Real Estate Gives You More Options

Commercial Real EstateOne of the challenges we sometimes face in putting together the sale of a business is real estate that is intertwined with the assets of the company.  Sometimes that’s the perfect way to run your company and you shouldn’t change it. Other times, the circumstances are such that rearranging things would be too costly and ineffective.  But given time, deliberation, and good advice, you can use the real estate that’s involved in your business to great advantage.

Control the Lease

We can tell you that we’ve seen deals that were on the way to the bank crash and burn because of mishandled landlord/lease situations.  This is why a lot of businesses situated in key real estate will seek to acquire the property and hence control the terms of the lease themselves.  Depending on how the property is being acquired (perhaps it will be with partners who are unrelated to the business) it could make sense to form an entity not related to the company that you’re operating so that there is a separation of assets, yet an alignment of interests.  By creating a different business entity, you’ve not only created a smart hedge against changing market conditions – either for your business or for real estate – but you’ve simplified a possible future sale of the business for a buyer.

Sell Either

The reason separating your real estate from your business makes things simple is that it provides more options.  You are free to, at any time, sell only the real estate and not the business, or only the business and not the real estate. Such a move allows you to take some money off the table right away while still watching how things play out.  It also means that a buyer interested in relocating the business can do so, since he/she no longer has to commit to buying real estate with your business.

Sell Both

But you may have an acquirer who seeks to have the same comfort you’ve had in owning these separate entities.  Because you’ve taken the time to separate them and keep them separate via responsible bookkeeping, accounting, and timely tax filings, now the real estate no longer becomes an “of course” part of the sale, but an option that can carry a premium.

There are many times in business when someone will say in retrospect, “I wish I had done it that way the first time.”  We know that business doesn’t always happen the way that it’s described in business books (or even blogs!) but real estate is one of the oldest and smartest forms of investment.  There’s every reason to put it to work for your business as a partner, in a separate entity.

We have a lot of real estate experience in our offices.  Give us a call to see if we can help offer some advice on your situation.

Should You Grow Through Acquisition?

growthThere are two ways you can grow your business: the fast way or the slow way.  What’s important is that there is no easy way.

Both have their pros and cons, and in this article, we’ll examine the question of whether you should grow your business through acquisitions.

Organic Growth

If you have the time and the money, organic growth is almost like compounding interest: it will happen as long as the fundamentals are sound.  

You can add new products or services, increase sales, increase market share, etc. This growth will be part of a narrative that will make for a valuable exit one day, but it is a day in the far future, as organic growth is slow.

Growth through Acquisition

On the other end of the spectrum is growth through acquisition.  You can instantly acquire new revenue, resources, and introductions to markets.  But you have to pay for it with time and money as well, just at a different pace.

  • You will have to pay for the acquisition.  Sometimes a good earnout can be negotiated with an outgoing seller, or good payment terms negotiated.  What is important is never to pay too much in cash or to take on too much debt.
  • You need to have a plan.  Since this business will need to be integrated with your existing one, you’ll need to have a plan as to how departments will come together, including the hard decisions to let some people go.  Those first 100 days after the acquisition are a key part of success.

Beware of Deal Fever

We’ve seen this illness before, and it can happen to the most rational and cool-blooded among us: like Ahab chasing the white whale, people can get lost chasing a deal.

  • Keep in mind that pursuing an acquisition can become a part-time job/project.  Don’t let yourself be distracted from your core business that you are looking to improve through this acquisition.  Either have someone (like a broker) help you through it, or make sure you delegate parts to your team so that you don’t take 2 steps forward only to take 2 steps back.
  • Don’t let deal fever blind you to the facts.  Sometimes we want a deal to happen badly enough that we will ignore our own due diligence and say our “gut” is telling us to move forward.  Deal fever can confuse you: that’s why it’s important to have an unbiased third party (like a broker) help you evaluate numbers and your integration plan.

It’s not binary.  You can grow organically and through acquisition.  What’s important is to stay focused and enjoy the journey, never letting present success go to our head as we plow forward to possible future success.

Are you considering making some acquisitions to grow your company?  Give us a call to see if we have any listings that are a good fit for you.

Alternative Financing for Growing Businesses

FinancingWe’ve said before how important it is to cultivate a relationship with your banker.  

Such a relationship will be important not just throughout the lifespan of your business but particularly when you want to craft an exit.  

That said, sometimes market conditions, or the conditions of your business, call for alternative forms of finance, and in this article we will discuss just three of the many possibilities in this growing space.

Lending Club

Of the many options in the fintech space, Lending Club is the most like a traditional bank.  They will require that you’ve been in business at least two years, with annual revenues of at least $75,000.

