Bailout funds arrive in NH

By DENIS PAISTE
New Hampshire Union Leader Staff
Tuesday, Dec. 23, 2008

MANCHESTER – Federal bailout money has started to arrive for troubled financial institutions in the Granite State.

Monadnock Bancorp. Inc. of Peterborough will use $1,834,000 in federal Troubled Asset Relief Program funds to increase business and home loans, its president said yesterday.

The parent of Monadnock Community Bank received the funds Friday, William M. Pierce, president and chief executive officer said, yesterday.

The money, part of the government's massive $700 billion financial system bailout, was made available through Treasury's Capital Purchase Program, which is part of a part of the TARP.

Monadnock Bancorp. appears to be the only New Hampshire bank so far to receive TARP money. Once the funds are approved, the Treasury waits two business days to report the deals.

Monadnock's federal assistance is part of the initial distribution of the first $250 billion in bailout money. The government closed on another $1.9 billion in bailout money with 43 banks yesterday, but details will not be reported until Friday or Monday.

"We had to apply and we had to be approved because, really, only the strong banks would qualify for this program," Pierce said.

The U.S. Treasury Department announced the funding yesterday, which was part of a $2.8 billion investment in 49 banks made on Friday, Dec. 19. Treasury receives preferred stock and warrants from participating institutions.

The Treasury Department purchased 1,834 shares of newly issued, non-voting Monadnock Bancorp, Inc. cumulative senior preferred stock, Series A, valued at $1.834 million, with an initial annual dividend rate of 5 percent. The Treasury also received warrants, which were immediately exercisable, for 92 shares of non-voting Monadnock Bancorp, Inc. cumulative senior preferred stock, Series B, with an annual dividend rate of 9 percent. The Treasury immediately exercised the warrant, Monadnock Bancorp said in an SEC filing.

"By adding to our capital, it really allows us to grow, stay independent and be a community-oriented financial institution," Pierce said. "We also are an SBA lender, so we do business loans as well as home loans."

Pierce said he believes economic conditions in New Hampshire are more favorable than the rest of the country.

Monadnock Bancorp. has assets of $110 million, with one branch in Peterborough, and one in Winchendon, Mass.

It has 28 employees.

Monadnock Community Bank evolved from AWANE (Automotive Wholesalers Association of New England, Inc.) Credit Union, which was chartered in 1971.

Monadnock Bancorp, Inc. (MNKB) is traded over the counter. Shares were unchanged yesterday at $3.45.

10 SECRETS TO SUCCESS

With New Year's approaching and the mandatory resolutions being trotted out, I thought I'd send this along... always a good thing to regain focus on what's important... AND it can apply to all of those pesky resolutions!


10 SECRETS TO SUCCESS


1. HOW YOU THINK IS EVERYTHING : Always be positive. Think success, not failure. Be aware of a negative environment.

2. DECIDE UPON YOUR TRUE DREAMS AND GOALS : Write down your specific goals and develop a plan to reach them.

3. TAKE ACTION : Goals are nothing without action. Don’t be afraid to get started. Just do it.

4. NEVER STOP LEARNING : Go back to school. Read books. Get training and acquire skills.

5. BE PERSISTENT AND WORK HARD : Success is a marathon, not a sprint. Never give up.

6. LEARN TO ANALYZE DETAILS : Get all the facts, all the input. Learn from your mistakes.

7. FOCUS YOUR TIME AND MONEY : Don’t let other people or things distract you.

8. DON’T BE AFRAID TO INNOVATE; BE DIFFERENT : Following the herd is a sure way to mediocrity.

9. DEAL AND COMMUNICATE WITH PEOPLE EFFECTIVELY : No person is an island. Learn to understand and motivate others.

10. BE HONEST AND DEPENDABLE; TAKE RESPONSIBILITY : Otherwise, numbers 1 to 9 won’t matter.

Festival Marketplace Portfolio on the Market

Interesting news... includes Faneuil Hall in Boston, which is of course near and dear to our hearts and market... keep in mind the proposed redevelopment of Salisbury Beach, MA... and they're selling... how might this bode for Salisbury Beach? Keep your eyes and mind open, and read the tea leaves... BF



General Growth puts Festival Marketplace Portfolio on the Market


Description:
Portfolio includes Harbor Place & The Gallery in Baltimore, South Street Seaport in New York City and Faneuil Hall in Boston

Real Estate Investment Trust General Growth Properties, the country’s second largest mall owner, has put its Festival Marketplace portfolio on the market, according to an investment offering obtained by citybiz real estate. The investment offering is being distributed by DTZ Rockwood, a full service real estate investment banking firm headquartered in New York.

General Growth’s Festival Marketplace portfolio includes Harbor Place & The Gallery Mall in Baltimore, a 544,453 square foot, multi-use building with nearly 260,000 square feet office and 285,000 square feet of retail; South Street Seaport, a 285,847 square foot retail center in New York City; and Faneuil Hall in Boston, which like Harbor Place, is a mixed use facility with 350,980 total square feet, 155,333 of which is office.

Harbor Place & The Gallery has an office occupancy of 77.3 percent and its retail occupancy is 85.6 percent. It generates $522 per square foot in sales. The property generated nearly $114 million in retail sales for the 12 month period ending September 30, 2008.

South Street Seaport in New York City is a 285,847 square foot retail center that is 94.3 percent occupied with retail tenants. The investment offering says the site is one of the top five tourist attractions in New York City. Located on the East River directly south of the Brooklyn Bridge in Downtown Manhattan, South Street Seaport generated more than $102 million in retail sales for the 12-month period ending September 30, 2008.

Faneuil Hall’s office and retail occupancies are just short of 90 percent. Located in the heart of downtown Boston, Faneuil Hall Marketplace is a historic landmark and mixed-use project comprised of retail, office, dining and entertainment components. Home to the world-famous Quincy Market Colonnade, one of the largest and most heavily trafficked foothalls in the world, the property intersperses local boutique and well-known national retailers and over 50 dining venues. Faneuil Hall Marketplace generated more than $102 million in retail sales for the 12-month period ending September 30, 2008.

In total, the investment offering is for 1.181 million square feet

DTZ Rockwell’s team of David Monahan, Thomas Dobrowski and John Coury will manage the investment sale for General Growth.

citybiz real estate is a daily online news service serving the local commercial real estate community. In association with citybizlist.com, a localized business website currently available in five cities, citybiz real estate targets the brokers, owners, investors, developers, architects, engineers, accountants, construction industry professionals and all others responsible for changing the local business landscape through real estate.

What does it mean? Most folks automatically equate a fed drop with mortgage rates, which isn't a safe assumption. This cut will affect the broader credit markets- see Mark's last paragraph from the bottom for a wrap-up of what this can mean to you directly... it's good news,but it's not an overnight game changer...

What does this mean to the commercial real estate market? It can mean plenty... Banks will free up more money to banks... this will mean liquidity to commercial loans... BF

FOMC Cuts Rates to Lowest Level on Record

Mark Lieberman, Senior Economist

FOXBusiness

The Federal Open Market Committee today agreed unanimously to cut the Fed Funds rate to a target range of 0% to 0.25%, the lowest rate in the Federal Reserve’s 95-year history.

