In closing, rehabbing houses can offer a huge return, but also be a lot of work. You might make money, you might loose money. I offer a Mastery Fast Track Program for serious investors that offer a full rehabbing system and unlimited support throughout the process. You will more than make up for the cost with the money you save on the very first rehab. It’s critical to have a highly experienced partner on your side that can walk you through the process, that you can lean on anytime.
It’s also important to see how the company uses that cash. Digging into the cash flow examples to find out where the money’s going can shed light on management’s strategy and give you additional insight into the company’s future. Is it building aggressively for the future by opening new stores or building new manufacturing facilities? Is it buying other firms, paying off debt, building up cash reserves, buying back stock, or paying dividends?
When calculating P&L, one needs to ensure they are doing it in correspondence with the fiscal year. The fiscal year for a P&L is not determined by a calendar year, or by the lease year, but it can be. However, doing the P&L by the latter usually results in misleading information. Another element to consider is Capital. If a cost is capitalized then the amount is depreciated and spread over a period of time instead of being reflected on the P&L of the first fiscal year. In this way the P&L can, often times, reflect a lower cost for the year than the Cash Flow.
If you’re buying a finished item for resale, this is relatively easy. It’s trickier if you have to calculate all the factors, such as labour, that go into manufacturing a product. .
Different countries charge different capital gains tax on sold property. In Spain, a foreign seller may incur up to a 35% capital gains tax when selling a property for profit. Other countries, such as Turkey, do not charge this tax as long as the property has been in the seller’s name for at least four years.
Develop a realistic revenue model that you can support through your operations and sales plan. If you have to build a manufacturing facility or even outsource manufacturing, it may take some time before your products are ready for sale. If you are selling into someone else’s manufactured product, understand how they buy. You may have to wait an entire cycle before you are able to sell them one product – that could be 18 months.
Make no mistake about it, the only reason why franchisees are about twice as successful as independent start-ups, is that they have a clear and proven Business Plan. Their plan contains all the elements that you must know before you begin your journey on the road to business ownership.
Consider non-cash intensive payment options. Have you ever tried bartering? Make sure you are using business credit cards that award travel points to minimize cash expenditures on future business trips.