November 2004, Issue No. 2, Thursday Edition

HOUSTON BUSINESS REVIEW

COMMERCIAL REAL ESTATE LEASES
By Roslyn Y. Bazzelle

Roslyn Y. Bazzelle is an associate with the law firm Weisblatt & Associates, Inc. and one of the Houston Business Show Contributors. Each week she examines the crucial legal issues affecting your business. For more information visit the Weisblatt & Associates, Inc. website.

Leasing a commercial space instead of purchasing a commercial property can be financially beneficial for a business owner. However, there are no standard lease agreements and you should contact your lawyer to discuss what factors would serve as a benefit or detriment to your business, and to negotiate on your behalf. Following is a list of common essential terms and negotiable aspects you should consider when entering into a commercial lease:

1. Premises – Proper description and/or exhibits depicting the leased premises which include address and/or legal description, square footage, available parking, and other amenities.

2. Rent – Depending on whether it is a “gross” or “net” lease rental amounts and calculations vary. Rent can include the following: base rent, escalations (increases over the term), utilities, taxes (ad-valorem / property), maintenance, operating expenses, and insurance. The lease should describe in detail how the rent is calculated. In connection with the taxes, you should consider requesting a right to appeal.

3. Audit – Tenant should have the right to audit the landlord’s books and records.

4. Security Deposit – If required, and whether you can use a letter of credit instead of cash. If a security deposit is required, when will it be applied and for what reason will it be applied.

5. Term – Length of the lease.

6. Renewal – Terms of renewal (method, deadline, notice requirements) and rental rate during renewal periods.

7. Representations – All representations made by tenant and landlord in connection with the leased premises. Make sure landlord represents and warrants that landlord owns title to the leased premises, that entering into the lease does not violate the rights of any third parties, and that landlord has authority to enter into the lease.

8. Quiet Enjoyment – Granting language from landlord to tenant as to the covenant of quiet enjoyment.

9. Permitted Use – Tenant’s intended use of the property (keep this as broad as possible). Check with local zoning authorities to confirm that the space is zoned sufficiently for your type of business.

10. Termination – Who may terminate, how termination occurs and what notice is required?

11. Default – What constitutes a default by landlord and by tenant and remedies for default?

12. Condemnation / Eminent Domain – What will occur if a portion or a substantial amount of the leased premises is condemned or taken by eminent domain?

13. Improvements – Modifications or fixtures to be added to the space establishing the party paying for such improvements and ownership of any such improvements after the lease term has ended.

14. Maintenance – Who will maintain the premises?

15. Assignment / Sublet – Whether the lease may be assigned / sublet to another party.

16. Mediation / Arbitration – Provision requiring mediation or arbitration as an alternative to filing a lawsuit.

FREE BUSINESS DIRECTORY LISTING WITH HOUSTONBUSINESS.COM™
By HBR staff

Have you seen the HoustonBusiness.com™ Business Directory lately? Check it out, it's filling up quick. Basic Listings are free, and businesses can be listed in multiple categories. To list your company, visit our Sign Up page now. And, make sure to email your business associates and let them know about our free Basic Listings.


PICKING A BUSINESS BROKER
By Mike Nemer

Mike Nemer is a Principal at Nemer & Associates, a BBN affiliate, and is the Houston Business Show Advisor on Business Brokers. Each week he will take you though the process of selling and buying a business and will be a frequent contributor to the Houston Business Show. For more information visit his website.

Selling your business is very emotional. The business owner has their blood, sweat and tears in the business and the thought of someone else owning their business is unsettling. A decision business owners face after deciding to sell is whether to use a business broker or not. More often than not, it will pay the business owner to call one or two and spend some time talking with them.

Even if you decide against using a broker, the experience and knowledge one gains from talking to a business broker will be beneficial. Here are some basic questions you should ask when interviewing a business broker:

1. Can you please tell me about you and your firm? Have the broker go through both the selling and buying process. A good broker will be able to outline each step for you.

2. Are you affiliated with any business brokerage associations or trade groups? A business owner is usually better served by dealing with a broker who belongs to a group or association because more brokers will then have access to their business.

3. Do you co-broker with other brokers? Find a broker who will co-broker with brokers outside of their respective associations or groups, this is the only way for you to be assured that all possible buyers are seeing your business.

4. What is my business worth? This is very sensitive issue, the best way to answer that is to buy a business evaluation.

5. How do you market my business? Listen to their marketing plan and make your decision based on how you fell about the way they present the plan to you. If they can’t market themselves, then more often or not they cannot market your business.

6. Ask them to leave you a copy of their listing agreement? It never is to early in the selling process to read the listing agreement to become familiar with the terminology.