In the statement announcing its decision, the FOMC said since its last meeting “labor markets have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined.”

The Committee added: “overall, the outlook for economic activity has weakened further.”

The unusual step of establishing a range for the Fed Funds rate took most analysts by surprise. The consensus forecast had been for a ½ percentage point cut to 0.50%.

In the 1989, the FOMC established a range of 9.50% to 9.625% for the Fed Funds rate.

In its statement, the Committee said the Federal Reserve “will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.”

Those tools, the Committee said, would mean the Federal Reserve “will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.”

The effect of these actions, would the Committee believes, bring down interest rates and unclog stalled credit markets.

The FOMC’s action means consumers will see lower rates for home equity lines of credit, credit cards and auto loans since those loans are generally linked to the prime interest rate which is set at three percentage points above the Fed Funds rate. Mortgage rates are not directly affected as those rates are tied to rates for treasury borrowings which don’t react as quickly. But the real target of the FOMC’s action was the broader financial services sector, providing more money for banks.

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.

$8.5 Million in Expansion Capital for Timeshare Resale Company

Interesting development in the marketplace that certainly will have implications in the commercial and residential real estate markets...the extent of which will unfold with time... if the likes of the Edison fuind is willing to invest, (risk), this kind of capital in a business geared at selling what is traditionally looked at as horrible investments, can the support of solid backing for solid commercial projects be far behind? BF...


$8.5 Million in Expansion Capital for Timeshare Resale Company Sell My Timeshare NOW

Sell My Timeshare NOW plans expansion with funding from Edison Venture Fund.

DOVER, NH--(Marketwire - December 16, 2008) - With an $8.5 million injection of capital, Sell My Timeshare NOW launches a new growth and expansion plan designed to better serve the timeshare resale needs of both consumers and the timeshare development industry. After extensive diligence, Edison Venture Fund has become Sell My Timeshare NOW's sole institutional investor, continuing Edison's investment commitment to high-growth, entrepreneurial, technology companies.

Sell My Timeshare NOW and its family of websites provide advertising tools and marketing services to assist owners with timeshare resale and rental options. In addition to its by-owner advertising platform, the company also offers success-based services through its brokerage arm, Timeshare Broker Services. The company has experienced dramatic growth so far in 2008 with more than 23 million visitors and over $1 million in daily offers to buy or rent timeshare, landing it as one of the fastest growing privately held companies according to Inc.com. Despite the economic downturn, Sell My Timeshare NOW has experienced a 90 percent increase in the number of offers to rent or buy timeshare advertised through its website and a 74 percent increase in the dollar amount of those offers over 2007.

Jason Tremblay and co-founders Mark Eldridge and Cindy Gonzalez started Sell My Timeshare NOW in 2003 as a home-based business with three employees. Through cutting-edge internet search technologies and excellent customer service, the company has grown to over 150 employees with offices in Dover, NH, and Orlando and Tampa, FL.

Jason Tremblay, company's CEO and founder, explains, "Sell My Timeshare NOW is well on its way to become the de-facto destination for the vacation ownership secondary market. With Edison as our investment partner, we can expand our innovative, business-to-business solutions in ways that will provide proactive, developer-friendly solutions."

Michael Kopelman, Principal at Edison Venture Fund, noted, "The company's search engine leadership drives massive exposure to sellers. Buyers now have the ability to purchase timeshare intervals online at attractive discounts to retail prices."

Tremblay elaborates, "Sell My Timeshare NOW is already the global leader in online timeshare advertising and the number one resale solution for consumers today. Edison's due diligence recognized the utility of our platforms. Edison's investment enables Sell My Timeshare NOW to further expand, offering resale and rental solutions for both timeshare developers and owners.

"We understand that the secondary market has been highly inefficient in the past. Our goal is to provide real solutions that create tangible results for timeshare owners and developers," said Tremblay.

About Sell My Timeshare NOW

The company is the recognized global leader in online timeshare resale and rental marketing with over $400 million in offers through its websites in 2008. The company's flagship website property, SellMyTimeshareNOW.com, provides internet advertising and marketing solutions for timeshare owners who seek to sell timeshare or rent timeshare. In addition, the company also offers success-based services through its brokerage arm, Timeshare Broker Services. Headquartered in Dover, NH with offices in Orlando, FL and Tampa, FL, the company has over 150 employees and was recently recognized as one of the fastest-growing privately held companies in the country by Inc.com.

About Edison Venture Fund

Established in 1986, Edison partners with entrepreneurs, service providers and other financing sources to build successful companies. Edison provides capital and value-added services to expansion stage ($5 to 20 million revenue), information technology businesses. Initial investments range from $5 to 8 million. Edison typically serves as a sole or lead investor in financings up to $10 million. In addition to providing expansion capital, Edison funds management buyouts, recapitalizations, spinouts and secondary stock purchases.

Edison's investment professionals are based in Lawrenceville, NJ, McLean, VA, New York, NY, Needham, MA, and West Chester, PA. Industry specialties include application software, communications, financial technology, interactive marketing, healthcare, & pharmaceutical IT. Edison's successes include Best Software, Dendrite, E-Transport, Gain Capital, Liberty Tax, VirtualEdge, Visual Networks, Vocus and many other information technology leaders, which have a combined market value exceeding $5 billion. Edison currently has $550 million under management and is actively making new investments. www.edisonventure.com

Hinsdale Race Track Declares Bankruptcy

Interesting article from the New Hampshire Business Review... speaks more to the area near Hinsdale rather than the market in general... although that applies too...

http://www.nhbr.com/apps/pbcs.dll/article?AID=/20081216/NEWS06/812159969/-1/XML08

The anti gambling statement at the end of the article by Jim Rubens is naive and uninformed, in my opinion... the demo's in Salem/ Rockingham County couldn't be more different than in Hinsdale... as well as the opportunity... BF



Business News/Analysis

Hinsdale race track declares bankruptcy

Tuesday, December 16, 2008

Hinsdale Greyhound Park announced that it was shutting it doors and filed for bankruptcy Monday, leaving 49 people out of work, and more than 200 unsecured creditors owed about $1.75 million holding the bag.

“Business was not good. But when gas prices spiked earlier this year, things went from bad to worse. People simply have less money to wage,” said Joseph E. Sullivan in a prepared release. “People simply have less money to wager in New Hampshire and nationally.”

Sullivan added that “efforts to attract investors or a buyer were, in the end, unsuccessful,” he said.

Sullivan referred all calls to his attorney, John M. Sullivan (no relation), who could not be reached for further comment by deadline.

Hinsdale, one of the four live racing venues in the state, started in 1948 as a harness track, and added dog racing in 1973, but live racing at all the tracks took a back seat to the simulcasting of other races around the country. This year, for instance, a little more than $700,000 was bet on dog races at Hinsdale as of Dec. 7 out of a total of $29.5 million.

But that take was a 32 percent drop from the previous year, when the track took in $43 million. That left the track with $5.8 million last year after paying off the winners and the state (but before operating expenses and debt payments), the smallest revenue stream of any of the four live-racing tracks in the state.