They will also make sure that the borrower has a minimum 620 credit score, with no recent bankruptcies, and at least 20% ownership of the business.  

All these factors get put into their internal rating system, and then once approved, your loan gets put into their marketplace, where various people can buy part of your loan. Once the note is fully funded, which can take as few as three days or as many as 21, the money is disbursed and you’re held to regular payments across terms like 36 months.

They don’t offer revolving credit and the rates can vary from 7.77% – 35.11%.  Depending on how good your credit profile is, it’s an interesting alternative if conditions don’t allow for a traditional bank loan.


If Lending Club is most like a bank, Kabbage is most like our future powered by artificial intelligence.  The platform is entirely algorithm-based, assisted by machine learning. There are no human parts in its credit decision process.  

You create an account and give Kabbage access to various accounts you use as a business owner, be it your credit card processor, your bank account, your email software, your social media accounts, and using all these different factors they will create a revolving offer against a 6-month repayment window.  

The effective interest rates can range from 15 – 50%, again depending on your business, rather than your personal credit, profile. There are no minimum revenue requirements, no personal guarantees, and with over $3B loaned since 2009, there is clearly a need for this type of financing.

PayPal Loans/PayPal Working Capital

The most specialized of the options we’re discussing in this article is Paypal Loans, which has also been called Paypal Working Capital.  This option is only available to you if any part of your business accepts payments via PayPal, because the funding mechanism examines your PayPal activity in the past 12 months and will allow you to borrow as much as 18% of topline revenue processed through PayPal (up to $97,000).  

Repayment is made as a percentage (which you can determine, depending on how quick/slow you want the repayment horizon to be) of each incoming sale, so repayments can be made daily if you’re processing payments at such a rate. PayPal provides the capital for a fixed fee, so there’s technically no interest charge, though you can calculate effective APRs to vary between 15 – 30%.

We also have access to some local resources that may be able to help you. Give us a call and let us see if we can help!

Three Key Questions When Considering the Leap to Business Ownership

three questionsThere are so many questions you might ask yourself when thinking about becoming a business owner.

In fact, we’ve addressed many of those concerns in previous articles, here and here.

But today we wanted to focus on three important ones that have to be answered.

Where will I get the money?

We’ve discussed various ways to get the money for buying a business in the past.

While it’s always best to just have a large amount of cash laying around, most of us are more likely to pull from multiple sources, including retirement accounts and SBA loans.

Exploring and understanding this step well (including a solid relationship with a banker) will give you the range of purchasing power you have. In addition, you’ll have a snapshot of the variety of businesses you could consider in that price range.

Do I buy a franchise or an existing business?

This has just as much to do with personality as anything else. Are you the sort of person who wants to follow a proven system or do you want to experiment, make mistakes (and find successes) through your own initiatives and trial and error?

Franchising offers the appeal of trial-tested methods, whereas your own business offers you flexibility and nimbleness that can’t exist at the level of a national brand.

Are the books in order?

On the broker side of the business, there’s nothing more unfortunate (or less surprising) than finding that a business doesn’t have its books in order. “Good enough” has been the standard for so many years, with no forethought of a future in which a buyer might want more than a box of receipts and incoherent financials.

A business with a solid and reliable set of books, not just for the current year, but for many years back in its history, tells you a lot about how the business is run and the priorities of the ownership and staff.

The books will show you where the opportunities and the weaknesses are. These are the medical records of that business. We try to avoid listing or representing a business that can’t supply historical financials or has troublesome tax issues. Make no mistake… you should be extra cautious when considering buying a business with those issues too.

Do you have follow up questions for any of the questions that we listed above, or any questions on any part of the buying process?  Give us a call at 913-383-2671. We’d love to help!

How SCORE Can Help You Build Your Business

mentoringSCORE, the Service Corps of Retired Executives, is a nonprofit supported by the SBA that offers counseling advice to business owners.

It’s powered by a network of 10,000 volunteers, mostly successful business owners and executives, who still love the sport of business and want a chance to help younger versions of themselves.

Because of the SBA funding and volunteer labor, a lot of this mentoring comes at no cost, whether in person at a local office, via email, or by video. They also offer workshops in person and on the web.  

While many entrepreneurs may form ad hoc advisory boards or lean on the advice of savvy investors who may be partnered with them, many more don’t really have a network to turn to in the early days.

SCORE can match that entrepreneur with someone of relevant experience or sometimes in the exact industry.  

Indeed, as you browse through the numerous success stories on their website, you get a sense of how diverse the mentorship can be… sometimes something as short as a few months, other times as long as a few years.

For example, Mutt’s Sauce was a Tennessee-based condiment company that had developed a local following. But when the recipe passed to his granddaughter after he passed away, with no other infrastructure or help, she turned to SCORE.