7. Ask for references? Call both buyers and sellers that the broker has represented.

When talking to a business broker most will ask for a one your exclusive listing agreement. It is a very rare business that actually transfers ownership in less than six months. Commission rates vary depending on the value of the business, the condition of the business (financially and operationally) and whether or not you buy a third party evaluation. Some may ask for a small retainer or up-front fee, again, depending on the value of the business, the condition of the business (financially and operationally) and whether or not you buy a third party evaluation. Each firm has its own policies.

By interviewing several firms you will learn what the advantages of each are and which one you feel most comfortable dealing with. It is important that you work with an individual with whom you feel comfortable and who impresses you with their ability to sell your business.

GOOGLE WATCH
By HBR staff

The most useful information location tool on the Internet is the search engine, the most popular of which is Google. In our new Google Watch feature, we'll keep you up-to-date on the top search queries and most popular news queries on Google. Why? Because knowing what people are lookig for online can be invaluable to your web marketing program, particularly if you can find a way to logically incorporate the most-searched terms into your website.

Google Watch, Week Ending November 1, 2004

Search Queries: lunar eclipse, Halloween, pumpkin carving patterns, Jennifer Tilly, day of the dead, 2004 election, Marilyn Monroe, electoral college, daylight savings, ipod.

KEVIN PRICE TO SPEAK AT HOUSTON NETWORKING NEWS BUSINESS EXPO
By HBR staff

Kevin Price, host of the Houston Business Show and publisher of the Houston Business Review at HoustonBusiness.com™, is one of several speakers at the upcoming Houston Networking News Business Expo. This important event, taking place Tuesday, November 16 from 9 am to 5 pm at the Reliant Center at Reliant Park, will include several locally and nationally known speakers.

Speakers and topics include:

• Brian Hilliard, Motivational Speaker and Author on “Networking Like a Pro!”

• Joann Cooper, CEO, Interactive Network Connection on “Increase Your Network Through Relationships

• Jacqueline Taylor, Associate Region Director, University of Houston Small Business Development Center “Don’t Fail Because You Failed to Plan.”

• Kevin’s topic will discuss some of the short term economic projections based on the recent elections.

In addition to great seminars and reception there will also be a job and career fair. To get more information about the event email ryoder@houstonnetworkingnews.com or call 281.778.6661.

RECENT STORIES FROM DCR
Brought to you by Hold the Phone, Sales Nexus, and American Finasco.

Keep Your Employees Focused

Business owners want the most effort from employees, and there are myriad ideologies on how to increase worker productivity. Some business owners believe that workers shouldn't spend too much time away from their jobs while others insist that employees take breaks and relax every once in awhile. In recent years, some corporations have even added health clubs and weight rooms on their site. Carol Copley, a consultant with the human resources firm Murray Resources in Houston, said one of the best ways to get the most out of workers is to make sure they want to do the job. "You have to have people in the job they are meant to do," she said. "That's going to help keep them focused because they enjoy their job." Conversely, Copley said, employees who are in positions they don't like, will not get much work completed because of human tendencies. Employers stand a better chance of increasing worker productivity by placing employees where they belong. "It's going to help them focus because we tend to put off what we do not like," she said. One way business owners can reinforce a strong work ethic is by constantly recognizing good work in their employees. "Reward them, edify them," Copley said. "Acknowledge that without them, it would be very difficult to operate your business."

Make Your Contact System Work For You

Are those business cards you collected at the last networking event piling up around your office? Do you ever forget where you met someone or why you kept their card? Denise Landers, owner of Key Organization Systems, a professional organizing company in Houston, said she tells her clients to toss those plastic business card sleeves and get rid of any paper-based organizing tool for business cards. Electronic is the way to go, Landers said. "I really like electronic contact managers because no matter how you file that business card - name, business type, you can find it," Landers said. "Those plastic sleeves can't be organized. Every time you look for somebody you're paging through everything." Landers said the easiest way to manage your contact information system is to use CardScan, a small electronic scanner specifically designed for business cards. The scanner saves the information on the card and even an image of the card so that it can be thrown away. "There is really no need to save the card unless you are a graphic designer" and the image on the card will give you ideas for designs, Landers said. CardScan sorts the information on the card, which can then be transferred to any of the popular contact management systems including Microsoft Outlook, ACT!, Lotus Notes, and GoldMine.

Are Smartphones Right For Your Business?