The bankruptcy filing indicated the company owed large sums of money to various racing suppliers, other racetracks and individual investors, as well as taxes: $189,000 to the Internal Revenue Service and $139,000 to the town of Hinsdale, and $4,500 to the New Hampshire Racing and Charitable Gaming Commission.

The largest unsecured creditor is the Tote Company ($185,000), which designs, manufactures and operates pari-mutuel wagering systems.

Other large creditors include Herschel Bird ($138,000) of Henderson, Nevada, Kevin Matties ($71,000) of Las Vegas and Paul Matties ($52,000) of Pittsfield, Mass., Public Service of New Hampshire ($95,000), and the Hawthorne Race Course ($65,000).

The release does give a hint that the track was anticipating a possible shut down. At the end of October, it transferred control and care of all greyhounds to several independent non-profits.

Hinsdale and the other racetracks have long argued for the state to adopt casino gambling, and indeed – because of the economy and the state’s fiscal trouble – this seemed like as good as time as any to propose it. Track owners will point to the closing as evidence that they need the investment and revenue that slot machines can bring to the tracks.

But Jim Rubens, leader of Granite State Coalition Against Expanded Gambling, drew a different lesson.

“Gambling is a saturated industry that’s in decline,” he said. “It should lead to suspicion that claims that tracks like Rockingham Park could open a $450 million casino gambling in Salem. If Hinsdale couldn’t raise enough capital to stay open, why would Rockingham be able to raise that much money?” – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW

Dunkin' Brands Appoints CEO

Dunkin' Brands Appoints Nigel Travis as Chief Executive Officer

Jon Luther Remains Executive Chairman of the Board

CANTON, Mass., Dec. 10 /PRNewswire/ -- Dunkin' Brands, the parent company of Dunkin' Donuts and Baskin-Robbins, today announced that Nigel Travis has been appointed Chief Executive Officer. Most recently, Travis, 58, was the President & CEO of Papa John's (NASDAQ:PZZA) , a pizza chain with annual system-wide sales of $2.1 billion and more than 3,300 restaurants throughout the U.S. and 29 international markets.

Effective January 6, 2009, he will assume the role from Jon Luther, who will remain Executive Chairman of the Board. Luther, 65, joined Dunkin' Brands in January 2003 as Chief Executive Officer and added the role of Chairman in 2006.

Luther had been working closely with Dunkin' Brands' Board of Directors since early 2008 to develop a succession plan and identify a new Chief Executive Officer.

Travis joined Papa John's in 2005 as President & Chief Executive Officer. Under his leadership, Papa John's accomplished outstanding results, with industry-leading comp sales, consistent earnings growth and excellent franchise relationships. During his four-year tenure with the company, Papa John's online sales tripled through the innovative use of technology. In addition, Travis helped position the company's international business as a major growth platform and oversaw the successful rollout of several new products, including Papa's Pan Pizza.

Prior to Papa John's, Travis was with Blockbuster, Inc. from 1994 to 2004, where he served in increasing roles of responsibility, including President & Chief Operating Officer. During that time, global sales increased over 50% and the international business was developed to encompass 26 countries with revenues of $1.8 billion. Travis also built a worldwide franchise network of 300 franchisees in 15 countries with revenues of approximately $1 billion, and transitioned the company from a video rental store chain to a complete movie and game source.

Before that, he was with Burger King, first as Senior Vice President of Human Resources and later as Managing Director for Europe, the Middle East and Africa. As Managing Director, he turned around the region, significantly increasing sales and operating profits. He dramatically increased the rate of store development in the region, and successfully drove expansion into new countries and alternative points of distribution.

Mr. Luther commented, "In Nigel , Dunkin' Brands has found a leader with a proven track record of delivering extraordinary results. His wide-ranging achievements in retail and the foodservice industry will strengthen our overall senior leadership team, further enhancing our ability to execute our long-range strategic plans. Nigel's ability to develop strong franchisee networks, his understanding of the intensely competitive global marketplace, and his innovative, results-oriented style will build on the powerful momentum already in place at our Dunkin' Donuts and Baskin-Robbins brands."

Luther will remain with Dunkin' Brands in a full-time capacity as Executive Chairman of the Board, and will work closely with Travis to ensure a smooth transition for the company.

Said Mr. Travis, "I am delighted to have the opportunity to join Dunkin' Brands and build on the remarkable transformation that has taken place under Jon's leadership. I am looking forward to working with Jon, the executive team, and all of the employees and franchisees who have helped to reinvigorate two of the world's most powerf ul, recognized and beloved brands."

Travis will relocate to Massachusetts with his family.

About Dunkin' Brands, Inc:

With more than 14,000 franchises in 44 countries worldwide, Dunkin' Brands, Inc. is renowned for its leadership in the quick quality category. At the end of 2007, there were 7,988 Dunkin' Donuts franchised restaurants and 5,874 Baskin-Robbins franchised restaurants and the company had system-wide sales of approximately $6.6 billion. Dunkin' Brands, Inc. is headquartered in Canton, Massachusetts. For more information, visit www.dunkinbrands.com.

Hampton plan wins praise, but how to pay?

Interesting article in the Union Leader this morning. Sure to be detractors and supporters- there are certainly plenty of investment and business opportunities down on the main beach right now… and this might bring more opportunity forward even before state support is committed… IF it’s committed. BF


Hampton plan wins praise, but how to pay?
By CLYNTON NAMUO
New Hampshire Union Leader Correspondent

HAMPTON – Local business owners last night asked the state to fully fund an $18 million redevelopment of Hampton Beach this legislative session, putting them at odds with state parks officials, who are asking to pay for the project over several years in light of the bad economy.

Both sides agree Hampton Beach needs a makeover and the plans have already been assembled; a new seashell stage with seating for 750 and two pavilions with bathroom facilities, new bathhouses on the north and south ends of the beach and a new visitor's center.

The project's entire $18 million cost is expected to come from the state, but that amount is a hefty sum when budgets are being slashed.

"I think it's important people recognize that this is going to be an uphill battle," said John Nyhan, head of the Hampton Beach Area Commission, which is pushing for the redevelopment.

Nyhan said the state's capital improvement budget is expected to be $95 million this year, making the Hampton Beach redevelopment nearly 20 percent of that, should it be approved.

The Department of Resources and Economic Development has pegged the Hampton Beach redevelopment as its number-one priority, but even that isn't enough for the department to ask for the full sum this legislative session.

Officials said they plan to ask for enough money to build the two bathhouses this session and then ask for the remaining money at the next capital budget in two years. The department previously planned to ask for the full sum, but recently changed its tune.

"This is our number-one project," Division of Parks and Recreation spokesman Amy Bassett said. "We just have decided to phase it over a couple years of capital budgeting because the economy is just not there for it."

To push the project to state legislators, local officials are framing the redevelopment as a benefit to the entire state in added tourists and visitor spending.

Laurence Goss, a state economist, said fiscal 2008 direct spending at Hampton Beach totaled $170 million. He said that number would increase by 30 percent within five years of completing the redevelopment.

"While a lot of it is being spent in Hampton, a lot of it is also being spent in other communities," he said. "The money is spent regionally."

