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The Beginner's Guide to Operating Agreements for Business Partners
Often when I have my initial consultation with a new client, and we get to the "operating agreement" section, I am looking back at a deer in the headlights look. I usually do not need the OA to secure a lease, but if you have a partner, you will want one in place before you open the doors or form your LLC. Starting a business partnership is an exciting endeavor, but it's crucial to establish a solid foundation to ensure smooth operations and a harmonious working relationship. One of the key tools in achieving this is an operating agreement. In this beginner's guide, we'll walk you through the ins and outs of operating agreements for business partners, providing you with the knowledge you need to create a successful and lasting partnership. Before we dive into the details, let's lay down the basics. An operating agreement is a legal document that outlines the structure, responsibilities, and rules governing a business partnership. It acts as a roadmap, helping partners navigate various situations and ensuring everyone is on the same page. Key Elements of an Operating Agreement Creating a comprehensive operating agreement requires addressing several critical components: Ownership and Management Structure: Clearly define each partner's ownership percentage and their roles in the business. This section sets the stage for decision-making and profit-sharing. Allocating Profits, Losses, and Distribution of Assets: Determine how profits and losses will be divided among partners. Additionally, outline the process for distributing assets if the partnership ends. Decision-Making Processes and Voting Rights: Establish the mechanisms for making business decisions. Will decisions require a unanimous vote, a majority vote, or a supermajority? Clarify each partner's voting rights. Roles and Responsibilities of Each Partner: Specify the responsibilities of each partner. This helps prevent misunderstandings and ensures that everyone contributes effectively to the business's success. Customizing Financial Arrangements: Finances are a cornerstone of any business partnership. Tailoring financial arrangements to your partnership's needs is essential: Capital Contributions: Determine how much each partner will invest initially. This defines the financial commitment of each partner to the business. Profits and Losses: Choose between proportional or differentiated allocations of profits and losses. Consider what's fair and aligns with each partner's contributions. Distribution of Assets: Outline the timing and method of distributing profits. This ensures that partners benefit from their investments and hard work. Governance and Decision-Making Protocols: Efficient decision-making is vital for the partnership's success: Establishing Decision-Making Authority: Clearly define who has decision-making authority in various aspects of the business. This avoids confusion and streamlines operations. Voting Mechanisms: Determine how voting will occur for different decisions. Having predefined rules ensures that decisions are made fairly and efficiently. Addressing Deadlocks and Conflict Resolution: Plan for situations where partners disagree or reach a deadlock. Having a process in place for conflict resolution prevents business stagnation. Management and Operational Duties: To keep the partnership running smoothly, responsibilities and leadership must be defined: Designating Leadership Roles: Choose whether the partnership will have designated managers or whether the partners will make decisions collectively. Day-to-Day Operations: Clearly outline each partner's operational responsibilities. This ensures that tasks are evenly distributed and executed effectively. Bringing in New Partners: If your partnership grows, decide how new partners will be admitted. Clarify the approval process and criteria for new members. Capitalizing on Flexibility: Business landscapes change, so your operating agreement should be adaptable: Allowing Amendments and Modifications: Build flexibility into your agreement by allowing amendments when necessary. Businesses evolve, and your agreement should reflect those changes. Adapting to Changing Business Environment: Consider including provisions for dealing with unexpected changes, such as shifts in market conditions or technological advancements. Exit Strategies: Outline procedures for partners leaving the business: address buyouts, transfers, or the dissolution of the partnership. Operating agreements are more than legal documents – they are the foundation of a successful business partnership. By understanding and customizing the key elements, financial arrangements, decision-making protocols, and more, you can set your partnership up for success. Remember, seeking legal advice to create a well-crafted operating agreement is a smart move that ensures your partnership's longevity and prosperity. For more information contact me.