For the smart business owner on the go, many technology enthusiasts say that smartphones (cell phone and PDA combination devices) are the new essential tool. But are those who are still attached to paper organizers ready for the new technology? And for those who are ready - with so many different phones to choose from how should they decide which ones are the most user friendly? The new smartphones offer an array of tools and applications that could be very attractive to an independent business owner. Smartphones offer traditional phone applications such as voice mail and text messaging along with access to the Internet and e-mail. While many cell phones offer Internet access, smartphones make viewing Internet sites and using e-mail more feasible because of their larger screens and more functional keyboards. Most smartphones even make it possible for users to open e-mail attachments in file formats such as jpeg, PDF, or Microsoft Office applications, including PowerPoint files. They serve as personal organizers that sync with applications such as Outlook and ACT!. Many of the newer smartphones have Bluetooth technology which allows users to connect to and download data wirelessly from personal PC's. Jon Gales, editor of MobileTracker.net, said one of the smartphone functions that business people find most attractive is their ability to connect wirelessly to a user's laptop to provide Internet access anywhere there is a phone signal. On a typical day, Gales said he uses his smartphone to browse Internet news sites and to connect his laptop to the Internet when he not connected to a traditional Internet service. The Internet connection from a smartphone "isn't really that fast" Gales said. "You're not going to be doing stuff like streaming video." But for downloading text, the connection offered by smartphones will suffice. Gales' top recommendations for smartphones are the Series 60 phones, "because they're phones first, but they do the other stuff as well." He suggests checking out the Nokia 6620 because it is simple to use. Gales said of Nokia's simplicity, "they're the market leader for a reason."

Numbers Of Women-Owned Businesses Skyrocketing

More women own their businesses in the United States today than ever before. According to statistics by the U.S. Census Bureau, between 1992 and 1997 the number of women-owned businesses increased 16 percent. The U.S. Small Business Administration guaranteed more loans this year to women-owned businesses than at any time in its 50-year history. "Women are going to come out really strong on this," said Cheryl Floyed, owner of Talica Web Design in Katy. "I absolutely think it's going to get even better." Despite the increase in women business owners, Floyed said it is still hard to start out as a female business owner. "Seven years ago, when I started, it was a rather difficult issue," Floyed said. "I think it took longer for me than it would have for a man." Despite the difficulty, Floyed worked hard to build a client base and a credible reputation in an industry dominated by men. "I have built a very good reputation so I don't face that now," she said. "I also had to work harder as a woman to build that reputation. It's not nearly as difficult as it used to be." Other women entrepreneurs say they don't see much of the difficulty that existed in years past. Christine Noble started Marnoble Computer Sales & Service in Houston in 1990. She said running a business as a woman didn't present an additional challenge. "I don't believe I ever experienced any challenges being a woman," she said. Like Floyed though, Noble had to build relationships with bankers and lenders to get her business going. "I had no money when I started my business so I had to build a relationship with banks and vendors," she said. "That was one of the biggest challenges I faced."

Make Sure Those Deductions Are Legal

When a business starts operations, some owners don't properly differentiate between personal and business expenses. "It's pretty rampant," said Ralph Rieger, a certified public accountant in Houston. A Cypress-based accountant said it's very dangerous for any type of business to misreport purchases or property. "They're taking a chance and I don't recommend it," said Michael Galvan. "But most businesses are not trying to cheat the system." Failing to report purchases and property correctly for tax purposes can carry severe penalties. "The Internal Revenue Service will disallow the deductions," Galvan said. "The business will have to pay an interest penalty." That penalty is often compounded because the IRS may audit a business for the prior three or four years. The interest compiled during that time can be quite costly. "You not only have to pay the additional tax but you have to pay the interest you owe them," Galvan said. "The interest component over a couple of years is significant." One way to avoid problems with mixing personal and business expenses is by using different accounts. "I always recommend they set up a separate bank account for the business," Galvan said. "Also have a separate credit card for the business. That alone will make bookkeeping so much easier." Another form of common misreporting is improper reporting of property for local taxes. Rieger said because of the school financing crisis, more local tax districts are becoming vigilant about businesses and property taxes. "I haven't seen Harris County do that yet, but it's coming," Rieger said. "Most small businesses haven't rendered their property correctly."

About DCR

Each week, DCR, Houston’s oldest and only locally-owned daily business newspaper, brings you the best information and the most valuable leads in order to build your business. DCR is also the place to get every one of Kevin Price’s Daily Sales Tips. Each day DCR provides the kind of stories that inspire and inform, and provide some of the most important tools necessary to build your business.

Since the 1890s, entrepreneurs have been finding leads through DCR, which can be found at Borders, Barnes & Noble, and in numerous vending boxes throughout the city. To get more information visit DCR's website.

MARSH MANTRAS TO BUILD A NETWORK AND A LIFE
By Ken Marsh

Ken Marsh, the Houston Business Show Contributor for Business Networking, provides weekly information on how to build your business. We are excited to have the assistance of Mr. Marsh, an authority on this subject and author of the book Fearless Networking , as a part of our team.

“People don’t care how much you know, until they know how much you care.”