Goss estimated a redevelopment would also increase the number of tourist visits at Hampton Beach by 15 percent.

Support for full funding was strong at last night's meeting of the Hampton Beach Area Commission at Ashworth by the Sea, but the real support is needed in Concord, a fact not lost on anyone last night.

"We're not going to give up until that last vote is taken," Nyhan said as he implored everyone on hand to reach out to legislators.

Surviving Your Business Debt Seminar Offered

From the NHBR

Another great opportunity... The Women's Business Center sponsoring a topical and valuable speaker... BF

WBC readies ‘Surviving Business Debt’ seminar

Wednesday, December 10, 2008

The Women’s Business Center is sponsoring a breakfast roundtable on Wednesday, Dec. 17, featuring Kenneth P. Easton Jr., author of “Surviving Your Business Debt.”

Easton is expected to touch on such topics as launching immediate and effective business financial survival strategies, controlling current borrowing, coping under lender pressures, and how to leverage recovery, future business growth and opportunities through intelligent business borrowings.

Julie Vogt, WBC’s interim executive director, said she has received many phone calls from the organization’s worried members about how to deal with debt in the struggling economy.

“Now is not the time to put your head in the sand,” said Vogt. “You need to deal with debt like the businessperson you are. If you have business debt, large or small, you will benefit from Ken’s insights.”

The seminar will take place from 7 to 9 a.m., Wednesday, Dec. 17 at the Portsmouth Country Club, 80 Country Club Lane, Greenland. The event is presented free of charge to WBC member, $25 for non-members.

Advance registration is required.

For more information, call Nancy Blake at 603-430-2892, ext. 4. — CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW

Business News/ Analysis

from the NHBR - New Hampshire Business Review

Very good news for startups and home business owners, and the availability of the Incubator on a part time basis is no doubt a sign of the times... BF

Business incubator offers part-time deals

Tuesday, December 9, 2008

The Amoskeag Business Incubator has created an affiliate member program for small-business owners who need professional services on a part-time basis.

“The affiliate member program is geared toward owners of home-based businesses that are not quite ready for a full office, but do need some professional space,” said Michele Peterson of the incubator, which provides affordable office space and technical assistance to early-stage companies. “They can use the space to meet with clients, to use professional services, or just get out of the house to get work done if they’re outgrowing their home office.”

Affiliate membership comes at two cost levels -- $70 per month and $100 per month.

Under the $100 monthly program, members can use the incubator as a mailing address and 30 hours per month of office space as well as use of the conference room for three hours twice a month. Under the $70 monthly package, members receive 10 hours of office space use per month.

Additional hours of office space use can be rented for $5 an hour.

Some of the other services offered include the use of computer and/or laptop, wired/wireless Internet, LCD projector for use in the incubator’s conference room, notary services and kitchen facilities.

If affiliate members decide to upgrade their membership to full status, they can receive additional services, such as taking priority when permanent office space becomes available as well as the use of technical assistance, business coaching and support from the incubator’s business experts committee.

The Amoskeag Business Incubator currently has 20 full-time businesses at its location in the Manchester Millyard. For more information about the affiliate program, call ABI at 603-629-9511 or visit abi-nh.com. — CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW

Reworked Mortgages Not Working

from the Boston Globe this morning... nd it's not exactly encouraging news... BF

http://www.boston.com/realestate/news/articles/2008/12/09/reworked_mortgages_not_working?mode=PF

Reworked mortgages not working
Even after help, homeowners end up back in default
By Jenifer B. McKim, Globe Staff | December 9, 2008

More than half of delinquent borrowers who had their mortgages reworked earlier this year to avoid foreclosure were behind on their new loan payments after just six months, a federal regulator said yesterday.

John C. Dugan, US comptroller of the currency, told a housing forum yesterday that data his agency is collecting show the increase in repeat defaults by homeowners is "remarkably high."

"Put simply, it shows that over half of the loan modifications seemed not to be working after six months," Dugan said.

The findings raise several major questions for government and lending industry executives as they struggle for a fix to the nation's foreclosure crisis: Are lenders not doing enough to modify loans so delinquent borrowers can afford them? Or, are too many borrowers just not cut out to be homeowners and shouldn't be bailed out of their debts?

Dugan said his agency is asking lenders and their representatives why these redefault rates are so high. But many housing advocates and industry specialists said they already know: Lenders are failing to give troubled homeowners affordable long-term fixes. In fact, lenders were more likely to offer a modified loan that resulted in a higher, not lower, monthly payment, according to a recent report by analysts at the financial services company Credit Suisse.

Ask LaWanda Fils. This single mother was behind on payments on her Dorchester two-family home when she asked for help from her lender, Option One Mortgage Corp. The solution Option One offered didn't seem to make sense - she would pay $800 a month more, after rolling in past-due principal, taxes, and insurance. Desperate to save her home, Fils agreed to the deal anyway in February.

Two months later, she defaulted and now is again facing foreclosure.

"I think it is more for them to pat themselves on the back to say at least they tried," said Fils. "It's not feasible and it doesn't work and they end up having people falling behind."

Option One declined to comment.

Loan modifications can take several forms. Lenders can either reduce the mortgage's interest rate, which results in a lower payment; they can write off some of the unpaid principal, which could either lower monthly payments or lower overall debt; or they could postpone some of the debt or extend the life of the loan, which may lower payments in the short term, but drive costs over the life of the loan higher.

A loan modification can result in a higher payment if lenders roll back into the note unpaid principal, as well as interest and escrowed taxes, according to Faith Schwartz, executive director of Hope Now, a private sector alliance of mortgage servicers, counselors, and investors that is coordinating loan modifications.

"They tried to help them, but they could have foreclosed as the alternative," Schwartz said. She added lenders should examine the federal data to see which approach works and which doesn't. "It doesn't mean they didn't get a lower rate."

Even some professionals in the lending industry are mystified at why so many companies are charging delinquent borrowers more in a modified loan when they clearly could not afford the original, lower amount.

"I don't know why a lender would enter into that kind of agreement knowing what the outcome would be," said Kevin Cuff, executive director of the Massachusetts Mortgage Bankers Association. "Why would it not go into foreclosure? Why would it not fail?"

The new federal data did not distinguish among types of loan modifications. It showed that of borrowers receiving loan modifications earlier this year, 39 percent were 30 days in arrears after three months, and 51 percent after six months.

Dugan said 60 days in arrears is a more reliable indicator of homeowners who will ultimately lose their homes. On that measure, the results were equally dismal: More than 35 percent were 60 days past due on their mortgage payments six months after getting help.

It's clear the type of help can determine the outcome. Credit Suisse's analysis revealed that 44 percent of modifications that included higher payments redefaulted within eight months. Meanwhile, among those who had some of their principal permanently forgiven, 23 percent had redefaulted within eight months, while just 15 percent of those with adjustable rates whose rates were decreased or frozen had defaulted.

Even an increasingly popular proposal floated by the head of the Federal Deposit Insurance Corp. to refinance as many as 2.2 million troubled homeowners into affordable, fixed-rate mortgages estimates as many as a third, or about 700,000, could fall behind again by the end of 2009.

