Simply Junior

Nearly 1.5 Million people have taken advantage of the $8,000 tax rebate since it’s conception in January 2009. The tax credit has been available to all first time home buyers. The first time home buyer is defined as anyone who has now owned their own home for three consecutive years. Oh, one more criteria for eligibility… It must be for your primary residence which is unfortunate for investors. The credit is in the form of a tax rebate for 10% of the purchase price of the home, up to a total of $8,000. One of the great benefits of the tax rebate is that is FULLY refundable to the buyer. For instance if the first time home buyer owed no taxes on their taxes, then the first time home buyer can amend their tax return and capture the full $8,000.

The tax rebate has helped improve the national home sales. The current tax rebate is set to expire on November 30, 2009. This means that the purchase must be fully closed and completed in order to qualify. It typically takes approximately 30 days to close on a home transaction with conventional bank financing. The point is that in order to be confident your purchase will qualify you should plan to be under contract to purchase your home by November 1, 2009. If you are trying to capture the $8,000 tax rebate and have not yet put your home under contract or you dont qualify for conventional financing then you need to consider finding an alternate approach. One alternate approach is to find seller financing. If the seller is providing the financing and you do not need to wait the typical 30 days for bank financing, then you can still close by December 1, 2009 without many challenges.

What about the possibility of extending the rebate past December 1, 2009? There are currently several bills in Congress that would allow the extension. Each of the bills in Congress provide alternate solutions toward the extension. Of course there is a lot of politics involved in completing the extension, from all poitical parties. Here is a brief summary of the extensions:

S1230: Senator Johnny Isakson introduced Senate Bill 1230 in June. The Bill proposes a tax credit up to $15,000 that can be split over 2 year for everyone who purchases a home for their personal residence.

HR 2619: This one proposes to extend the existing $8,000 tax credit to July 1, 2010 and adds provisions for a tax credit of up to $3,000 for homeowners who refinance. This would certainly create a ton of refinances. Is this part of the recent mortgage issue? Many Americans seem to use their home equity as an ATM machine, pulling it out and spending it. I guess that would potentially help spur the ecomony in the short term.

HR 2801 – Similar to S1230 but it extends benefits to January 1, 2011.

Several key politicians are publicly making comments about getting the extension approved by early November. Those making positive comments include Senator Bill Nelson of Florida, Senate Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus. They are hoping to extend the rebate along with unemployment benefits at the same time.

One thing for sure is our current Government is committed to spending an unlimited amount to try and stimulate our economy. Our Leaders appear to be committed to short term gains at the expense of future generations. That said, extending the first time home buyer credit will certainly help encourage American’s to own their own home.

Having a business plan has made and broken more than one successful, business idea. When a potential, small business owner is asked to write a business plan, most of them run the other way. Writing a small business – the business plan can be a complicated process. A business plan is the document you will use to sell your business idea to potential backers, venture capital firms, family friends, or just about anyone who may back your business venture.

Getting funding can be costly and extremely time consuming. It will most likely be the hardest part of starting your business. Therefore, your business plan must convey your excitement with the promise to succeed at your business venture. You maybe excited about your business idea, but that does not mean others will be as excited as you. Not only will you need to convey you excitement but you will need to make sure you illustrate the profit potential correctly. If no one can see the potential, then the odds of getting funding will be slim to none. When writing the small business – the business plan you will need to make sure your plan stands out amount the rest.

If your plan looks, and reads like a junior executive wrote it than your business plan may get overlooked. Getting your small business plan to break through the minutia. Start off with the benefits – you will want to start off with detailing what you do and how what you do will provide your investors with a sizable profit. Make your projects believable – do not just show figures, explain what will drive growth, how you plan to capture sales and how the two activities coincide. Show detailed knowledge of your market – you will need to demonstrate that you have extensive knowledge of your marketplace.

You will need to show how you plan to progress into the mass market. Introduce you and your team – this seems like a minor detail. However, you need to demonstrate that you and your team have the experience and accomplishments to achieve the profitability goals. Provide financial forecasts – make sure to keep your forecast realistic. You will want to include a breakdown on how you plan to reach your projections. Demonstrate product or services – the power of observation can go a long way in illustrating your products benefits.

Developing a plan does not have to be the kiss of death. If you structure it correctly, it could be your ticket to success.

A business plan is a written summary of your business idea including the product, people, equipment, financing, competition, sales and marketing, cash flow and operations that are required. You will want to prepare a business plan not only for your new venture but also for new products or business models. If you need financing for your venture you will need a Business Plan to present the plan to venture capitalist, investors or your bank. Even if you are self financing the venture you should prepare a business plan as if you were going to present it to your bank. There is no one easier to lie to than yourself and no one easier to fool.

There is no magic formula for a Business Plan although I always found when presenting a plan to a bank the heavier and longer it was the easier it was to get the banks approval. You plan should at a minimum include the following.

A detailed description of the product or line of products or services including target consumer and features and benefits of the product. A statement of qualifications and experience of the person or persons who will lead and manage the venture. A detailed plan of where and how the product will be manufactured or purchased. If it requires manufacturing where will you get the equipment, factory space, raw materials and skilled labor? If you are purchasing the product what are your supply lines? Do you have a purchasing agreement in place? How reliable is the source? Can you get alternate sources if necessary? A marketing plan that details you unique selling propositions, market area, method of reaching your customer such as advertising or online marketing. How will you attract the right sales people? If you are planning on using a marketing firm provide details. If you are out sourcing sales such as to a real estate agent if you are building homes include information on the individual or firm you intend to use. If they provide a marketing plan include that in your business plan. A cash flow plan detailing required cash resources and how long the cash will be required before the venture becomes cash positive. A statement of required resources not listed above such as licenses, permits, insurance, testing and research, office space and associated equipment and furniture. An organizational chart showing a plan for operating the business at inception and as it grows. A list of your key advisors; accountant, attorney, insurance professional Include a break even and profit analysis. How many units or dollars do you need to sell to break even and how many do you need to sell to provide a return to your investors? A bank will want to make sure they are going to get repaid. Investors will expect a return which well exceeds return they could get from safer investments such as saving accounts, money markets or bonds.

