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Buying or Selling the NJ Business

By |2021-01-26T20:22:12-05:00January 26th, 2021|

ON BUYING OR SELLING THE NJ BUSINESS:

 If you are buying or starting a business in N.J., there are some things that you should be aware of that may not be applicable in other states or other regions of the country.  And if you are selling a business, there are other issues that you need to acquaint yourself with.

  1.  First, New Jersey  landlords are notoriously greedy; most of them think that they are doing you a favor by renting to you, when you are of course paying them.  So if you are a buyer, always insist that the contract of purchase and sale be contingent upon getting a lease that is acceptable.  I had one deal die because the landlord wanted to raise the rent fifty percent per year for the buyer of the business.  It destroyed the profitability of the business and of course the deal.
  2. Second, the N.J. Department of Environmental Protection has a reputation for being one of the toughest in the country.  If you are buying or starting a business in N.J. where environmental issues could be an issue, be sure to retain an attorney who is expert in this area of the law IN NEW JERSEY.
  3. Third, even though you will have an outside accountant, you yourself should become familiar with the basics of N.J. tax law, especially as it relates to what types of returns your business needs to file, and the filing dates.  State tax forms that you should become familiar with are:  CBT – 100 or CBT – 100S, if you are a corporation, NJ 1065 if you are a partnership, NJ 927 and WR-30 if you have payroll, and ST 50 if sales taxes apply to your business.  There are many other taxes and forms that relate to specific types of businesses.
  4.  Fourth, if you are buying or selling the NJ business, be aware of the bulk sales law and the potential tax consequences.  I have addressed this issue in a previous blog.
  5. Fifth, if you are woman or a minority, the State of N.J. has a number of set aside programs whereby preferential treatment as regards contract letting is given to businesses that are more than 50% owned by a woman or minority.  You can obtain information about these programs by googling the topic.
  6. Sixth, you should visit the website www. nj.gov/njbusiness/starting.  It contains a wealth of information concerning topics that are of concern to the novice N.J. business owner.

Your Guide to Buying or Starting a Business in New Jersey

By |2021-01-10T14:02:17-05:00January 10th, 2021|

ON BUYING OR STARTING A NJ BUSINESS:

If you are buying or starting a business in New Jersey, there are some things that you should be aware of that may not be applicable in other states or other regions of the country. And if you are selling a business, there are other issues that you need to acquaint yourself with.

  1. First, New Jersey landlords are notoriously greedy; most of them think that they are doing you a favor by renting to you, when you are of course paying them. So if you are a buyer, always insist that the contract of purchase and sale be contingent upon getting a lease that is acceptable. I had one deal die because the landlord wanted to raise the rent fifty percent per year for the buyer of the business. It destroyed the profitability of the business and of course the deal.
  2. Second, the N.J. Department of Environmental Protection has a reputation for being one of the toughest in the country.  If you are buying or starting a business in N.J. where environmental issues could be an issue, be sure to retain an attorney who is expert in this area of the law IN NEW JERSEY.
  3. Third, even though you will have an outside accountant, you yourself should become familiar with the basics of N.J. tax law, especially as it relates to what types of returns your business needs to file, and the filing dates.  State tax forms that you should become familiar with are: CBT – 100 or CBT – 100S, if you are a corporation, NJ 1065 if you are a partnership, NJ 927 and WR-30 if you have payroll, and ST 50 if sales taxes apply to your business.  There are many other taxes and forms that relate to specific types of businesses.
  4. Fourth, if you are buying a business in N.J., be aware of the bulk sales law and the potential tax consequences.  I have addressed this issue in a previous blog.
  5. Fifth, if you are woman or a minority, the State of N.J. has a number of set aside programs whereby preferential treatment as regards contract letting is given to businesses that are more than 50% owned by a woman or minority.  You can obtain information about these programs by googling the topic.
  6. Sixth, you should visit the website www. nj.gov/njbusiness/starting.  It contains a wealth of information concerning topics that are of concern to the novice N.J. business owner.

Smart Steps to Buying or Starting a Business in NJ

By |2021-01-05T10:12:33-05:00January 5th, 2021|

MORE ON BUYING OR STARTING A BUSINESS:

There was significant reader interest in the article entitled “To Buy or To Start a Business.”  Therefore, I would like to elaborate a bit more fully on one of the key concepts in the article; namely, the difficulty of building a customer base and how this relates to the personality of the promoter.

As I said in the article, most new entrepreneurs who start a business vastly underrate the difficulty of building a loyal and stable customer base. This is usually due to inexperience or, sometimes, they believe that there is a larger market for their product or service than there really is. And sometimes, they believe that their product or service is more unique than it is, or that it fills a need that is not really there. 

Building a Customer Base

Regardless, the new entrepreneur should anticipate that it will take at least three times as long to build a customer base than he or she would like, and that it will probably cost three times the anticipated investment in promotion, advertising and marketing to build a profitable and stable following

Continuum Scoring of a NJ Business

Most businesses can be thought of as being on a continuum of say “one” to “ten,” whereby a business with a score of one,  in order to succeed, requires little or no interaction on the part of the owner with customers. Examples of these type of businesses would include gas stations, dry cleaners and liquor stores; no one cares who they buy a tank of gas from or a six pack of beer. They do not require personal connections or “networking”, and in many cases are location sensitive. Likewise, a business with a score of ten requires constant interaction on the part of the owner with clients and customers; who the owner is and what he or she is about as a person is extremely important. Examples of these types of businesses include most professional practices, childcare centers, and insurance agencies.

As a budding entrepreneur, you need to think long and hard as to where your business falls on this continuum, and how your personality and work ethic fits into the scheme of things. If you do not like networking, are not willing to reach out to college classmates from 20 years ago to buy from you, and do not have an extensive network of business and professional connections, you are probably better off buying or starting a business with a low score on the continuum. Alternatively, if you like networking and already have an extensive network of professional and social connections, you would probably do well in a business with a score that is high on the continuum. Think long and hard, and be objective.

 

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