US Representative Barney Frank said that even with significant default rates, the majority of those who are helped stay in their homes and slow the bleeding in neighborhoods struggling from abandonment and blight.

Frustrated with the pace of help to homeowners, the Newton Democrat yesterday threatened to tie up the remaining half of the $700 billion financial industry rescue money unless the Bush administration provided some of it for modifying troubled loans.

Other specialists said the problem is as much the homeowners. Paul Willen, an analyst for the Federal Reserve Bank of Boston, said too many borrowers simply cannot afford to own their homes.

"Many of the people in the foreclosure process are in deep, deep trouble. They are not a modified loan away from financial happiness," said Willen. "Many people who are heading into foreclosure don't need a modification, they need an exit strategy."

Jenifer McKim can be reached at jmckim@globe.com.

NH Ranks 13th In New Economy

"In times of change, changers and learners will have unlimited opportunity, and knowers will be marvelously well equipped to succeed in a world that no longer exists"... one of my favorite quotes...

This article appeared in the NH Business Review and so is slanted to the NH results, but it should be noted that MA came in #1 in this analysis.

We can get so caught up in the never ending media barrage and the stock market woes. But we must persevere and proceeded! In my effort to never go blue sky, but continue to look for opportunities for myself and my clients, I think this puts a thoughtful look.

I have many clients and associates who are thriving, growing, changing, evolving... and so it goes!

I have the full report, The 2008 State New Economy Index, available to send you- all you need to do is reply to this blog and ask... BF



N.H. ranks 13th in ‘New Economy’

Friday, November 21, 2008

A new report has placed New Hampshire among the top states in the country in adapting its economy to the new millennium.

The 2008 State New Economy Index, released by the Information Technology and Innovation Foundation and The Ewing Marion Kauffman Foundation, nonpartisan policy organizations that promote entrepreneurship and innovation, lists New Hampshire as 13th in the country for its efforts in moving away from an economy based on older industrial models to one based on knowledge, innovation and technology.

Dr. Robert D. Atkinson and Scott Andes of ITIF, the index’s authors, define the “New Economy” as one that is “global, entrepreneurial and knowledge-based” in which “the keys to success lie in the extent to which knowledge, technology and innovation are embedded in products and services.”

Atkinson and Andes said the index measures the degree to which a state’s economic structure matches the ideal structure of the New Economy “and not merely economic performance or policies.”

It examines 29 indicators in five major areas, including knowledge jobs, globalization, economic dynamism, transformation to a digital economy and technology innovation capacity. States that ranked highest had the greatest concentration of high-tech jobs, educational institutions and entrepreneurial activity.

The researchers also said high-ranking states “tend to have a high concentration of managers, professionals and college-educated residents working in ‘knowledge jobs’ (jobs that require at least a two-year degree). With one or two exceptions, their manufacturers tend to be more geared toward global markets, both in terms of export orientation and the amount of foreign direct investment.”

Atkinson and Andes also said that states furthest along toward the New Economy tend to be “at the forefront of the IT and Internet revolutions, with a large share of their institutions and residents embracing the digital economy.”

New Hampshire ranked third in the country in immigration of highly educated knowledge workers into the state from outside of the country. The state also ranked third in alternative energy use.

“In the top six states … renewable energy accounts for more than one-third of their total energy consumption,” said the researchers.

The Granite State also did well in the percentage of the population online (fourth), foreign direct investment or the percentage of the workforce employed by foreign companies (fifth), and workforce education (sixth).

One interesting indicator in which New Hampshire ranked highly in was the use of the Internet in agriculture.

“Just as in other sectors, the New Economy is transforming agriculture,” they noted, adding that “two measures of this are the percentage of farmers with Internet access, and the percentage that use computers to run their farms.”

While the report placed New Hampshire eighth for online agriculture, it was tied with Connecticut, Maine, Massachusetts, Rhode Island and Vermont.

New Hampshire was also noted for moving up eight points in industry investment in research and development, from 16th in 2002 to eighth in 2008.

New Hampshire received low marks, however, for manufacturing valued-added per production hour worked as a percentage of the national average (39th), entrepreneurial activity (36th), use of technology in schools (39th), and the utilization of digital technologies by the government (47th).

Massachusetts was the number one state in the country for being the furthest along in moving into the New Economy.

In New England, Rhode Island ranked slightly ahead of New Hampshire at 11th, Vermont was ranked 19th and Maine at 28th.

Restaurant Values | A Quick Check

The following list was updated for the 2009 Business Reference Guide and the Business Reference Guide Online, which is continually updated.

Remember, that Rules of Thumb are just that, but will provide a quick “ballpark” idea of what these various food and drink businesses might sell for. Obviously inherent profitability, lease terms, FF&E and specific market location will all have a bearing. We will do a thorough analysis using different methodologies to determine the best offering price for a specific restaurant. BF

Bagels
30% to 35% of annual sales

Bars
50% of annual sales

Bar and Grills
(50% Liquor) 40% to 50% of annual sales

Barbecue
30% of annual sales

Bistros
30% of annual sales

Brew Pubs
40% of annual sales

Billiard Parlors
45% of annual sales

Cajun
30% of annual sales

Catering Businesses
30% to 40% of annual sales

Caribbean
30% of annual sales

Chicken
30% of annual sales

Chinese
30% of annual sales (Sales figures important)

Coffee Houses
40% of annual sales

Continental
30% of annual sales

Delis
30% to 40% of annual sales (30% if open 7 days; 40% if open 5 or 6 days)

Diners
30% of annual sales

Fine Dining
30% of annual sales

Gourmet Shops
30% of annual sales (inventory will be high)

Hamburgers
35% of annual sales

Ice Cream
35% to 40% of annual sales

Irish
30% - 40% of annual sales

Italian
30% to 40% of annual sales

Mexican
30% of annual sales

Night Clubs
25% of annual sales

Pancake Houses
30% of annual sales

Pizza (if delivery)
30% of annual sales

Pizza (if no delivery)
40% of annual sales

Sandwiches
40% of annual sales

Seafood
30% of annual sales (Very high food costs)

Sports Bars
40% to 45% of annual sales

Steakhouses
30% of annual sales (Very high food costs)

Moody's: Commercial real estate prices rise

NEW YORK—Commercial real estate prices increased in September, according to Moody's/REAL Commercial Property Price Indices, Moody's Investors Service said Wednesday.

The index rose 2.5 percent from August, but was down 7.9 percent from the year-ago level.

The CPPI now stands 9.4 percent below its peak in October 2007.

The index is based on repeat sales of the same properties across the U.S. at different points in time.

A price increase in September may seem "counterintuitive" because of a lack of liquidity and general turmoil in the financial markets and the general economy, Moody's said in its report.

"However, we believe this result can be explained by continued loss avoidance on the part of sellers and by the fact that many September closings occurred pursuant to contracts entered into in the summer, before the market turmoil of September and October," said Nick Levidy, Moody's managing director, in a news release.

Moody's also said part of the price increase also may be attributed to "some relative strength in the apartment sector," but the increase may not last.

"We believe that commercial property prices will soon start to decline again. As pressure continues to build in the sector, owners will begin selling into a deteriorating market at lower prices," Levidy said.

