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    9 Replies Latest reply on Feb 18, 2009 5:10 PM by paratech

    I got my funding!I have many questions on what to do next..

    wide_eyedgrl Newbie

      I could not be happier. I got approval for my funding! Up until now that was my biggest concern.

      Quick overview: I put 30% down on an already established cafe in Miami Beach, Contract states I will have remaining monies paid by the 30th of this month. Not having the funds on hand, it meant applying for small business loans, or finding a private invester. All which everyone assured would be very difficult. I met with my local bank (bank of america) and having good standing and knowing that my family and i have banked with them for many years. They sat down with me and my father and came up with a solution to getting me my loan. I requested 35, 000$ and got approved with no problem. I am so thankful to my parents fo being so supportive.

      Now that my funds are no longer my big concern. I have so much to do in the next 4 weeks, before i take over the cafe. Many questions I have, I seem to get multiple answers of which none are helping me. Hopefully someone out their in this business community has done something similar and can relate and help me get some answers to my questions.
      ps. the current owners are not business savvy and have been unable to help me answer any of these questions. I do not know how they did their paperwork and got licensing, since they do not know how to help me out!?

      1.) The cafe is still currently running until the 30th under the previous owner. Can anyone help me understand how licensing works. Is the license transferable? Do I need to apply for one on my own? will I be able to run the cafe with the current owners license until i get my own? Is their a website I can go to to help better understand licensing?

      2.) What is an IT number? and how do I get one? Do I need one? Once again, it is just something people have brought up.

      3.) I keep hearing that everything I do needs approval and a license. I plan to change the name of the current cafe (Gelato cafe) sounds to much like an ice cream store to me. In order to change the name, someone told me i need approval and a license to put up a sign. Is this true? if so where do I go to get approval? Where do I get signs made for my building? Does anyone know of a company? (decently priced of course)

      4.) I need to have a better understanding of the food permit, and where do I go to get one? Or is the current food permit from the owners transferable?

      5.) Is their any other licening or documentation I must have in order to run my cafe? ( beer and wine is an idea, but maybe later on)

      Note: I know it seems like alot of questions that a business owner should know in order to run a succesful business. However, unfortunately these are things I have not learned at school nor at my current job. I know once i get up and running I will run a succesful business. Its just getting to that point that I need help with. I know it is alot, but if anyone can help answer any of these I would greatly appreciate it!

        • Re: I got my funding!I have many questions on what to do next..
          LUCKIEST Guide
          I have many questions on what to do next. Congrats and good luck.

          Start by making lists. Do you have an Accountant?? Lawyer??
          Do you know about SCORE. SCORE is FREE and helps people in business succeed.

          Once you have a business name, you should register with the IRS and get a Federal I D Number.

          There is a company online called businesslicenses (one word) that will get you all the licenses
          and permits you need to operate by your zip code.

          Good luck, LUCKIEST
          • Re: I got my funding!I have many questions on what to do next..
            DomainDiva Ranger

            Your accountant can help you with the things you have mentioned. If it were me, I would meet with the staff and find out what is really going on with the business and what they would do to make improvements. If the previous owners are not answering any questions you may be in for some serious surprises. What kind of due diligence did you do prior to the purchase? Audit of the books and bank accounts? Audit of business licenses and tax returns? I can't picture anyone loaning money without these questions being answered.

            If this cafe is successful, why do you wanty to change the name? Because you don't like it? Not a good enough reason. If you change the name former patrons may be just that...former patrons.

            Wait for a few months and see how the business is going, if you have a regular clientele, you may want to have a contest to remane the cafe..that way...you don't lose the identity and any business that goes with it.

            Get an accountant and a lawyer immediately.
            • Re: I got my funding!I have many questions on what to do next..
              Tracker

              Congratulations on getting your funding. I did not see your post sooner so my reply may come too late to you to help you with your questions but it might help others who read this:

               

              • 1) you need to have your business established as business entity (either a sole proprietorship, LLC or corporation). That entity would then get the appropriate business license for your business. You can find out about what license fees are and what is required by contacting your local city government to direct you to that specific department. Check out:* http://www.miamidade.gov/csd/business_lic
                ensing.asp
              • 2) Not sure what IT means but they may be referring to your Sales & Use Tax number with the Florida state Department of Revenue.
              • 3) Your area may have sign ordinances that control what your business signs can look like and may have a board that has to review any changes to see if it meets their code/ordinance.
              • 4) Again, check with your local licensing department. They will help with you specific questions.
              • 5) Basic business license and any food & beverage vendor licensing required by state/local government.

              I'll paste here something from one of my books about buying businesses - an excerpt from the chapter on some of the things you should do after you buy the business. Some of it might be helpful to you and others:

               

              ---

               

              After The Deal Is Closed

               


              Once it was just another deal you were looking at ... now it's for real!

               


              It's your business and just like you prepared to buy a business; now you have to be prepared to own and run one.

               


              Post Closing Tips:

               


              One of the first things you should do is to meet with the employees.

