable to be part of the transition. Once the owner/doctor is unable to see patients, the patients have a need and look elsewhere for their care and attention and so the practice revenue comes to a quick halt.

Selling a medical practice is more complicated than almost any other type of business. Taking real and practical steps are the second most important items to address. The first is the doctor deciding they really want to sell and have a clear understanding of what they will do if and when the practice successfully sells.

If you’d like more information about selling your medical practice, feel free to get in touch with me for a quick consultation by email an email to Andrew Rogerson or give me a call on 916 570-2674. We’ll discuss your particular practice and your personal goals to figure out together how you can maximize selling your practice!

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Business lessons from General Stanley McChrystal

General Stanley McChrystal, amongst other things, was a 34 year military veteran in the US military including the US Commander in Afghanistan up until 2010 when he resigned and was replaced by General David Petraeus.

Recently he wrote and published a book called “My share of the task” and was talking with Charlie Rose on Bloomberg TV.

During the interview he was asked “What are the most important attributes of someone that wants to be successful?” The question was asked in the context of his 34 year career in the US military but his answer applies regardless of your walk of life and what you hope to achieve but especially, I think, if you plan to be successful in owning and operating a business.

General McChrystal’s two important or key attributes to be successful were personal discipline and empathy.

Business value of self-discipline

General McChrystal went on to explain that personal discipline will determine how high and fast you grow and develop to be the best you can.

Personal discipline meant the efforts of an individual to develop a personal skill set so they were equipped and able to make decisions; that on review with the benefit of hindsight, were proven to be the best that could be made on consistent basis.

General McChrystal made it clear, however, that personal discipline not only wasn’t enough in itself, but on its own could be destructive and even self-destructive under some situations.

Business value of empathy

The second attribute important to General McChrystal was empathy. The ability to seek or provide a decision as it would be felt by another person or group of people. That is, some military commanders were great at making decisions but they lacked empathy or the ability to know how executing that decision would be felt by others.

For example, it simply wasn’t good enough to send out military personnel on a dangerous mission without taking into account how they felt about the mission or getting feedback from them to know what they thought would be their chances of success.

Two business lessons from General Stanley McChrystal

Self-discipline to be successful in business is a tremendous attribute; just as it is in the military. The ability to have empathy with how that decision will affect a customer, an employee, another business owner or a competitor can be the difference between success and failure. Interestingly the affect may not be immediate and it may not just be that one decision; but cumulative and over a period of time when it can make the difference between success and failure.

If you’d like more information about selling your business, feel free to schedule a time with me for a quick consultation. We’ll discuss your particular business and your personal goals to figure out together how you can maximize selling your business!

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Questions to ask when buying a business

There are lots of items for a business buyer to resolve before they finally close escrow and own their business. If the buyer asks a question and they either don’t get an answer or don’t like the answer it can mean the end of the buyer’s interest.

If you are looking to buy a business where do you start? Here’s a set of quality questions to start your process to buy a business.

One question to answer before you start asking your questions

The question is “Do you really want to buy a business or do you think you want to buy a business?”

From my perspective there is a big difference. So many buyers gingerly enter the business buying process by completing a Non-Disclosure Agreement so they can get more information…and then stop.

Buying a business is very difficult as it not only requires asking a lot of questions but also taps into many emotions of the buyer. That is, it takes time and a lot of hard work.

My suggestion is not to start the process unless owning a business is really what you want to do. If you are not sure about the answer to that question, spend some time finding the answer as the question is too important. It could save you a lot of time, money and worry.

Read More: Here is more information about the steps to buy a business.

Ten questions to ask when buying a business

Here’s a good set of questions to ask the seller of a business and/or their business broker. This set of questions is not exhaustive but provide a great starting point. Use these questions to get your buying process going and then vary them depending on the business you plan to buy including the industry it is in.

How long has the business been in existence?
How long has the seller owned the business?
What are the hours the business is open?
What are the hours the owner works?
How many employees work in the business and what hours do they work?
Are there any family members that work in the business? If so, how many hours do they work each week, what is their job description, how much are they paid and will they continue to work after the sale of the business closes?
Do all the customers come into the business or do some customers buy online?
Who prepares the monthly financial statements? How are the documents prepared? Are all sales reported?
Who prepares the payroll for the business? How often are the employees paid? How do the employees report the hours they work?
Has the business had any previous lawsuits and if so, what were they? Are there any pending lawsuits? If so what are they?

There are many other initial questions to ask a business seller if you are a buyer looking to buy a business. This is the first article in this series and will include more articles.

If you would like more information about buying a business please visit my webpage Buy a business or buy a copy of my book Successfully buy your business.

For more immediate help with buying a business you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.

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How to buy an existing franchise

The owner of a franchise (or a franchisee) is no different to the owner of a regular business; at some point in their life they reach the decision it is time to sell and go and do something different. It can be due to divorce, a health issue, retirement or perhaps an opportunity to cash out their initial investment in a franchise to protect it. Life happens. How to buy an existing franchise? Is it the same as buying a “normal” business?