Top 10 Resources for Small Business Owners in 2023
BY: Travis Bryenton Every business needs resources, especially new businesses. I suggest you dive deeply into this list BEFORE starting your business in 2023. # 1 - U.S. Small Business Administration Possibly the most extensive set of resources comes from the Federal Government. They are your tax dollars, so get your money's worth! https://www.sba.gov/ Created in 1953, the U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream. SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses." #2 - The UGA Small Business Development Center "The Small Business Development Center (SBDC) provides tools, training, and resources to help small businesses grow and succeed. Designated as one of Georgia’s top providers of small business assistance, the SBDC has 18 offices ranging from Rome to Valdosta to serve the needs of Georgia’s business community. Since 1977, our network of partners has helped construct a statewide ecosystem to foster the spirit, support, and success of hundreds of thousands of entrepreneurs and innovators. The Small Business Development Center, a Public Service and Outreach Extension of The University of Georgia, is funded in part by the U.S. Small Business Administration (SBA). The University of Georgia Small Business Development Center is nationally accredited by the Association of SBDCs." https://www.georgiasbdc.org/ Download the UGA Start Up Basics Guide Here (Go Dawgs!) #3 Score Atlanta Chapter https://www.score.org/northmetroatlanta SCORE, the nation’s largest network of volunteer, expert business mentors, is dedicated to helping small businesses get off the ground, grow and achieve their goals. Since 1964, we have provided education and mentorship to more than 11 million entrepreneurs. #4 Industry Trade Groups Do not overlook Industry trade groups. Trade Groups often provide networking events and industry insights, and these groups also advocate for your industry on the legislative front. The best way to find industry-specific trade groups is through a google search of Linkedin. #5 LinkedIn LinkedIn is THE social network for working professionals. This is a great place to get industry-specific information, events, local resources, and networking. If you are not already on here, sign up today. https://www.linkedin.com/ Bonus --> 17 Top Business Podcast of 2022 From LinkedIn Founded in 2003, LinkedIn connects the world's professionals to make them more productive and successful. With more than 850 million members worldwide, including executives from every Fortune 500 company, LinkedIn is the world's largest professional network. The company has a diversified business model with revenue coming from Talent Solutions, Marketing Solutions, Sales Solutions and Premium Subscriptions products. Headquartered in Silicon Valley, LinkedIn has offices across the globe. #6 IRS - Small Business and Self-Employed Tax Center What you will find here. Not that anybody loves paying taxes, but it is a significant aspect of your business. I would also recommend you find a good CPA. https://www.irs.gov/businesses/small-businesses-self-employed Resources for taxpayers who file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million. #7 Facebook Love it or Hate it; you still need it. Facebook is still one of the top dogs for getting your message out. Set up your business page and get posting! Learn how to Boost a post for more outreach and to grow your audience. https://www.facebook.com/business/small-business and Like my Facebook Page here -->> https://www.facebook.com/BuckheadTravis #8 Small Business with Google Google is still the King of Small Business and SEO (Search Engine Optimization); if you do not know the term, you will soon embrace it and nurture your inner SEO guru to build up a brand and people at your door https://smallbusiness.withgoogle.com/#!/ . Click HERE for this Great Circleboom Blog Post #9 Local Mentor The internet is all great and all, but sometimes you just need a human to talk to. Find someone who has been there and is willing to help you. However, do not just take from them; find a way to give back or provide value to this person in your own way. #10 Your Commercial Real Estate Agent - Me All businesses need a home. Once you outgrow your garage or kitchen table, you will need a new home away from home. Some businesses need space right away to get going (retail stores, salons, automotive shops), and others can grow into that space over time. But no matter your timeframe, you will want a commercial agent (ME) to help you. Why? Save yourself time and money by using an expert. Leasing a space is a serious financial commitment for your business; often, this is a five-year commitment with a personal guarantee attached to it. You want to ensure this is done right! We help you save time and money by making sure you are prepared to hit the market. We do all the leg work to actually go see places, so you can concentrate on the other aspects of your business, like making money! And very importantly, we provide representation with the landlords that helps protect your business in ways you may not have thought of (because we have done this before). The best part of this is that almost all the time, there is ZERO cost to you. So the real question is, why would you go it alone?
REPORT: Retail Vacancy Lowest Since Before Great Financial Crisis
Original Article by: January 13, 2023 Dees Stribling, Bisnow National (see link below) Similar to the residential market, the commercial markets have a very low inventory. This is especially true when new business owners are looking for retail space. Low Inventory + Strong Demand = Higher Prices. If you know of anybody looking for a space, could you call me for a free consultation before they start looking? And remember, never shop without an agent.
"During the fourth quarter of 2022, vacancies overall dropped 20 basis points to 5.7%, the lowest that particular metric has been since 2007, just before the onset of the Great Financial Crisis, the company reports.
Moreover, asking rents for shopping centers rose during the quarter by 0.8% to an average of $22.99 per SF, as the nation experienced a net positive of 10.9M SF of retail space absorption and low levels of new development. That was the seventh quarter in a row of positive U.S. retail absorption." Read the Full BizNow article here.
