Declaring that "the present state of the economy demands intensified evaluations of small and mid-market business expenses" -- from leasehold/rent costs to debt service -- before a business can qualify for a sale or financing, Randall Barondess, C.B.B., director of the Thousand Oaks-based Business Brokerage Division of Troop Real Estate, Inc. announces expansion of its services to include such key offerings as financial recasting.
"Today’s economy demands a hard, objective look at cash flow, a company’s debt service and leasehold/rent costs before a business can legitimately quality for a sale or financing opportunities as outlined by new Small Business Administration guidelines," Barondess said.
A major part of this process, he added, will be lease abatement and reduction negotiations to meet current economic conditions and lease values on behalf of clients."The objective is to reverse negative or inadequate cash flow positions and make it feasible for companies to remain liquid and in business to weather the current downturn. Ultimately, the winners end up being both landlords and our clients," Barondess emphasized.
Barondess explained that with commercial property "taking hits every day", and as empty space increases, business failures continue to rise. In this landscape, he said, financially healthy tenants become harder to find, and property management companies and building owners alike must consider re-evaluating their market rent positions toward struggling tenants.
"Our services provide professionally prepared reports, financial recasting recommendations, and intermediary negotiations to hopefully keep a businesses alive. Diminished home equity has impacted small businesses with reduced credit and the ability to float a company’s cash flow. Therefore, vacancy leads to vacancy, and we need to help prevent it. The sale or financing of a business correlates with it’s ability to service its debt," Barondess added.
Describing financial recasting, Barondess said: "Operating statements of a business are adjusted to reflect the actual financial position of a company. Business ownership is normally managed to minimize taxable income. Recasting allows adjustments to operating profit/loss statements and balance sheet items. This allows a true assessment of a company’s value. Evaluating earnings before interest taxes depreciation and amortization is another form of evaluating a company’s worth."
Reflecting the announcement of the firm’s expanded services, Barondess also announced that Troop has changed its division’s name to incorporate the new direction, now calling it Troop Business Services Division – Business Sales, Mergers and Acquisitions.
For more information, contact Barondess, a California Certified Business Broker, at Troop Business Services Division, (805) 494-1128, ext. 416
Categories: Business Broker Information