-Zig Ziglar

The C.A.R.I.N.G. Attitude of Fearless Networkers

A chief reason for the success of fearless networkers in growing their businesses is their caring Attitude. To help you remember these six attitudes of fearless networkers I have developed an acronym for C.A.R.I.N.G.:

Fearless Networkers:

Choose to believe they can contribute to any networking situation by keeping their network in the forefront of their minds when talking with prospects Act on their desire to serve by providing referrals from their network Respond to negativity and criticism by continuing to give and serve Intently interested in their networks’ business and personal needs Nurture relationships by continually reaching out to help with issues, needs or concerns and by following through on promises made. Go give is first priority rather than go get.

This article on "The C.A.R.I.N.G. Attitude of Fearless Networkers" was written by Ken Marsh, author of the book Fearless Networking. For more on fearless networking, vist the Fearless Networking website.

AUDIO PROGRAMS BY KEVIN PRICE SOON TO BE RELEASED
By HBR Staff

Kevin Price, Host of the Houston Business Show and Editor of the Houston Business Review, is in the studios for something other than the taping of his show. He’s producing several important audio programs that will be of interest to people in any business. They are the result of the many speeches he has given and the requests that have come for more information. The programs that are scheduled for release by early Fall include "Seven Megatrends that Affect Your Business"; "How to Become Your Own Publicist"; and "Make What You Love Profitable."

Those most interested in hearing these programs will be those who have heard Mr. Price speak. Typically, when Mr. Price speaks there are significant time restraints (roughly 25 minutes at most group and organizations), these audio programs will cover much more and go far deeper in content. Kevin Price said "at 80 minutes a program we will be able to more seriously cover these topics." Mr. Price is an award winning author and speaker and has twice been published in Vital Speeches of the Day. The programs will be very affordable. The means in which they are available will be announced closer to their release. If you are interested in getting more information please email kprice61@aol.com and put "audio program" in the subject section.

IN THE MEDIA ROOM

• Eagle Broadband Names New CFO (November 9, 2004)
• Susan Love Fitts Communications Wins Triple Award (November 8, 2004)
• BJ Services Selects AT&T For $7.2 Million Contract (October 27, 2004)
• Prudential Gary Greene At Latino Festival (October 26, 2004)
• Prudential Gary Greene Announces Merger (October 25, 2004)
• The Driving Force Behind condolivinghouston.com (October 25, 2004)

To submit your release to us, just send us an email with the completed, ready-to-publish press release at press.releases@houstonbusiness.com. If it meets our editorial guidelines (no sexually-oriented businesses) we'll post your release to our site in the Media Room section of our site. You can put a link on your site back to your press release on ours and increase your presence, credibility, and, most importantly, get your message out to the public.

AFFORDABLE HEALTH INSURANCE?

Who says you can’t afford health insurance? Truth is, you can’t afford to not have health insurance. With measures for cost containment that have been implemented, today health insurance is more affordable than at has been at times in the past. Contact the Benefits Division and ask for information on how to offer health insurance through your business at no cost to the employer, how to reduce your tax burden through your health insurance, or inquire about the most affordable and convenient ways for the unemployed to get coverage (hint: it isn’t through COBRA). Call 713.984.2431 and ask for Stacy to request more information.

ON FUTURE SHOWS AND NEWSLETTERS

Coming up on future shows and in future newsletters:

Television Campaign to Begin Soon. Black Tie Limousine Service, Condo Living Houston, and HoustonJobs.com are joining HoustonBusiness.com in ad campaign that will begin on MSNBC. This program will provide, web, radio, newsletter and TV promotion for one low cost. For more information on your business can take advertise with HoustonBusiness.com, 713.984.0235.

Read The Next Edition For Other Houston Business ShowAdvisors. Angela Moretti on business coaching, Veronica Jeans and Gavin Zietsman of All Cash Flow Solutions on managing your financial resources, Richard Sonnier of Nimble Services on IT, and Kevin Moore of C. Kevin Moore & Associates on your CPA questions.

On The Houston Business Show. Ken Marsh, author of Fearless Networking, will be co-hosting for Aubrey Theode this week. Also hear Angela Moretti on coaching and Roslyn Bazzell of Weisblatt & Associates on Texas corporate entities.

NONE OF THE OPINIONS EXPRESSED HEREIN ARE THOSE OF HOUSTONBUSINESS.COM™, THE HOUSTON BUSINESS SHOW, THE HOUSTON BUSINESS REVIEW, OR ANY OTHER FIRM OR COMPANY REPRESENTED OR REFERENCED HEREIN. FOR ADVICE OR OPINION, WE SUGGEST YOU CONTACT A QUALIFIED PROFESSIONAL OF YOUR OWN CHOOSING.