New Listing - 4176 Laurel Creek
Location is everything, and this Townhome is the center of it all. 4 Bedrooms, 3.5 Bathrooms Prime Location in Smyrna! This beautiful Townhome features an open floorplan, a main level fireplace, a home office or 4th bedroom, three decks, a flex room downstairs, and more! Recently updated with fresh paint. The kitchen has brand-new hardware, gorgeous granite countertops, stainless steel appliances, and a breakfast bar. The open floor plan on the main level is perfect for entertaining guests or spreading out. The owner's suite features a sitting area, a private deck, and a large bathroom with a soaking tub and shower. Located between S Cobb and Atlanta Rd, you can access everything within minutes. Work from home and take off for lunch on the Silver Comet Trail or meet friends at the Battery for lunch! It's all here! This home has the following upgrades: Added recessed lighting to the living room Added pendant lighting above the kitchen countertop Upgraded the living room chandeliers. Upgraded microwave Change owners suite bedroom floor from carpet to LVP Upgraded floor tile to the kitchen refrigerator area on the main floor. Fresh Paint Upgraded the master bath walk-in shower glass to frameless glass.
What does it take to qualify for a commercial real estate loan?
To qualify for a commercial real estate loan, be prepared to show the lender your business financials, personal and business credit scores, financial history, as well as a down payment of at least 20% of the property’s value . Different lenders will have different requirements for commercial real estate loans. For example, online lenders tend to be more lenient, and may not require as large of a down payment. Banks, on the other hand, tend to have the strictest requirements. If you’re applying for a commercial real estate loan at a bank, you should expect to have good credit, at least two years of business history, and a minimum of $250,000 in annual revenue. Despite these differences among various lenders, there are still some common similarities. For example, solid credit, a high down payment, and a low loan-to-value ratio will almost always help you secure lower interest rates no matter what type of lender you work with. It’s always best to be on the prepared side before you approach a lender. At a glance, here’s what you should expect to provide: Business financials, including balance sheets, bank statements, tax returns, profit and loss statements, debt to equity ratio, cash flow history and projections, and debt schedule Down payment of at least 20% or more of the property’s value Personal and business credit scores Legal documents, including business licenses and registrations Financial history, including bankruptcy or liens Keep in mind that a higher down payment will help keep both your interest rates and your monthly payments low. If you need more information please contact Peter Charland Jr. KW Commercial Capital Markets P (702) 803-2826 | E PJCharland@kw.com 6180 Brent Thurman Way #100 | Las Vegas, NV 89148
10 Ways to Establish Expectations in Today's Hyper-Low Inventory
Listing Management for Solo Agent - 2021 Version I am sending this out to help some of you, mostly solo agents, manage your listing during this period of 20 to 40 offers on every listing. Why am I doing this? Let's just say lessons learned, as I am just coming off an extremely hot listing where I received over 700 text messages, 300 phone calls, and who knows how many emails in four days; this took me out of my daily life while consuming almost every minute for a week. The intensity of the inbound communication prevented me from doing other work tasks, keep up with my sellers, oh yeah...and about that family. I guess the marketing package really did work!!! Do send out an Offer Instructions Sheet . This will help establish expectations with your buyer's agents and their clients. I try not to get into the weeds of earnest money, DD days, appraisal contingency, and other details like that; I want to see which agents are already smart about these details. I do suggest closing attorneys, closing dates, and special stipulations. I also require all offers to be written upon Georgia Association of REALTORS forms; all offers have to be sent via PDF and load the details into my KW Listing URL (In Command for KW agents). I send the offer instructions separate from the seller's disclosures, so it is easy for the buyer's agent to use. Of course, you have to present all offers to your sellers, this system is not foolproof, and agents will be agents, so you still have to keep track of and present all offers no matter how they come, but this does help. Use Calendly: If you want to control your showings, use your own private system to control access. I require the agents to send me the pre-approval letter, and only then will I send them a link to my scheduling calendar (already set up). I also put in the private remarks; "appointment only, no supra, email Travis your pre-approval letter for showing" https://calendly.com/ Keller Williams Agents set up a listing URL on Comand (Under your opportunities and "Offers and Commissions"). This will help you keep track of your multiple offers. Send out the URL to all the interested selling agents and put it in your Offer Instructions and on every email to the buyer's agents. If you are not a KW Agent, let's talk! Pricing. I did a great job pricing this listing. I researched all the comps for weeks, followed the market, made adjustments for the current environment, and held strong with my sellers who wanted to raise the price. I held the price at $450k to capture