The top 10 markets showed modest gains in all property sectors in the third quarter, Moody's said. Office prices in the top 10 cities saw a 2.2 percent increase from the previous quarter.

Nationally, office prices were down 1 percent in the third quarter; industrial and retail prices were nearly flat; and apartment prices were up 2.3 percent.

Still, prices for the four property types are down significantly year over year, Moody's said. Compared with September 2007, apartments fell 7.2 percent, industrial dropped 10.1 percent, office was down 8.3 percent, and retail fell 9.9 percent.

Portsmouth's office market still healthy

Consultant believes demand will continue to grow despite economic woes

The former Portsmouth Herald building on Maplewood Avenue is an example of office space that is empty, but not for rent.Rich Beauchesne photo

By Shir Haberman

shaberman@seacoastonline.com

November 16, 2008 6:00 AM

There's been a lot of talk about the housing market here on the Seacoast, but the demand for office space is another indicator of the relative health of the local economy.

According to consultant Steven Berg, of Sargent Consulting Ltd. in Portsmouth, that market remains healthy as well, despite the economic downturn.

"What I'm here to tell you is that there's not much to tell you," Berg told members of the Portsmouth Economic Development Commission recently.

Berg estimated that about 8.6 percent of the city's nearly 3.8 million square feet of office space is currently empty. He clarified that "empty" does not necessarily mean available, citing the former Portsmouth Herald building on Maplewood Avenue and the Parade Mall as examples of office space that is empty, but not available.

"A range of 5 percent to 10 percent (of a community's office space being empty) is considered stable, so supply and demand appears to be stable," Berg said. "The amount of empty space (in Portsmouth) has averaged 7.9 percent over the past nine years surveyed."

However, Berg made it clear that his figures do not take into account office spaces in buildings of 10,000 square feet or less, or buildings, particularly at Pease International Tradeport that have office spaces that supports other operations, such as the now-vacant Pan Am Services building.

"One of the problems is that I have to draw the line somewhere," Berg said.

That omission prompted Portsmouth Realtor David Choate of Grubb Ellis/Coldstream to question Berg's figures if those other buildings are included in the analysis.

"My feeling is that if we went into those smaller spaces, the figure (for empty office spaces) would be closer to 20 percent," Choate said at the EDC meeting.

Berg flatly rejected that estimate.

"I agree the market may be a little softer than when I collected those numbers in the spring, but even if the figure were 10 percent, it would mean that I missed 360,000 square feet of empty office space," the consultant said. "I don't think so."

Berg said he ran his numbers past three local commercial Realtors who, he said, felt they were right on target.

The amount of office space in the city, including at Pease International Tradeport, has increased by 6.5 percent over the past year. On average, the citywide total of office space grows 4.3 percent a year, with the vast majority of office development happening at Pease, and very little in the downtown area and outlying areas.

Berg said he believes the increase in growth from 2007 to mid-2008 is the result of the addition of office spaces under construction including: Phase II of the 155 Borthwick Ave. project, the conversion taking place at 99 Bow St., Appledore Engineering's new building at 177 Corporate Drive, and the conversion of the old Flextronic building at 164 Corporate Drive into office space.

Berg said he expects the demand for new office space in the city to continue at a rate of about 75,000 to 100,000 square feet a year. That's because, according to a 2007 study by the state Department of Employment Security, New Hampshire's economy is expected to expand by 106,000 jobs by 2014, with the majority of new jobs expected to be in the service-providing industries.

"Because of Portsmouth's concentration in these employment sectors, these forecasts bode well for Portsmouth's future," Berg concluded.

With more than double the number of employers as exist in Dover and Rochester combined, and just about double the average annual employment, Portsmouth is the bellwether of the area's economy, the consultant said.

"Portsmouth is the economic engine that drives the region," Berg said. "What goes on in Portsmouth is what's happening in the region."

Maine Car Dealers Seek New Third Party Lenders

By Associated Press

November 09, 2008 12:37 PM

PORTLAND, Maine - Maine car dealers are turning to credit unions and other sources for third-party loans for their customers as bank financing becomes tighter.

Maine-affiliated banks are joining the ranks of national lenders who have cut back on or stopped lending money through automobile dealers, the Maine Sunday Telegram reported. As credit shrinks, dealers are having to turn to other resources.

Lee Auto Malls, for one, is providing more in-house financing to car buyers. It's also establishing new relationships with credit unions, which see loan opportunities as banks pull back.

"They're my new best friends," said Adam Lee, the company's president. "They want to loan money, they have members who buy cars, and I have a bunch of cars I want to sell."

Many banks and finance companies have tightened credit standards or are getting out of the third-party car-loan market because they can't borrow money to lend, or they're reluctant to lend and risk having customers default on their loans.

That means consumers are finding it harder to borrow money for cars and trucks, contributing to the downturn in U.S. auto sales, which in October slumped to their lowest level in 17 years.

Typically, seven of 10 buyers finance their vehicles through a dealer, working with third-party lenders and the financial arms of automobile manufacturers.

Ira Rosenberg, chief executive officer of Prime Motor Group, said he received letters in the past month from two Maine-based lenders, Bangor Savings Bank and Northeast Bank, and from North Carolina-based Wachovia Corp. saying they're getting out of third-party auto lending.

Those companies were among the top lenders in Maine, and their departure comes at a time when national lenders, such as GMAC Financial Services, are cutting back on the amount of credit they offer consumers. GMAC Financial, the lending arm of troubled automaker General Motors, announced last month it would only make auto loans to people with credit scores of 700 or above.

"It's a herd mentality," said Rosenberg, one of Maine's biggest car dealers.

Bangor Savings, which was a leading third-party auto lender in Maine, notified dealers in August of plans to exit the business in October. By coincidence, that's when the economic crisis hit.

"We had no crystal ball to show what was going to happen nationally to consumer lending," said Yellow Light Breen, a senior vice president at the bank.

Northeast Bank made the move in September, deciding it was more profitable and less risky to steer money to commercial loans, mortgages and home equity loans, said Jim Delamater, Northeast's president. Northeast continues to make car loans directly through its branches.

Not all banks are getting out of the third-party car loan business.

One of them, TD Banknorth, said it favors consumers with credit scores above 650 but considers each application on an individual basis. That approach isn't new, said Michael Copley, the bank's senior vice president for retail lending.

Dealers recognize the bank's conservative standards and don't forward loan applications from customers with lower scores or unfavorable credit history, he said.

Seabrook Industrial Space- 52,000 Sq Ft | For Lease

Please Forgive The Disruption...

Good day!

Thanks for stopping by...

For years, I have had a loyal following of folks stopping by to get the latest information on the Real Estate market in New Hampshire, Maine and Massachusetts. People just like you- buyers, sellers, investors, and folks just looking to keep abreast of the latest conditions and news- without the fluff.

To that end, I have decided to retool in a big way- redesign my web presence to be even more topical and interesting to you. Coming soon will be a brand new format for us- one that will encourage conversation, one that have more insight and opinion.

It's a different world out there in the real estate market today, and we're making these changes to stay ahead of the curve- you deserve nothing less!