She got connected with someone who not only mentored her in how to start a food manufacturing business, but who also connected her with the right contacts to get her launched properly.

Sometimes it isn’t a new entrepreneur that needs mentorship, but one who has had a business for awhile and has run into a problem Karoun Yoga was just such a business, and after an initial explosion in growth, she found herself “drowning in expenses.”  

Her SCORE mentor walked her through Quickbooks so she knew her numbers better and she learned how to create financial reports that she not only understood but could use to improve her company. She also attended workshops on Google AdWords put on by her local SCORE chapter.

Even immigrants can benefit from SCORE, as Diego Tantardini discovered. He had two SCORE mentors meet with him regularly to go through numbers and helped him work on small-scale business plans, figuring out product/market fit.

What SCORE ultimately provides is trusted, dispassionate mentorship from those who’ve been there. If you’ve been wondering about mentorship as you build your company, it might be worth giving them a look.  

At Apex we can also provide you with connections to professional business coaches, networking groups, and other professionals to get you the help you need.

Is It Time to Revisit Why You’re Still Running Your Business?

As your business grows over the years, things change. You may come to find that the reasons you started the business aren’t the same reasons you’re running it now. Or even the reasons you aspire to in the years to come.

If you can’t easily answer “Why are you still running your business?”, it may be a good time to revisit why you started the business in the first place. Here are a few ideas:

Because you love the industry

If you were to look at some high profile industries, like surfing, coffee, or food, outsiders might look at them and say, “It would be so cool to have a business in that industry!” But in all likelihood those outsiders don’t realize these businesses aren’t just about celebrating something really enjoyable. They also have a lot of hidden challenges and difficulties that can’t be seen.

What keeps people in many companies year after year, decade after decade, generation after generation, is a true love of the industry.  If that love is still there through all the ups and downs of growing your company, you’ve got a good “why.”

Your Business WhyBecause you have great staff

Oftentimes people spend more time with their work colleagues than they do with their families and friends. Ideally that time shouldn’t just be tolerable, but enjoyable.

Camaraderie and a respectful spirit of collaboration often make all you do feel a lot less like work. Owners who are intentional about this process have created a great workplace that makes it a joy to be part of every day.  This is another good “why.”

Because you love the challenge

All business owners know that the sport of business is a daily, often hourly challenge. It will bring out the best in you and test your IQ (emotional and actual) in ways you couldn’t imagine.

The reality is that sometimes people are business owners simply because they couldn’t find a challenging-enough job to push them on a daily basis. Pushing yourself out of your comfort zone on a daily basis is another good “why.”

These are just three reasons to help you get the conversation started within yourself if you don’t really have a grasp on the “why.” As hard as you may work, you owe it to yourself to be able to answer that question when others ask.

Why You Should Hire for Cultural Fit First

culture fitIf Millennials have added anything to the conversation around hiring these days, it’s the idea that cultural fit matters.

You shouldn’t simply hire people who are competent and willing to do the work, but also who are excited to be with you and fit well into your established company culture.

What is a cultural fit?

An employee who is a cultural fit for your company is far more likely to be a “great” employee who has a future with you rather than the “good” employee who just manages to fill a role. This is because the employee who is a cultural fit is in alignment with the goals, beliefs, and attitudes of the company itself.

Your company culture may be a mirror of its customer-facing self. For anyone who’s ever flown Southwest Airlines, for example, it’s clear that the staff knows how to have fun and that they’re given full permission by the company to do just that. If you still need convincing, check out this safety announcement from a Southwest flight attendant, delivered in late 2016.  

But perhaps your clients don’t get to see your staff in the highly personal way that Southwest employees interact with their clients. In that case, make sure you have a good sense of what the company culture is and how it impacts your company brand. If you can’t answer that right away, no worries!  Think about the top three or four behaviors that are critical for success at your firm.  That’s a good base to start from.

What are some interview approaches to use?

Hopefully, you’re not one of those employers who uses absolutely useless cliche interview questions like, “Tell me your greatest weakness,” etc. But apart from asking good and thoughtful questions, you may not realize that it’s important to ask unexpected and unusual questions as well. Here are a few suggestions:

  • What does a typical weekend look like for you?
  • What values are important to you?
  • What type of team do you thrive in?
  • Based on what you’ve seen and heard so far, how would you define our company’s culture?
  • Why does the role you’re applying for have meaning for you?

In addition to questions, perhaps consider adding a personality test to the process, or even allow for some “white space” time in the interview, where you allow the candidate to guide and even lead the discussion. See how they perform in the absence of direction.

Why does this matter?

