Coworking Creates a Market in the Office Sector

REAL ESTATE
Coworking Creates an Emerging Market in the Office Sector
More small businesses are gravitating toward coshared office spaces to cut down on overhead expenses. This has created a new market for investors to explore.

The flexibility to rent a desk, office, or boardroom for a day, week, month, or year appeals to businesses that do not require a permanent space. As an investor, you can utilize this method to monetize the excess space in your existing buildings. For those wishing to take advantage of this emerging market, here are three things to consider before you jump in with your investments.

1. Attracting the right clientele is essential to creating an effective business model. Potential clients will be attracted by the available amenities and the available payment options. Failure to meet the expectations of your clientele will negatively impact your bottom line. Meeting or exceeding what your potential clientele desire will go a long way to securing the success of your business.

2. Payment models will vary based on your business model. Some cosharing operations offer daily, weekly, monthly, or annual payment options. Often, these rates can be scaled to the clients’ needs. A subscription service may be attractive to businesses that offer space in multiple locations, which may accommodate business that requires regular travel.

3. Amenities such as access to multifunction printers, high-speed internet, ample power, and an inviting office environment will appeal to potential office clients. How you choose to structure access to those amenities will depend on your location and the requirements of the tenants.


HOT BIZ TRENDS
Are Entrepreneurs Born or Are They Made?

What makes entrepreneurs successful? Is it how they’re wired? Is it a certain inherited ability, innate instinct, or genetic quirk?

The truth is, there are some inborn traits that characterize successful entrepreneurs. Entrepreneurs as a breed tend to be self-confident, action oriented, adaptable, and able to deal with uncertainty.

Attributes such as optimism, curiosity, risk tolerance, and moxie – not to mention the good luck of being in the right place at the right time to bring their ideas to market – all figure into the equation.

However, many of the qualities associated with entrepreneurial success are acquired through life experiences. These include patience, tenacity, self-discipline, a strong work ethic, and the ability to overcome failure and “keep on keeping on.”

Education matters too. You cannot achieve success as an entrepreneur unless you grasp the basic fundamentals of running a business and the dynamics of your particular industry.

And then there’s practice. Negotiating, problem solving, spotting trends, understanding markets and customers – these are skills that take time to master, and there is simply no substitute for practice.

Ultimately, the reason why some entrepreneurs are successful and others fail is not just good genes, brilliant insights, good luck, hard work, education, or practice. It is a combination of all of these things. Entrepreneurial success involves using innate skills as well as those learned or acquired along the way to build a successful business.

It has been said that “the harder you work, the luckier you get.” And while having entrepreneurial DNA may allow someone to hone the creative instincts and inborn attributes they possess, every successful entrepreneur must prove their DNA with hard work.


MANAGING
Building the Right Cash Reserve for Your Business

Knowledge and preparation are as constant in the life of an entrepreneur as the daily sunrise. Paramount to this ongoing focus is cash liquidity.

Upward trajectory in business requires incoming cash to exceed cash outflow. Keeping the bills paid when cash collections are low is an exercise in perseverance to achieve the ultimate objective of positive cash flow.

When cash flow is negative, you have to dip into a reserve that you’ve built as a safety net. The appropriate size of this cash reserve is related to the volatility of your sales. For a business with steady collection of revenue, reserving cash that covers a couple of months of overhead is probably sufficient.

If any uncommon cash crunch arises, you can still meet your obligations while making adjustments for a return to cash flow stability. To determine this figure, you merely need to know the amount of your recurring monthly costs.

Conversely, a business engaged in extended projects over many weeks may require enough cash reserve to pay for several months of expenses. The key measure is the average period that elapses between project start and customer payment. If there are delays in starting or getting paid, you can weather these times with an appropriate cash reserve.

Business owners with a lot of cash in their companies are frequently tempted to overspend. On the other hand, holding more cash than is needed as a reserve is inefficient.

Once you identify a sound amount of emergency cash to hold in reserve, any excess may be deployed to grow your business.


REAL ESTATE
Multi-Unit Residential: A Great Place to Start Investing
Multi-unit residential properties are an affordable way to start investing in commercial real estate. Duplexes, triplexes, and fourplexes can often provide a better value for new investors than a traditional detached home. These multi-unit buildings also allow for an owner-occupied unit, while rent from the other units helps pay down the mortgage. There are important considerations to be made before making the leap into real estate investment. Here are five tips to help you get started.