               


              I would meet as a group to introduce yourself as the new owner of the business; also telling them that you will meet with each of them individually.

               


              For the individual meetings you should start by position and seniority; meeting with your management, then supervisors and then their direct reports; the employees that probably make up the bulk of your business.

               


              As you have looked at the business prior to buying, you will have probably formulated some questions to ask your employees; here is one that I have found useful in gaining more insight into the business and the mindset of the employee:

               


              What is the number one thing that you would do to improve the business if you were the owner?

               


              And when they answer that one ...

               


              What would you do next?

               


              And so on; generally try to discover the top 5 things that each employee feels should be done to improve the business.

               


              Some may not have any ideas ... but some will.

               


              Not all that they tell you will be practical or things that you want to do immediately or perhaps not at all. But you will find key things that their experience leads them to believe that would improve the business.

               


              I have never failed to find at least 1 or 2 very good ideas for improving the business by doing the above.

               


              Often you will find out the previous owner did not really listen to their employees; this is not uncommon with sole owners who have owned the business for many years ... sometimes they begin to tune things out.

               


              If during your review of the business; you found any slack or sloppiness in any of the business operations (again not uncommon with long-time owners) ... then you would want to begin to tighten up and improve those areas.

               


              That does not mean come in and make sweeping or radical changes; this means first of all understanding the business process; its intent and current method and then making corrections to get it in line with what you want that makes improvements to the business.

               


              Many business owners run their business as their personal piggy-bank. And that is OK; they are the ones that have to deal with any issues that may come from that. You have just bought the business using a leveraged buy-out. You cannot run the business and use it as something to just pull cash out of as you please. You probably have more debt that the business has to pay for than it did formerly and you certainly have obligations to the former owner that the business has to pay for.

               


              With that in mind:

               

               

               

               

              Very Important Note

               


              As the new owner you need to immediately implement cost controls so that the business does not spend more than it needs to operate.

               


              The more money that you save or that rolls to the bottom line ... the larger your safety margin.

               


              With a business just as it is with individuals ... few things are better than money in the bank!

               


              If the business in the past has had lax financial controls ... get with your accountant and tighten things up. Put in whatever controls are necessary for you to run a tighter (and more profitable) business.

               


              Bottom line cash flow is your business life blood and it needs to keep pumping while the business pays for itself and any obligations to the former owner over the term of your agreement with them.

               


              But in your effort to control costs, do not forget that sales/marketing and customer service are not areas you would want to make cuts or reduce costs unless it is clear that there is money being wasted.

               


              Look very closely at the customer side of your operations ... if for every $1 you are spending in marketing is gaining (or keeping) a customer that spends $10 ... then that is probably money well spent. Keep in mind that paying customers are what keep you in business.

               


              The above is all part and parcel of your next important consideration.

               


              Preparing your own exit-strategy!

               


              If you improve the operations of the business to make it more profitable (and have the good accounting records to show it); you have with that step made your investment more valuable.

               


              In a few years you may want to sell the business as part of your long-term strategy. Certainly you want to plan for that even if you choose not to sell. It's when you don't give that some consideration and planning that you find most often that life deals you some sort of challenge. If it is a serious challenge you may need to do something with the business ... and if you have not operated it with selling in mind at some point; you may have problems selling for good value and with a reasonable expectation of selling in a short period of time.

               


              Don't be like the owner who never planned for the sale of their business, never ran it properly and ended up taking a long time to sell and then having to sell for much less than they might have received. That happens more often than you think.

               

              ----

              I hope the above is helpful.

              Dennis Lowery
              Adducent, Inc.
              • Re: I got my funding!I have many questions on what to do next..
                Worldwide Newbie
                The best advise that can be given at this point is to organize. Look us up and we may be able to help.
                • Re: I got my funding!I have many questions on what to do next..
                  paratech Newbie
                  Congratulations with your funding. It seems to me that you have lot's to do and on a budget. We operate out of Miami and everything is quite expensive here. 1) You need a business and marketing plan 2) You need to form an entity so you can operate your business. The type of entity you form would depend on whether or not you are going to be the sole owner of the business or partner up with someone. Once you know what type of entity you are going to operate under, you can go to www.Sunbiz.com and file your Articles on-line. 3) You need to get a Federal Tax I.D. number for the entity of which you can obtain at www.irs.gov. Please check with an accountant to see if it would be to your advantage to file for a "Sub-S" election with the IRS (you are still eligible for 2009). This would depend on the type of entity you choose. 4) You are going to need several licenses: City, County, Food and Beverage - www.miami-dade.gov. 5) Bank Account ....

                  We can help you with the initial set up of your business (Corporate Name, Articles, Tax ID#, Licenses, Permits, etc.), since we are in Miami and very familiar with the process. However, I strongly suggest that you seek some legal advice. There are some lawyers who work on a collaborative basis, and this will avoid your running a huge bill. Please feel free to contact me through our website should you have any further questions.

                  Theresa Wright
                  Para-Tech, Inc.