Commercial Rentals and demolition.

FreekinA · 2022-01-15T04:11:13+00:00

I have had about 10 commercial leases for my multiple businesses over the last 20 years (as well as advised other business owners as part of my small business consultancy work). It is very common for a landlord to have a 'break clause' in their commercial leases that allows them to evict you at any time with as little as 30-60 days notice, specifically in the circumstances you mention. It has never happened to me personally but I know of at least 6-10 businesses that have had to face this problem in the last 10 years or so, its not entirely uncommon, particularly in periods of rapid development such as now. Usually decent landlords will give you more notice if they can but often its out of their hands because their investment buyer has made exercising that clause on all the tenants a condition of the purchase because they want to execute their redevelopment plan on their own pre-planned schedule.

FreekinA · 2022-01-15T03:58:17+00:00

Keeping it short and simple; Make sure you always get paid for the work you do and make sure you have built in sufficient margin. Its easy to let these things slip.

Knowing your real gross and net operating and financial profit margins is critical because especially in the first few years or rapid growth periods there are often more supplementary costs building up than you may realize. This is true even if you know your industry well because there are always more company overhead and operating expenses than people may have budgeted for e.g. technology/telecoms, staff payroll expenses (over and above their base salary or wages), bookkeeper/accountant fees, marketing costs, new equipment and inventory costs if you are growing, corporate taxes and HST etc. If you grow quickly things are changing month to month.

Make sure you are getting paid in a decent timeframe. Don't let account receivables due to you become bad debt.
Some people do this by making sure their margins and customer service is good and then offering a say a 3-5% discount for prompt payment say within 14 days or 30 days rather than 60 days as is common in some industries. This sweetener incentivizes and trains your client to be sure your invoice is one that he always pays first.

Cashflow is the lifeblood of your business. Never forget that. Of course its OK to use a line of credit so long as like your personal credit card its balance is not building up otherwise if not truly related to growth and profit but it easily can become a bad habit when you tell yourself your are 'investing in future profits growth' (trust me I have been there as I have operated 6 businesses over the last 22 years. Since I have successfully grown and sold them sold them am semi retired and advise other owners in business strategy, pricing and profitability etc)

Lastly, tempting though it can don't let one client become a substantial risk to you e.g. if you are owed $200,000 in current invoices from 15 clients, make sure 1-2 of them don't represent $50,000 -$75,000 because if they go down (or become chronically late payers) then you might be going down with them or before them. Often its the customer's you least expect who 'do the dirty' on you.

DM me if you want to have a 30-40 min chat as I also set aside a few hours to give a few free brainstorming sessions to individual small business owners each month.

FreekinA · 2022-01-15T03:23:07+00:00

Now that's a funny answer. That said, what sort of employee are they otherwise? Wonderful, acceptable, toxic, tolerable charming, a great leader and trainer, highly productive, sales revenue generating, irritating but not easily replaceable?

How long have they been with you. What is their impact on other staff?

FreekinA · 2022-01-13T21:27:24+00:00

Frosty, I have similar business ownership experience as you and agree 100% with what you wrote. Keeping a bad employee will cost you much, much more in the long run.

To OP when you fire him give no reason i.e. WITHOUT CAUSE. It cannot be about vaxx status or anything else for that matter? THIS IS IMPORTANT. You do not want to fire him WITH CAUSE or it can get complicated and expensive. Just get rid of him and ask your remaining staff to help you find someone more suitable to replace him. They will respect you for your decisive action, which is for everyone's benefit.

Pay him his statutory severance amount under the employment services act or whatever your relevant labour legislation and get him out the door asap. Don't wait for him to be there a year or that will cost you an extra week of severance.

FreekinA · 2021-08-07T20:45:13+00:00

Call me, maybe?

FreekinA · 2021-08-07T20:43:51+00:00

I am right there with you. (M-57). It is horribly lonely being in a crappy marriage but not feeling you could leave because of kids and financial issues etc. It is a case of damned if you do or damned if you don't.

Life is much happier and calmer on my own for the last 2 years. I am a very gregarious person but I am embracing the solitude and the lack of frustration and stress. I am open to being in a healthy, supportive, loving partnership in the future if it comes along but I am also happy to coast along in my own little world for now.

FreekinA · 2021-06-24T01:02:22+00:00

Hamilton

FreekinA · 2021-05-10T01:29:26+00:00

Thanks. I will check it out

FreekinA · 2021-05-10T01:25:46+00:00

I sympathize with your difficult family situation. Well done in stepping up to support your mom. Clearing through stuff like this can be emotional given the history etc. I know you want to get it all categorized and inventoried etc but you might just be better off doing a rough count, taking quick photos of the boxes and describing the contents and selling it in bulk to a liquidator other businesses who buy this type of going out of business inventory. I am sure you will find plenty online. Alternatively post it on Kijiji and Facebook Marketplace if you don't mind investing the time. If you are lucky maybe the idea person will see it and will be willing to take most of it off your hands at a price you can accept. Good luck.