Any suggestions or comments, please email me without hesitation. BF

Financing the Transaction

With the current economic downturn, we should see buyers who have lost their jobs, for whatever reason, searching for a way to support themselves and their families. Many will hope to find new jobs; others will decide to look at going into business for themselves. From this second group, some will start from scratch, others will investigate franchising, and still others will look to buy an existing business.

The most recent survey conducted by Business Brokerage Press revealed that seller financing was involved in only 27 percent of the transactions. SBA financing was involved in 30 percent, bank financing in 20 percent and 23 percent by “other.” Interestingly, when asked what the main obstacle was that prevented sales from closing, financing topped the list at 30 percent. This was the biggest reason for deals not closing.

Many of the buyers considering buying a business to replace a lost job may not be candidates for outside financing. They may be scraping every dollar they can for a down payment and money to live on until they find a business and receive an income from it. Others may not have sufficient experience for SBA or other financing; the business itself may not qualify due to lack of assets – such as a service business. The reasons are endless.

As you will see from the statement below, SBA qualifications are tightening up. It never fails -- the economy is tanking and the first thing the government does is tighten up SBA lending, when what it should be doing is loosening requirements and increasing the annual amount that SBA will guarantee. The more small businesses there are, the greater the increase in jobs.

In order to maintain deal flow, seller financing is going to be absolutely necessary. Certainly, SBA and other financing will be available for those really good deals and the really qualified buyers. However, there will be many deals that may have qualified for outside financing some months ago that won’t qualify today, unless requirements are lowered.

No sense in promising outside financing in today’s market. Sellers must be told from the outset that they will have to provide the financing if they hope to sell their business.

The following statement was issued by Anthony Saya, a representative of the commercial lending department of Key Bank, a major bank.
_____________________________________

Business Acquisition Financing & New SBA Policies

Buyer’s Down Payment: If any of the buyer’s down payment is coming from borrowed funds, such as home equity, the borrower and/or his family living in the same household must have outside income to meet the credit obligation for those funds.

Business Valuations: All business acquisitions require a business valuation. If the loan proceeds are less than $350,000, the valuation report may be prepared by the lender. The lender may not use a report provided by the buyer and/or seller and the lender must order this valuation.

If the business contract gives specific value to assets (not real estate) and the business financial balance sheet indicates a value less than on the contract, an independent appraisal for those assets must be obtained to support the higher valuation. The lender may not use a report provided by the buyer and/or seller and the lender must order this valuation.

Seller Financing: SBA states that the lender should explore seller financing for the goodwill portion of a business acquisition. A seller’s refusal to provide subordinate financing for the goodwill should be documented in writing by the seller and provided to the lender. SBA is expecting lenders to use prudent lending decisions when determining to provide financing without the seller’s participation.

Loan Terms: Business acquisitions with no real estate remain at a 10-year term. Real estate acquisitions remain at a 25-year term. Historically, loans that included both business and real estate were blended. Lender’s now have the option of providing a blended maturity or a maturity based on the maximum maturity allowed for the asset comprising the largest portion of the use of loan proceeds. For example, if the majority of loan proceeds are financing real estate, a maximum term of 25 years is allowed. Verify with the lender what method will be used to determine the maturity.

Life Insurance: If the business management is tied to an individual or a group of individuals, life insurance is required. The amount of life insurance is to be determined by the lender taking into consideration the type of collateral and the liquidation value of the collateral.

Gas stations: The property may not have any contamination above state and federal regulation. Any and all levels above the minimum allowed by state and federal regulations must be cleaned up and reported as such before loan can be approved. If the level is in the acceptable range, however some reasonable clean up or monitoring remains, the financial means to make that happen need to be addressed and be satisfactory going forward. Loan proceeds are not to be used for this ongoing clean up and/or monitoring.

The seller and the buyer must sign an SBA Environmental Indemnification Agreement without revisions. The seller’s liability under the Indemnification Agreement is only up to the time period when the property is transferred. The fuel supply company does not sign this agreement unless it is the seller or the party responsible for on going clean up and/or monitoring.

Fuel Supply Agreement must not have any controls of the business management or an automatic purchase agreement at the end of agreement.

The real estate property title must not have any unreasonable covenants/deed restrictions that would prevent the lender from liquidating and selling the collateral, other than normal municipality zoning rules.

Lender must have the following in advance to make loan approval: Property Title Policy; Environmental Report; Tank & Line Pressure Testing; Real Estate Appraisal; Fuel Supply Agreement.

Lender Referral Fees: When a referral fee is paid by a lender or a borrower, this must be disclosed on a SBA 159 Compensation Form disclosing the actual fee which the borrower, Lender, and referral agent must all sign. If the fee exceeds $2500, an itemized invoice is required. A lender and borrower cannot both pay a referral fee for the same transaction. A borrower can pay a packaging fee and a lender can pay a referral fee on the same transaction.

Seller has existing SBA Loan: If a lender has an existing SBA loan to the seller and is financing the acquisition, the lender may not process the request through any expedited loan program. The request must be submitted to the SBA Loan Processing Center for final approval.

Collateral: SBA no longer allows lenders to provide a value to accounts receivable and inventory when determining collateral coverage, even if those assets are required as collateral on term loans.

Masiello Group Joins Forces with Better Homes and Gardens

I wanted to send along a note so you heard this news from me rather than the media.

Sound familiar? It was this time last year we were all excited that The Masiello Group was going independent... Well. something came up. Something big. In August, Chris Masiello got offered a deal we just could not refuse...

Effective November 15th, The Masiello Group is entering into an unprecedented business relationship with Better Homes and Gardens. Unlike a franchise, this is a joint venture, and we have exclusive rights to the BH&G name, marketing clout and services for northern MA NH VT and ME for a 20 year period. This is groundbreaking in terms of the type of relationship. Real estate companies looking to tie in to the Better Homes and Gardens family in our area would have to be to be acquired by or merged with The Masiello Group. The Masiello Group is the very first company in the country to have such a business relationship with BH&G, there is projected to be a network of 20 agencies nationwide.

What does this mean for you? A lot. Effective November 15th, our buyers & sellers will receive significant additional marketing exposure and services through this new relationship. This in addition to the state of the industry tools The Masiello Group already employs.

For example BHG.com, the website that compliments BH&G magazine, offers many other services relating to home, lifestyle and now real estate. Eight out of ten homeowners subscribe to a BH&G publication and 5 million unique users visit their website every month, which now is part of our portfolio of services.

In the coming weeks you will see new yard signs around town, beautiful larger signs, and I invite you to visit BHG.com to explore their fun and exciting ideas.

The commercial business will be unaffected by this change. We will remain with the brand The Masiello Group Commercial Associates. Same great professionals providing comprehensive commercial and business services.

Any questions or comments, please let me know.

Hampton NH Industrial Space on Busy Route 1

Amesbury Mixed Use Property ~ Market Square!

