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Wilkes-Barre Business Law Blog

Time management for entrepreneurs

Entrepreneurs in Pennsylvania and around the country must manage their time carefully. Designing a website, creating a logo and drafting a company mission statement may seem like important tasks, but they do little to generate revenue. Instead of focusing on developing a business brand and identity, experts in this area recommend that entrepreneurs devote their time to tasks that will produce sales and bring in money right away.

This is important because most businesses are valued based on the revenues they generate rather than the cleverness of their marketing strategies. While unique selling propositions and innovative products or services may interest investors, they are generally reluctant to financially back nascent commercial ventures that have yet to prove that they can attract customers on a regular basis. Investors may also be deterred by entrepreneurs who seem overly concerned with matters that do not directly impact their bottom lines.

Commercial real estate market may not be as strong in 2018

According to the Mortgage Bankers Association's annual report, 2018 will not be as strong for the commercial real estate market as 2017. The group cites slow growth in net operating income and rising interest rates as among the reasons why anyone considering investments in CRE ventures in Pennsylvania may wish to proceed with caution.

On a positive note, solid income returns for commercial real estate investments are expected to continue. However, predicted slow growth may impact the rate at which property values increase. The Mortgage Bankers Association also believes the tax reform bill passed in 2017 could help offset the slower growth by boosting after-tax yields on real estate investments involving commercial properties.

Getting financing for a small business

Pennsylvania residents who want to borrow money for their small businesses may find it difficult to obtain financing. However, by taking time to plan properly, business owners can improve their chances of obtaining the financing they may need. The preparation entails making sure that they have documents pertaining to their financial history, a business plan and projections regarding their finances.

When meeting with a prospective lender, the business owner has to be able to tell his or her company's story to the lender, which can be accomplished by presenting the financial history of the business. For a business that has already been established, the owner should obtain three years' worth of personal and business tax returns. The lender will use these documents to detect trends in the business.

Preparing for construction mediation

Contract disputes occasionally arise between Pennsylvania businesses. Many companies are able to resolve their disputes through mediation. Some companies may have contracts that call for mediation in the event of a dispute while others elect to mediate their disputes so that they can continue to perform under their contracts.

Mediation involves the parties meeting with their lawyers and a neutral third party. The mediator works to facilitate a resolution to the issues. The parties who are participating are able to control the process and its outcome. Mediation can offer a way for construction businesses to resolve their differences without the expense of undergoing protracted litigation, making it a valuable process.

Strategies for avoiding or resolving construction disputes

Most construction projects in Pennsylvania involve substantial investments by both a project owner and contractor. Contracts form the foundation of their relationship. Careful consideration of every detail for the project, including the potential for disagreements between the parties, could prevent costly and time-consuming disputes.

During the development of a contract, the parties should pay close attention to clauses that guide the dispute process. These could serve as preventative measures that keep the parties out of court and on track for completing the project. Both parties should spend time reading the contract and discuss clauses that appear unclear or problematic and adjust them for clarity. Diligent efforts to calculate precise estimates, establish a building schedule and hire subcontractors during the planning phase could also limit problems once ground is broken.

Loans for Pennsylvania small businesses

Some people would say that small businesses are the backbone of the American economy. However, for these small businesses to survive and thrive, they need to have access to funding, which can come in the form of either an investment or a loan.

The ease with which a business can access funds is contingent on several factors, including the economy and the state of the business itself. Fortunately, the economy is no longer as uncertain as it used to be. Furthermore, businesses are experiencing better cash flow, which puts lesser stress on their working capital. Consequently, 89 percent of small business owners and 92 percent of medium-sized business owners believe that their businesses are poised to grow during the fiscal year of 2018.

About construction defects

Pennsylvania homeowners who have a construction defect in their home should know that the value of their home may be reduced because of that defect. Examples of obvious construction defects may include water seepage; however, there are several defects that are not as noticeable and may not be noticed until many years after the construction of the home.

There are number factors that can contribute a construction defect. Many times, the defects are the result of multiple factors, such as substandard materials, improper preparation and analysis of the sole, poor workmanship, negligent construction, inadequate structural and civil engineering and the planning and selection of the home site.

Co-working space experiencing tremendous growth

Stakeholders in the Pennsylvania commercial real estate marketplace might want to turn their attention to co-working and flexible office space. While co-working offices account for a small percentage of the available square footage, it has been quickly growing since 2010.

According to a report, co-working and flexible office arrangements have experienced double-digit growth in the past eight years. Driven by the success of WeWork, an increasing number of landlords are now offering co-working and flexible working spaces as well. Co-working offices allow landlords to charge lower individual rents while garnering higher profits on the spaces that they own overall.

Profit margins slim for e-commerce food companies

The convenience of online shopping has attracted many consumers in Pennsylvania, but online-only e-commerce food and grocery companies do not have an easy path to success. Skipping the investment in a brick-and-mortar location saves startup companies money, but they then have to spend resources on marketing, distribution centers, shipping and employees. As a result, e-commerce profit margins in the food sector are even lower than brick-and-mortar grocers.

Entrepreneurs considering an entrance into food e-commerce must weigh the benefits of a physical location against the reach of an online marketplace. Money spent on a good store location could produce better returns than spending heavily on digital advertising to send traffic to an online store. Online selling also has a reduced ability to up-sell customers who might impulse buy items while shopping at a physical location.

How businesses can find working capital

At some point, a business may need a loan for help through a slow season or to repair critical equipment. The first step in the loan application process is determining how much to borrow. Ideally, companies in Pennsylvania or anywhere else in the country will only take what they can afford to repay without causing cash flow issues. A loan-performance analysis may help a business owner determine the appropriate amount to borrow.

Before accepting any loan, business owners should be sure that they are getting the lowest interest rate and are aware of any fees a lender may charge. This may make it more likely that a company is able to pay back the loan in full in a timely manner. To get the best rates and terms, it may be a good idea to review all available loan options. Small business owners may be able to get financing through the Small Business Administration (SBA).