Even if you do not need to reach out to investors and a bank and are going to be self financed prepare a business plan and present it to a bank or group of investors who do not have fallen in love with the idea like you have. If you cannot convince them to provide funding then you likely need to reexamine the plan.

Friends and relatives are not a good audience as they will either be too easily swayed by your enthusiasm or afraid to tell you what they really think. I once had a relative who I looked up to all my life. He was buying a franchise when he retired and he showed me the business plan. When I looked at the return on investment and the work required to produce that income I thought “this plan will never work.” Because I had looked up to him so long I kept my opinion to myself. He spent almost ten years working too many hours trying to keep from losing his retirement savings. In the end only the long hours and a lot of resourcefulness helped him recoup his original investment.

Original Content copyright 2010 Thomas Robinson

One of my favorite types of projects is working on small business plans with clients. There is an air of excitement as they work out their ideas and put their dreams on paper. I always think that I might be witnessing a birth of another future corporate giant. Some of those ideas are compelling, others seem unattainable, and yet the confidence and certainty my clients exhibit leave me with no doubt that they will succeed.

The Challenge of Writing a Business Plan
As excited as these entrepreneurs are about their ideas, for many of them the actual task of writing things down in a business plan format is very hard. They would rather get started already, develop their product or service, find a location – do all the things a typical small business owner does. They have such inner clarity about every single detail and yet communicating all of it in writing – in a business plan format – seems completely against their nature. It feels too structured, almost unnecessary.

Obtaining Financing
And yet, especially it today’s world, it is necessary. Most of the time the purpose for a small business plan is to obtain financing. No matter which group you are thinking of approaching – venture capitalists, commercial lenders, potential investors – they will all want to see a formal, written business plan.

Even though many people use business plans primarily, and sometimes only, as financing tools, they tend to write them in a way that puts the venture in too optimistic a light. Even if it gets you the cash you wanted, it will not help you succeed, because if the business has not been well thought out, or if the risks are too great, it will fail.

A realistic and objective business plan that also conveys your excitement about your business idea and your confidence in reaching your goals will have a much better chance of not only getting you the financing you need, but also fulfilling the other purpose it was meant to serve:

Planning a Business
Yes, that’s it! A business plan is a “planning tool”. That is its primary function and purpose. And it does this so well that shrewd business people like investors and bankers use it to determine who will get financed by them and who will not.

And you too will benefit from using it the most when you see it as such and not only as a sales tool.

It is a structured approach to refining your ideas about your business and devising a plan of action taking into account all aspects of the future enterprise: marketing, personnel, operations and finance. It helps you translate your ideas into actionable goals and it helps to predict your financial resource needs and financial results.

As you fine tune it, you will find out that it allows you to make many mistakes “on paper” and saves you from their consequences in the real world.

Monitoring a Business
The hardest business plan to draft is your very first one. Why? Because all you have are estimates and assumptions. But after a few months of operations, you will have some real numbers and you can update your plan at that point. Planning process has to be dynamic and on-going. A plan is not something you do once and put on a shelf. If it is to you, you have not realized the tremendous value it has for your business.

It should be an integral part of your management. Use it to compare your actual results to what you were anticipating. Analyze the deviations and understand them. Perhaps what you did was better than what you planned, perhaps not. Either way, you can learn from this comparison and refine your planning and your operations even further.

Any time you plan to introduce a new product, enter a new market, change the management structure, you should first prepare a business plan for the scenario you are envisioning. And don’t think this means too much time involvement for you. After all, you are just a small business owner. You cannot behave like a large corporation with a separate planing department, right? Wrong…

Large companies have large planning departments because they have learned the value and necessity of planning, but you need it just as much, if not more, because as a small business owner you do not have the reserves that can carry you through a sales slump or a bad business mistake.

This is what I always tell my clients – small businesses need all the sophistication of large companies. They actually need it even more, they just need it scaled down and adjusted to their size.

A real estate appraisal also known as a property valuation surveyor or land valuer is the practice for evaluating the worth of the real property on ground, usually its market value, value-in-use, insurable value, investment value and liquidation value. These are to be done to know the right value of a property before decisions are made.

A real estate appraisal is highly important to investors. An appraisal is a third party that will come in and decide upon the worth of a property. He will oversee the interior and exterior of the property and other properties in the area and then will proceed to determine how much the property will worth. An appraisal is done for both the buyers and sellers because, while the buyer does not want to overpay for a property, the seller does not want to sell his property for less than its worth. It is highly advisable to buy or sell a property after it has been valued by an appraisal.

Property valuation is performed by an approved or qualified appraiser (also known as estate valuer or land valuer in most countries and in British English as a “valuation surveyor”).

The real estate appraisal is done using various methods such as: cost method, income method, and sales comparison method.

Cost method involves the estimated cost of improvements in the property, value of the land and deterioration factors.

Income method is used to value commercial and investment properties. This approach is generally considered the most applicable valuation technique for income-producing properties.

Sales comparison method compares the sale prices of similar properties that have been sold recently.

Doing a proper appraisal with various methods explained above will help you to know the right value of a property in order not to overpay for a property or sell property for less than it’s worth.