Rating Today's Business Buyers

Once the decision to sell has been made, the business owner should be aware of the variety of possible business buyers. Just as small business itself has become more sophisticated, the people interested in buying them have also become more divergent and complex. The following are some of today's most active categories of business buyers:

Family Members

Members of the seller's own family form a traditional category of business buyer: tried but not always "true." The notion of a family member taking over is amenable to many of the parties involved because they envision continuity, seeing that as a prime advantage. And it can be, given that the family member treats the role as something akin to a hierarchical responsibility. This can mean years of planning and diligent preparation, involving all or many members of the family in deciding who will be the "heir to the throne." If this has been done, the family member may be the best type of buyer.

Too often, however, the difficulty with the family buyer category lies in the conflicts that may develop. For example, does the family member have sufficient cash to purchase the business? Can the selling family member really leave the business? In too many cases, these and other conflicts result in serious disruption to the business or to the sales transaction. The result, too often, is an "I-told-you-so" situation, where there are too many opinions, but no one is really ever the wiser. An outside buyer eliminates these often insoluble problems.

The key to deciding on a family member as a buyer is threefold: ability, family agreement, and financial worthiness.

Business Competitors

This is a category often overlooked as a source of prospective purchasers. The obvious concern is that competitors will take advantage of the knowledge that the business is for sale by attempting to lure away customers or clients. However, if the business is compatible, a competitor may be willing to "pay the price" to acquire a ready-made means to expand. A business brokerage professional can be of tremendous assistance in dealing with the competitor. They will use confidentiality agreements and will reveal the name of the business only after contacting the seller and qualifying the competitor.

The Foreign Buyer

Many foreigners arrive in the United States with ample funds and a great desire to share in the American Dream. Many also have difficulty obtaining jobs in their previous professions, because of language barriers, licensing, and specific experience. As owners of their own businesses, at least some of these problems can be short-circuited.

These buyers work hard and long and usually are very successful small business owners. However, their business acumen does not necessarily coincide with that of the seller (as would be the case with any inexperienced owner). Again, a business broker professional knows best how to approach these potential problems.

Important to note is that many small business owners think that foreign companies and independent buyers are willing to pay top dollar for the business. In fact, foreign companies are usually interested only in businesses or companies with sales in the millions.

Synergistic Buyers

These are buyers who feel that a particular business would compliment theirs and that combining the two would result in lower costs, new customers, and other advantages. Synergistic buyers are more likely to pay more than other types of buyers, because they can see the results of the purchase. Again, as with the foreign buyer, synergistic buyers seldom look at the small business, but they may find many mid-sized companies that meet their requirements.

Financial Buyers

This category of buyer comes with perhaps the longest list of criteria--and demands. These buyers want maximum leverage, but they also are the right category for the seller who wants to continue to manage his company after it is sold. Most financial buyers offer a lower purchase price than other types, but they do often make provision for what may be important to the seller other than the money--such as selection of key employees, location, and other issues.

For a business to be of interest to a financial buyer, the profits must be sufficient not only to support existing management, but also to provide a return to the owner.

Individual Buyer

When it comes time to sell, most owners of the small to mid-sized business gravitate toward this buyer. Many of these buyers are mature (aged 40 to 60) and have been well-seasoned in the corporate marketplace. Owning a business is a dream, and one many of them can well afford. The key to approaching this kind of buyer is to find out what it is they are really looking for.

The buyer who needs to replace a job is can be an excellent prospect. Although owning a business is more than a job, and the risks involved can frighten this kind of buyer, they do have the "hunger"--and the need. A further advantage is that this category of buyer comes with fewer "strings" and complications than many of the other types.

A Final Note

Sorting out the "right" buyer is best left to the professionals who have the experience necessary to decide who are the best prospects.

Top 3 Franchise Questions

Why would I want to buy a franchise?

Franchises have the highest success rates and the lowest failure rates of any business in North America today! Over 95% of all franchises are still in business after five years because they all come with built-in proven success formulas used by franchisees across the country. When you purchase a franchise you will receive on-going support for the life of the franchise. By on-going I mean, marketing, training and management support guaranteed by your agreement with the franchisor.

Why should I pay royalties?

Royalties are the magic that makes the formula work. What would it cost you to hire a management, marketing, advertising and customer support team? The answer is… a lot more than the typical owner would ever spend! How much would you put back into the business? You certainly couldn’t hire this group for under 10% and the vast majority of all royalties are between 4 and 8%. The wonder of royalties is that instead of the individual owner footing the bill to run his or her business the expense is shared with all of the franchisees within the organization.

How much money can I make?

This is the most frequently asked question and franchising allows the buyer the perfect way to get the answer. The franchisor will supply to the prospect a complete list of their franchises with names and phone numbers and they will require the prospects to call as many of the franchises as possible. This is wonderful because it allows the buyer to ask all of the “real questions”, such as: How much money can I make? How long did it take you to get your business up and running? Were there any surprises that I need to know about? What is the franchisor really like and any other questions that you can think of. Many franchisors have printed earnings claims in their UFOC documents but they will still insist that all interested buyers call the franchises and get the “real answers”.

NOTE: There are many more questions that should and will be answered by the Franchisor

How's The Market?

Often I receive a call from someone asking what the difference is between a seller’s market and a buyer’s market. These terms are thrown around, with the basic understanding that a buyer’s market benefits the buyer, and vice versa. While that is a true statement, having an idea of where those terms come from and how to determine the difference might make things a bit clearer, and may put you at an advantage in the marketplace.

Let’s start with a couple of solid assumptions:

- The Real Estate Market is a Supply/ Demand market.

- Real Estate market conditions vary depending on price range, location and interest rates.

Absorption Rate

This is a critical measurement of the current market conditions. Simply stated, absorption rate is the amount of time it will take to sell the quantity of properties on the market in a given time frame, using recent data as a barometer. The more precisely you define your parameters, the more accurate your result will be. For instance, homes in the seacoast of NH might range in price from $130,000 to over $5,000,000. Obviously, data derived on that wide cut will produce results that are unusable. You might want to narrow the criteria to single family homes in Hampton between $300,000 and $400,000, using sales data for the last 12 months.

Using those parameters, if there were 12 homes on the market in Hampton in that price range, and 36 homes had sold in the past year in Hampton in that price range, it would take four months to sell the current inventory of homes. Another way to express this is to say the Absorption Rate is 4.

What Is The State Of The Market?
This is a loaded question. Generally speaking, experts consider a 0 to 3 Absorption Rate to be a seller’s market, a 3 to 4 a balanced market, and over 5 months supply to be a buyer’s market. This is the law of supply and demand at work- if there is more demand than supply, the absorption rate is low and the prices increase. Conversely, if there is more supply than demand, properties sit on the market longer and the prices fall.

What is the current Absorption Rate?
Is it a buyer’s market? Is it a seller’s market? As you can tell from the previous information, there is no one answer. It depends on your location and price range, and the results are constantly changing.

Why Is This Important?
Do you want your house to sell quicker than the competitive properties in the marketplace? Of course you do. Time is money. When you are marketing your home, the expenses continue- mortgage, interest, insurance, taxes and utilities. Acquiring, understanding and utilizing market data pays off in spades. Knowledge is indeed power in the real estate market. A thorough understanding of market conditions coupled with specific competitive property information and a disciplined approach and execution of your plan will make you master of your market. You will get the best possible price for your property in the least amount of time. Now that’s a win-win situation!