as many buyers as possible . I wanted ALL the $425 to $450 buyers and ALL the $450+ group; BIG MISTAKE! Pareto himself would have smacked me for this one. 80% of the "work" I was doing qualifying agents and buyers were in the "up to $450" camp; these buyers all dropped out when they realized $450 wasn't going to cut it. Many of them had scheduled appointments and dropped them the night or minutes before their appointments or just didn't show up. Almost every agent (who got back to me) said their buyers were capped at a hard $450. In retrospect, if I would have raised the price by even a dollar, I would be on the bottom end of the $450+ group, thus allowing well-qualified buyers to duke it out, and 100% of my"work" would have been with this group and not wasted. Ask for follow-up. Look, all of this information is coming directly to me, not my 1-800 number, not my assistant, not my listing coordinator's assistant's assistant; NO- directly to me and my little iPhone. I ask the buyer's agent to keep following up with me until I confirmed receipt of their offer. If they just sent in a blind offer and never reached out to me....well.... that was like 200 emails ago at this point in time, and that offer just went into the cloud somewhere, and that's not serving the buyers either. Communicate Often with your Buyers Agents. Sending out regular emails will help eliminate your calls and text. Buyers and agents hate uncertainty; keep them posted where you are in the process, or they will ask. Update the Public and Private remarks on the MLS as quickly and often as needed. (See #5). I also would suggest adding "pre-approval letter required for showings" in the public remarks to reduce unqualified inquiries. Maybe don't put "Text listing agent" in the private remarks...just saying. Use Dropbox for all Offers. I set up a shared folder in Dropbox and had my sellers set up the notifications so when I sent in a new offer, they were aware and could review it. I renamed each offer with the selling agent's name and offer amount. "John Smith Offer - 200K - Cash" since every offer comes in as "Offer for 123 Main St" or "Multiple Documents." Print Out Offers . Well, not the entire offer. I print out the offer page, special stipulations, and signature page. I would then create a chicken scratch note section to make sure all the offers were uploaded to DropBox (DB), entered in Command (C) under "Offers & Commissions", and any special stipulations (SS) were noted. Use whatever system you want, but this works well for me. I can also very quickly reference an offer when an agent calls. No matter what you do, keep a record of your process, all your offers, and communications about those offers; you may need to reference it in the future. 10. Use a Transaction Coordinator. Enough Said Hopefully, these will help you. These are also only suggestions, not laws. Please let me know if you have more suggestions or improvements on these. - Travis (still recovering, but the wine is helping)
Atlanta REALTORS® Releases January 2021 Statistics on Housing Market
The Atlanta REALTORS® Market Brief examines sales, prices in the 11-county metro area . Atlanta, GA (February 16, 2021) – Atlanta REALTORS® Association (ARA), the largest association of its kind in Georgia, released its January 2021 Market Brief on residential housing statistics for 11 area counties in metropolitan Atlanta. The Market Brief, compiled by First Multiple Listing Service (FMLS), provides the only regionally-focused synopsis of monthly sales and home prices for single-family residential properties. Demand : January residential sales were at 4,421, an increase of 1.0% from the previous year. Price : Average and median sales prices continue to outpace 2020’s figures, with positive gains. The median sales price in January was $309,000, an increase of 17.9% from last January. The average sales price was $379,000, up 17.9% from the previous year. Supply : Atlanta area housing inventory totaled 8,133 units in January, a decrease of 48.5% from January 2020. New listings totaled 6,679, down 19.4% from January 2020 and up 27.1% from the previous month. The month’s supply over a 12-month period decreased to 1.2 months. Largest Metro Counties Sales Comparison A Word from 2021 Atlanta REALTORS® President Cynthia Lippert: "The strong year over year gains in 2020 continued into the first month of 2021 as predicted, with sales up slightly from last January," stated Cynthia Lippert, 2021 President of the Atlanta REALTORS® Association. “Even with sales increasing, the market is constrained by the ongoing decrease in available inventory as it was further reduced in January to 1.2 months supply.” “As the gap between supply and demand continues to widen, we should be mindful of the more pronounced effect of this trend on affordable housing and its impact on the local economy,” Lippert adds. “Average and Median prices are up almost 18% which means already low inventory levels in lower price points will continue to dwindle, putting further strain on entire segments of the market.” The Atlanta REALTORS® Market Brief is designed to offer an overview of the Atlanta residential market by providing a synopsis of sales and home prices, and covers 11 counties: Cherokee, Clayton, Cobb, DeKalb, Douglas, Forsyth, Fulton, Gwinnett, Fayette, Henry and Paulding. The numbers in the reports are updated each month to reflect any additional recordings from the previous month. Each month, the numbers reported for the previous month are updated to reflect additional recordings. More information : https://www.atlantarealtors.com/resources/atlanta-realtors-market-brief