As Yogi Berra could have said, “Buying a franchise is the same as buying a normal business, only it’s different.”

Why is buying a franchise different?

From a franchise buyers perspective there are a some differences. Most of them help the franchise buyer while most of them slow down the franchise buying process. Let’s have a look at a few of them.

1. The franchise buyer has to qualify to buy the franchise

When a business owner sells their business they generally are not too concerned about the skills and qualifications of the buyer. However, without exception the franchise buyer must be approved by the franchisor.

The reason for this is that a good franchise system will have minimum quality standards; this is how the franchisor builds their brand. The franchisor wants to make sure the buyer of the franchise has the ability to meet those standards and therefore will be rigorous in their decision about whether to approve the franchise buyer.

2. Franchise buyer will need to attend training

The quality of the franchise is often reached by the in-house training of the franchisor. This training can be the initial training to educate the franchise buyer on the minimum standards of the franchise system. Additional and on-going training are generally part of a good franchise system. If a business buyer acquires a normal business, the seller expects they have some basic knowledge about running a business and will give transitional training for a week or two but not foundational training.

3. The quality of the financial statements should be higher

One of the advantages for a franchise buyer is that the quality of franchise statements should be higher.

Most franchisors charge a monthly royalty to the franchisee to be part of their franchise system. To make sure the franchisor is paid and paid accurately, the franchisor at their expense creates a point of sale system to capture all sales and then deduct their monthly royalty. With this system in place it should be very easy to prepare a set of financial statements which the franchisee then uses to roll up into the annual tax return.

As everyone hates paying any more taxes than they need, the franchise buyer can be confident that the numbers they see from these financial statements will be the minimum performance of the franchise. This also helps the franchise buyer if they need to get a loan and also helps the seller if there is a request to provide seller finance.

4. Franchise buyer can interview other franchisees

One of the best advantages when buying a franchise is that you can interview and talk to other franchisees in that system. This means you don’t just get the opinion about the performance of the business just from the seller’s perspective, but also the current franchisees working and making a living from the franchise. Plus you can ask the current franchisees their opinion about the franchisor; which is a wonderful option.

Read More: Here is more information about buying a franchise.

Disadvantages of buying an existing franchise

Buying an existing franchise does come with some disadvantages.

These disadvantages include not knowing if the franchisor will accept you; even if the seller agrees to your offer. This is because the franchise agreement does not need the franchisor to accept you as the buyer but rather meet their qualification process that includes looking at your financial and business management strength plus anything else important to the franchisor.

Another disadvantage is that the buyer may have to attend training before the franchisor will approve them to take over the franchise. This will normally always be at the franchise buyer’s expense.

One final disadvantage can be timing all the pieces so the franchise is not damaged. This means the buyer making their offer to time with the seller’s needs, conduct the necessary due diligence, get finance approved such as an SBA loan, get the landlord’s approval if the business includes leased real estate, attend the training, open and handle escrow and finally know if the sale will go through. That is, there are lots of moving pieces and if one piece is slow to process or worse still, unable to arrive at a positive outcome; it may all have been a waste of time and energy.

If you would like more information about buying a franchise please visit my webpage Buy a franchise or buy a copy of my book – Successfully buy your franchise.

For more immediate help with buying a franchise, send an email to Andrew Rogerson or give me a call on 916 570-2674.

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Executive Care Franchise opportunity

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Executive Care is a franchise serving our senior citizens and their families with in-home care services. Lenny Verkhoglaz and his wife and business partner Mila Feldman joined me on 105.5FM and Money 2.0 to discuss a Executive Care that they founded together 10 years ago.

Lenny discusses the kinds of services offered. Executive Care has both non-medical and medical services, including skilled nursing, geriatric care, personal care and housekeeping, to name a few. Although seniors constitute the largest portion of their business, Executive Care also caters to children and adults with chronic illnesses and mentally and physically disabled persons.

Lenny says people considering running an Executive Care franchise should know that he and Mila have developed and perfected their systems. They offer a very structured and lengthy training program that includes a variety of support systems. He notes that they offer new franchisees 6 months free-payroll and billing. They also offer 6 months free use of their technology platform and offer sliding scale royalties. Lenny says they really set franchisees up initially so they can concentrate on building the business and hiring the staff. Lenny, who has a background in technology, adds that their customized technology platform has been perfected for their business.

Lenny also discusses general trends in their industry. He says regulation is a big part of managing this business, from federal laws right down to the local level. He talks about how the aging of baby boomers presents a tremendous Business Opportunity for franchisees. He also notes that Obamacare may present even more opportunities.

Lenny closes with discussion on who the ideal franchise candidate is for Executive Care. He says persons with strong management, marketing skills, and a corporate background are a good fit. He says time management skills are also very critical in managing all the different elements that are a part of this business.

If you would like to hear my conversation with Lenny and Mila, you are welcome to listen by clicking here. Lenny and Mila were my second guests in this interview. The conversation begins 28 minutes into the recording.

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