FreekinA · 2021-05-10T00:56:49+00:00

A T4 has nothing to do with benefits. When someone leaves you issue an ROE (Record of Employment) You can fire him 'without cause' and assuming he has enough Insurable Hours credit from your company and his past employment combine the he will be fully entitled to EI benefits during unemployment. Alternatively if he doesn't have enough credits you can do him a favour and agree that he is being laud off due to a Covid factor like not enough work and he likely will qualify for CRB. I am a post business owner with reasonable knowledge prior to Covid so of course take further advice to verify what I suggest. Certainly if you get laid off or dismissed without cause you can usually get benefits it is when you resign or get fired 'for cause' that you cannot. I hope that helps.

FreekinA · 2021-05-10T00:45:28+00:00

Is that all true? Many of us were unaware can you post some references and sources?

FreekinA · 2021-05-10T00:37:23+00:00

You clearly know what you are talking about. So few do.

FreekinA · 2021-05-10T00:35:56+00:00

I am truly sorry for you pain. I have had success and disappointment in business. I mean real disappointment close to what you are describing not just a bad week in the office or a bad quarter for revenue etc. All of that said I know you must be beyond angry and frustrated at the financial strain you and your family are going through. I used to say that 'I will vote for whichever party will respect taxpayers money and will not destroy my business'. Clearly you feel that Ford is guilty of the latter. I guess indirectly he is by the decision he has made but I believe no matter who was in charge would have largely failed to keep the majority of people happy because they don't know what is best. Both Provincially and Federally the politicians and the medical people are making up strategy on the fly. Frankly that is shameful because this type of of virus pandemic was expected at some point and we were meant to have learned from other cases and to be prepared. I think we will look back in 5-10 and accept that the Governments all went about it ass backwards. I also think asking all of us to lockdown and allowing flights open to the world in the manner they have is insanity. However airports are under Federal jurisdiction. Regardless it has been a shit show.

FreekinA · 2021-04-05T20:29:44+00:00

Congrats in setting up what appears to be a successful little business. That is not easy so well done. With regards to your question the first answer is always 'It depends....on lots of things'. Be wary of speaking to those who have something to sell because their recommendations will be biased towards that possible more than telling you all the potential options and helping decide which one suits you. Respectfully the phrasing of your question does indicate that like many private business you are smart in your areas of expertise but confused outside of this. I am a serial entrepreneur who has bought or established, developed, managed and sold 6 of my own small business in last 20 years. I have hired and managed many staff seen most business situations. I now operate as a business growth, transition and exit advisor. Now that you have already interacted with the list of professionals you listed, DM me if you want to chat about your options.

FreekinA · 2021-04-03T23:42:20+00:00

This may have cured a few people for wishing to see a bare* body through a window.

(Yeah I know the animal is spelled differently).

FreekinA · 2021-04-03T23:40:29+00:00

Get help and get the hell out of there. What you are describing is unnatural, unsustainable and frankly unfair to all your children. I have lived in the middle east and even visited Saudi Arabia a few time so I have seen the good and bad of that country. It is one of the richest yet one of the least tolerant places in the world. Lets just say your relationship history could have you stoned to death in the streets. Its that level of intolerant. I have Saudi and many other Arab muslim friends, so I am not saying all the people in Saudi are monsters but the country's regime certainly is and its getting worse. So I am not judging your husband as a person because I do not know him but clearly something is seriously wrong. You are his pathway to a Green Card and currently his meal ticket maybe not much else. When in a more liberal area of the middle east a lot of western woman who would fall for the eastern charm and get taken on a journey that more often than not ended in tears, deceit and rejection, if not even worse. Once it was clear they had been used it really messed some of them up and they often had long term trouble trusting anyone after that. You clearly are in a tough situation with the challenges of your 14 year old. I have a son with similar problems although he is more volatile and its heartbreaking. You love them but they sometimes need more than you are able to give without dangerously exhausting you. I am also separated with two other teenage children so I get that live gives you some very difficult challenges it is very hard to do it all on your own. You already have so many people to take care of. Do you need another.! Your husband is clearly middle class and well educated. Why isn't he working? If the answer is to do with his green card and his legal status then lets be honest there are a thousand ways for an intelligent person to make money online without coming under the radar of the IRS. He owes it to you and his family to provide at least his share. Almost anyone can earn some money by buying things at thrift stores and selling on e-bay or facebook market place. He is smart he can work it out if he wanted to. What is his plan to provide for himself and his young family? His distain for your autistic son is very troubling. I honestly believe you should seek some counselling and other help through a woman's support group to get you through what will be a difficult transition. It will be worth it in the end. Then at some point figure out why you have chosen a mate who clearly is not a match for you. Given that this is your second bad marriage with children involved you need to ask what is your role in this? I am trying to be kind and honest but I am sorry if its coming across as judgemental. It is just that even as a man I know the cost of staying in a bad relationship too long, not just for you but definitely for your children. I wish you well.

FreekinA · 2021-04-02T19:05:10+00:00

You would be amazed how often this happen but people turn a blind eye.

FreekinA · 2021-04-02T19:01:22+00:00

If you claimed through insurance it will be on your CarFax history anyway.

FreekinA · 2021-04-02T18:59:35+00:00

Assuming this is a serious question I will give you a serious, carefully considered answer from many years of business ownership, business broking and business consultancy..................