Ultimately this is an end-to-end issue, meaning, it’s just as important for the employee to be a cultural fit for you as it is for your company to be a cultural fit for the employee. When people are aligned with the values and practices of a company, they’re less likely to see work as some disconnected part of their day: a location they go to in order to earn a paycheck.

They’ll see their work as an extension of their life. They’ll stay with you longer…and they’ll inspire employees around them to greater heights. All of these results can only enliven and strengthen your company culture.

Apex is actively looking for Advisors to join our team. If you or someone you know would like to learn more, contact Doug Hubler at or 913-433-2303.

Should You Have a Business Partner?

“A contract isn’t in place for when things go right.
It’s to account for the possibility that things might go wrong.”

partnershipYou can google the title of this article and you’ll find hundreds, perhaps thousands, of articles, many of which take a position as to why you should “never” have a partner or “always” have a partner.

We’re not going to do that today, not only because we think such a binary answer to a question that involves humans, who are pretty complex in general, never mind when it comes to business, isn’t useful, but also because we really want you to step back and look at the larger issues in place when you consider a business partnership.

Have an agreement in place

Figure out how decisions are going to be made, who’s going to do what, what happens in the case of a death, a sale, or someone just getting tired of it all and wanting to quit. You’ll find that just the exercise of coming to an agreement as a valuable first proof of whether you should have a partnership…and whether you should have a partnership with this particular person.

What are your track records during tough personal situations?

If you aren’t well acquainted with a possible business partner, ask to speak to former employers and close friends and ask the tough questions. Difficulties are going to arise while running your business, and you need to know what’s going to happen to this person when the going gets tough. It’s easy to say, “I’ll hang in there,” but your past performance is your best indicator of future reactions.

Do you both feel equally strong about the business?

We know that sometimes in relationships one person feels stronger than the other. Try to avoid that here. You need to find someone who is enthusiastic about the business for their own reasons, not just because they get caught up in your excitement and get pulled along in your wake.

Are you friends already?

And are you willing to possibly sacrifice this friendship for this business? This is the non-business risk that you take when getting into a partnership with a friend. Things could end very badly, ending not just your partnership and business, but a friendship too. This obviously goes back in line with everything else we’ve discussed above.

Can you do this without each other?

Do you really need a partner? Or do you just need to hustle longer and harder? Sometimes people think they need a partner, but what they really need is to contemplate if they could do the business alone and calculate the possibilities.

Remember that anyone who tells you that you should “always” or “never” have business partners is going for an easy, oversimplified answer to a complicated question. The correct answer is…It depends, just as much on you as the potential partner.

Apex is actively looking for Advisors to join our team. If you or someone you know would like to learn more, contact Doug Hubler at or 913-433-2303.

Extreme Ownership: Apply This Technique Today To Improve Your Business

The concept of “Extreme Ownership” was coined by former Navy SEAL Jocko Willink. Jocko spent 20 years in the SEALs and retired in 2010 after serving as the commander of a SEAL Task Unit in Iraq.

Origin of the term

During an operation in which he was the commander, there was a friendly fire incident which resulted in the death of a member of the Iraqi military at the hands of one of his own SEALs.

The operation was immediately shut down and everyone came back to base. As Jocko spoke to different troops in order to get a bird’s eye view of what had happened moment by moment, he realized that it hadn’t been one particular thing that had gone wrong, but rather a number of things.  Troops had gone to the right locations at the wrong times, or gone to the wrong locations at the right times, for example.

With less than 20 minutes to go before the briefing, Jocko realized the answer: he was the single point of failure. He was the commander of the operation and if anything bad had happened, it was down to him. What he would later go on to call Extreme Ownership was realized, and he defines it as:

An attitude of not ever making excuses or blaming others. When problems arise you take ownership and solve them.”

Jocko WillinkApplication in your Business

What Jocko experienced when he implemented this strategy in his life can have significant benefits for your business, not just because it’s unexpected, but because it causes your colleagues and staff to pause and think.

When something goes wrong with a marketing campaign, or a customer service issue, or a product launch, instead of pointing the finger at a subordinate and letting the righteous anger flow, you can say, “It was my fault.”

What you’ll find is that your staff will more than willingly refuse to allow you to take all the blame yourself, and then willingly identify ways that they could have improved.

When you create a culture in which those at the very top are willing to take the blame for mistakes, you allow and encourage your staff to strive not to make those mistakes again. The entire company can be oriented towards positive resolutions of poor outcomes, rather than playing the old blame game, which has never been listed as a business principle to be lauded.

President Truman famously had a “The Buck Stops Here” sign on his desk.  Extreme Ownership allows you to fold a tangible daily practice of that saying into your business.

Jocko Willink is on Twitter.

Apex is actively looking for Advisors to join our team. If you or someone you know would like to learn more, contact Doug Hubler at or 913-433-2303.