1. Financing is more complex. When purchasing a traditional residential home, a 5%-10% down payment may be adequate. For the purchase of a multi-unit property, a larger percentage is necessary. Multi-unit properties require down payments in the 15%-25% range or higher, depending on the lender. Financial institutions may also require proof of experience relating to property management and/or a strong investment plan during the qualification process. Consultation with your legal advisor and accountant will be helpful during the financing process.

2. Location, location, location. When it comes to multi-unit residential buildings, many municipalities have zoning regulations. These will limit the number of viable properties in your immediate area. This, in turn, may create considerable travel time between your workplace and your new investment property, or it may require the assistance of a local property management company. Be prepared to factor these costs and effects into your investment plan.

3. Property valuation. Consultation with real estate appraisers and other professionals plays a pivotal role in the selection and financing process. The property value will differ somewhat, depending on the purpose of the valuation being completed; however, a large discrepancy from one organization to another will raise a red flag for the lender. If the numbers seem too good to be true, further investigation is recommended.

4. Timing is everything. When selecting your first investment property, timing will be important. If you take too long to complete your due diligence, you may lose out to a more experienced investor. On the other hand, jumping in too quickly will likely cost you more money. It is easy to get caught up in the excitement of your first investment purchase and overlook a key factor that may cost you down the road. Take the time to consult with your legal advisor, accountant, and real estate advisor before finalizing negotiations.

5. Tenant assumption vs. selecting new tenants. While it sounds ideal to purchase a fully occupied building, there are risks to assuming existing tenants. As a new investor, you may be unfamiliar with the complexities of landlord-tenant regulations. If you are uninformed about key aspects of these guidelines, your property selection can prove to be a costly challenge. Additionally, it is not uncommon for tenants to become unsettled during the sale process, perceiving uncertainty in their tenancy. One method to improve tenant relations is to work with the seller to provide accurate and timely notices to the tenants regarding all transactions. This includes future rent payments, any postdated payments already provided to the current landlord, and any major renovation plans that may impact existing tenants.

SA Realty Watch Group
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How to Win Big in Today’s Economy
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Worth Reading
Five Ways to Become a Workplace “Yoda”
By Maya Hu-Chan
Inc.com

Too often, employees and managers avoid giving and receiving feedback. Employees view feedback with dread, while managers often find the process to be awkward and uncomfortable. But being intentional about giving frequent, positive feedback is one of the best things managers can do to boost morale, build trust, and help grow business. Learn why and how with these five easy steps.

Coaching Is Not about Getting Good
By Jim Keenan

Forbes

Do you work in an environment that fosters a culture of growth and constant learning? Most of us don’t. In fact, most managers focus their coaching efforts on underperformers and neglect their middle and top performers because they’re “already good.” What’s forgotten here is that good is not the goal-getting better is. Remember: everyone needs coaching because everyone can get better.

What Is GDPR and How Can It Impact Your Business?
By Brian Hughes

Small Business Trends

You might have heard that the General Data Protection Regulation (GDPR) is coming this month – and it will impact businesses across the globe. But what is this GDPR? It will come into effect on May 25, two years after it was introduced by the European Union with the aim of giving citizens power over their data and personal information. No matter where you live in the world, you’ll likely be impacted.


LINKS YOU CAN USE
Hiring and Firing
They are two of the most difficult things you must do as a business owner. They also have a significant impact on your success. Hiring and firing are key tasks that must be done properly to keep your company moving in the right direction. Use the following as a road map:

When you need a new hire yesterday, it’s hard to be patient. Here’s why you should slow down your hiring process:
The Best Strategy To Finding the Right Team

Sometimes you simply need to let someone go. Follow these ten tips to do it right:
10 Steps Needed to Properly Fire Someone

What trends are in store for recruiting and hiring in today’s marketplace? Find out here:
Nine Recruiting And Job Search Trends

If you tend to hire for “the right fit,” reconsider your strategy. Here’s why:
How to Hire

There are certain things you should never do when you fire someone. Discover the top ten here:
Top 10 Don’ts When You Fire an Employee

This newsletter and any information contained herein are intended for general informational purposes only and should not be construed as legal, financial or medical advice. The publisher takes great efforts to ensure the accuracy of information contained in this newsletter. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published in this newsletter.
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