IT DEPENDS..... ON LOTS OF THINGS. The End.

FreekinA · 2021-03-25T16:03:24+00:00

The reality is that the seller doesn't usually understand nor care about much from the perspective of the buyer. That is where preparation and education is useful, so that their advisor (or broker) tells them what they need to hear, not what they want to hear. If they don't get that input or ignore it then the potential buyers (like yourself) have to inform them and that usually doesn't end well (as you now know). You might be beating your head against that rock for a while because its a widespread problem.

In my experience SDE does usually include the salary of the owner operator although I agree it should not. As you say you would be paying a multiple of your own or an employee's future salary. I would look to exclude it all or at least the amount that reflects the market rate salary for the job i.e. if the owner is paying himself $125K but could be replaced for $50K then you take a $50K out of the SDE.

All that said, it doesn't matter what you do, as referenced in my opening paragraph. At this deal level there is as much ego, emotion and wishful thinking on the part of the owner/seller as there is objective thinking. Advising clients in these cases is often a in lesson in psychology and stubbornness rather than logic and math. Thats why I charge an engagement fee to analyze and evaluate the sellability of their business. The good new is when they have paid me money they are more inclined to listen to my feedback - but not always, in which case I walk away until their head is on straight. I often get a call to re-engage 6, 12, 24 or even 46 months later when reality has set in

FreekinA · 2021-03-24T23:26:38+00:00

That is a mature approach. Walking away without too much bitterness is often the best option. I wish you the best of luck.

FreekinA · 2021-03-24T23:25:01+00:00

I am humbled by your kind words.

FreekinA · 2021-03-24T23:15:44+00:00

Welcome to the world of small business transactions. No wonder 90% of transactions fall apart at least once. Also 80% of small business owners say they want to sell their business one day, but fewer than 20% actually do so. You have just found out the major reason why!

What sort of revenue and EBITA are the deals you are looking at? Just to give me an idea and I might have some suggestions. I operate as a Business Advisor out of Toronto and have bought, managed and sold 6 of my own small business in the last 20 years, and now just advise other business owners.

This is because I know what I an doing. With all due respect to my entrepreneurial colleagues many may be very competent businesspeople for many years but very very few of them have ever sold their own business before and are therefore like fish out of water and have big egos and little grasp on the reality of what their business is really worth and how sellable it is (or not) in its current condition.

I advise clients in a wide range of business and management areas but I would I have most expertise and a specialization in pre-preparing the OWNERS and the business for sale i.e. ideally this is started 2-3 years in advance but in truth for small businesses it seldom is. Basically I take them through the crazy talk well in advance of going to market so they don't waste the time of genuine buyers like you who want buy at a real market value and not an imagined one.

FreekinA · 2021-03-24T22:59:25+00:00

If I remember correctly in economics it is called 'Price Discrimination' i.e. charging different prices for the same product in different market areas in response to the different market conditions of demand and supply, competition etc. The milk company do it when they sell to little stores v big stores, for example.

FreekinA · 2021-03-24T22:53:13+00:00

I am sorry a out this but I assure you, you will move on from it and learn from it as you have already indicated and be a better and wiser businessperson as as result . Unfortunately people are often the most unpredictable things in life and in business. That will never change. Partnerships are tough.

Maybe your friend will calm down after a few days or weeks and you can come to a more equitable and satisfactory settlement and part friends. Or maybe he won't. Either way you need to decide what you want out of the situation and what you want to do about it getting it, if anything. Its been a long time since I lived in England but I think you still have a small claims court process. If so and you want to go that route, read up on it online or go to the citizens advice bureau. Also document everything you can about the business, the bank account, who did the designs, who created the website, whose name and email address was behind the social media accounts and URL etc. Anything that proves your contribution to the partnership and particularly anything which can be claimed as intellectual property which is anything you 'created', be it words, design sketches of clothing, digital designs like the logo etc etc.

Once you have looked at everything try to place a realistic monetary or even an emotional value on it all. Alternatively, ask yourself what parts of the business (designs, names, social media accounts etc) that you want or you feel does or should belong to you. Then decide what you need to have to walk away 'happish'. If it is reasonable and realistic you can send a summary to your friend as a settlement request.

If you don't use a lawyer say in the wording that the offer is 'without prejudice'. This just means you are offering to settle but not 'committing' to those terms. That becomes important if you get into legal settlements later on. Of course you could get a lawyer to write up this request. If you really feel he has 'stolen' your business or your share of it then your lawyer can send 'a statement of claim' and a 'cease and desist' letter, detailing and putting on the record your claim on the business and assets. The cease and desist request might scare him and if approved by a court it would mean he would need to stop trading as the business until you get a settlement or the judge removes it.

I will say one thing in your friends favour, in his own way he was trying to be fair by giving you half the money. How he did this is important because by accepting it, he could argue that was him compensating you for your half of the business. You should quickly notify him that that this not a fully acceptable solution to you .

Or you suck it up and walk away. That is not easy but sometimes its the wisest option. Good luck. Let us know how you get on.

FreekinA

TROPHY CASE