James D. Stice, PhD, is the Distinguished Teaching Professor of Accounting in the School of Accountancy at BYU. Professor Stice has been at BYU since 1988. He has co-authored three accounting textbooks and published numerous professional and academic articles. In addition, Professor Stice has been involved in executive education for Ernst & Young, Bank of America Corporation, International Business Machines Corporation, RSM McGladrey, and AngloGold Limited and has taught at INSEAD (in both France and Singapore) and CEIBS (in China). He has been recognized for teaching excellence by his department, his college, and the university. Professor Stice currently serves on the board of directors of Nutraceutical International Corporation.
Personal collateral requirements depend on the loan amount and the project. Does the coffee franchise involve commercial real estate or will the business be leasing a space? Collateral can be in different forms. Real estate equity is one form of collateral. Cash (in the form of a payment reserve or a CD) is another. We would need to know the specific project cost breakdown to know what might be possible. Rule of thumb would be to plan on 25% personal equity into the business and the bank will finance 75%. If it is preferred to avoid putting a lien on personal real estate, plan to have 18 months of loan payments to set aside in an escrow account at the bank as a payment reserve. The payment reserve can be released back to you after 2 years, as long as the business is showing good cash flow and making the loan payments without a problem. The other option is a CD held at the bank for the term of the loan. The CD is usually a smaller amount of funds than the payment reserve but is held for the entire term of the loan.
Websites like Fundera serve as a marketplace for business owners to find lenders that match their business needs. The company works with every major lender in the United States and matches business owners with an advisor who can help them find the right lender for their business. You can also seek out online funding on your own. Read through reviews on ConsumerAffairs to find an online lender that matches your needs.
When you get a HELOC your personal home will be used as collateral. This means that if you fail to make payments in the future then you could lose your home. That is the risk that comes with the benefits of receiving access to low interest rate funds as you need them. With a HELOC you can borrow up to 80-90% of your home equity with an APR as low as 3%. You must have a credit score of at least 650 to qualify.
When you do a ROBS, you basically sponsor a retirement plan under your franchise, rollover funds from your personal retirement plan to the company retirement plan, and use those funds to buy shares of stock in your business. The sale of stock creates the capital needed to start or buy a new franchise or recapitalize an existing franchise. Read our in-depth guide on ROBS to learn more about how it works.
He has been on the full-time faculty at Rice University, the University of Arizona, and the Hong Kong University of Science and Technology (HKUST). He has also been an Executive MBA lecturer at HKUST, SKOLKOVO (Moscow School of Management), China Europe International Business School (CEIBS), the University of Illinois (US), and INSEAD (Singapore and Paris). Professor Kay Stice has received awards for high-quality teaching at Arizona, Rice, and Brigham Young University, and he was twice selected as one of the top ten lecturers at HKUST.
If you own the business entirely by yourself and plan to be responsible for all debts and obligations, you can register for a sole proprietorship. Be warned that this route can directly affect your personal credit. Alternatively, a partnership, as its name implies, means that two or more people are held personally liable as business owners. You don't have to go it alone if you can find a business partner with complimentary skills to your own.
Stock Option Plans are an extremely popular method of attracting, motivating, and retaining the best employees, especially when the company is unable to pay high salaries. A Stock Option Plan gives the company the flexibility to award stock options to employees, officers, directors, advisors, and consultants, allowing these people to buy stock in the company when they exercise the option.
Our course starts at the very beginning with setting up QuickBooks for your business. We cover how to record your income and expenses, how to manage bank and credit card transactions and how to run financial statements. There are a total of 39 tutorials in our QuickBooks course spanning seven lessons. Each lesson has been broken down into bite-sized tutorials. Each QuickBooks tutorial includes a video where we demonstrate the concepts presented in each lesson.
Reviewing the brands franchise disclosure document (FDD), speaking with existing franchisees and financial professionals, in conjunction with support from the franchisor, will help you formulate your business plan and build financial projections. Outlining your management and marketing skills, past successes and future goals by including resumes for yourself, planned partners and other employees will allow all parties involved, from the franchisor to lenders, to understand the strengths of the ownership and management team. Personal credit history and financial strength will also play an important role in opening a franchise business.
So think about how you can diversify your own business. Think about the risks you’re subject to, the technologies you’re dependent on, and how changes in the competitive landscape could blow you off course. Then come up with ways in which you can create multiple income streams, so that if one product or service is no longer popular, others can pick up the slack.
In Canada, you can get a free credit report by contacting one of the two credit reporting agencies, TransUnion or EquiFax Canada. To receive your free credit report you will need to mail or fax one of these companies a request along with copies of two pieces of I.D. Note that you will not be able to get a free credit report through the website of either company; you will be charged a fee for an online report. CreditKarma provides free online credit reports through much of Canada.
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