Wilkes-Barre Business Law Blog

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).

Lower real estate prices force investors to seek risk

Citizens of Pennsylvania might be surprised to learn that the beginning of 2018 did not bode well for commercial real estate; nationwide prices dropped by 0.3 percent just last month alone. This drop was the latest in a series of consecutive drops that has lasted nine months so far. These declines have been interpreted by some as the real estate plateauing after having reached historic highs.

However, whether it is a plateau or a plummet, this decline in prices has had some repercussions on the real estate investing sector, the first of which is a shortage of good investments. Consequently, several funds have refrained from investing their money in what they deem subpar investments, ballooning in the process the amount of money in their reserves. Reserves of global real estate funds are estimated to have risen by $12 billion over the past year.

What big companies look for when acquiring a startup

For a large majority of entrepreneurs, whether in Pennsylvania or in Silicon Valley, the dream is to start a business, grow it, eventually sell it off and make a hefty profit in the process. Fortunately, this dream is well within reach given that there were more than 50,000 merger and acquisition deals struck last year, amounting to $2.6 trillion. It is estimated that this year will set a new record with $3.6 trillion in deals.

Every entrepreneur should be aware of what a large company is looking for when considering buying their startup: the company's talent, its platform, the technology it uses or has invented, the company's distribution model, its brand or its access to a particular demographic. Wanting a smaller company for its talent can range from trying to acquire its leadership to moving in on a unique team that will add something new to the parent company. As for the platform, some startups can create such a powerful platform that it can be coveted by bigger companies, which was the case when Microsoft acquired LinkedIn and when Google acquired YouTube. When it comes to technology, if a startup is using proprietary technology or has invented and patented its own tech, a larger company may find it beneficial to attempt an acquisition. Similar to inventing new technology, coming up with a unique distribution model that out-competes current models is enough reason for a larger company to swoop in, such as when Unilever bought the Dollar Shave Club.

How to launch a successful startup

Throughout its journey, any startup faces numerous obstacles along the way whether it is based in Silicon Valley or Pennsylvania. Fortunately, earlier startups, both those that succeeded and those that failed, have offered the world a wealth of experience and lessons that can help guide any budding enterprises.

No matter what an entrepreneur has in mind, every startup should pass through the following steps should it wish to thrive. To start with, a startup must be based on an idea that addresses an actual problem people have; otherwise, it will fail to give people a compelling reason to part with their hard-earned cash.

SBA loans to start off the New Year

For small business owners and entrepreneurs in Pennsylvania, the year 2018 holds significant promise. The economic recovery enjoyed in recent years is poised to continue, and the overall climate for doing business is likely to improve with the passing of the Tax Cuts and Jobs Acts of 2017, which means that the New Year will present opportunities for those seeking small business loans.

The United States Small Business Administration offers substantial assistance to entrepreneurs who cannot obtain adequate financing from investment partners or other sources such as commercial banks. The SBA is not a lender per se; however, this federal agency can provide the guarantees necessary for a bank to extend a business loan. In some cases, the SBA also offers grants to qualified enterprises along with loan guarantees.

Tax plan may be helpful to commercial real estate investors

Pennsylvania residents may be impacted in a variety of ways by the GOP tax bill. Those who profit from commercial real estate holdings may benefit in a couple of different ways. First, it may be possible to create a pass-through entity and receive a 20 percent tax deduction on those earnings. This may be available to individuals who are making less than $157,500 or joint filers making less than $315,000.

According to some analysts, the idea is to get people to stop worrying about preserving capital and start using it to grow the economy. Ideally, the new tax code will provide motivation for people to start building and investing in new commercial real estate projects. However, some say that the new tax code is nothing more than short-term thinking. In the long run, tax rates may be less important than the overall health of the economy when it comes to commercial real estate.

Commercial real estate leasing

Pennsylvania business owners that are looking for commercial real estate to lease and property owners with available space should expect to have to negotiate their leasing terms. Due to the condition of the commercial real estate market, business owners may have the upper hand. For example, someone who owns a business park that is sparsely occupied may allow generous concessions in order to obtain a commercial tenant. However, if the commercial real estate market is thriving, or the commercial space in question is a highly sought-after space, it may be the business that is attempting to lease the space that may have to allow significant concessions.

Rent price should be carefully considered before agreeing to commercial leasing terms. A negotiation of the price may be possible depending on certain factors, such as location and market conditions.