Shooting the War

FANS
All kinds of materials were used to make the hand fans so popular with our grandmothers, and many of them are very pretty things, well worth repairing.
Fans were made of ostrich feathers set in ivory or ebony; or of bone, ivory, or ebony, or of paper and silk, mother of pearl, or lace. Sonic fans have a ribbon tie running through the sticks which controls the spread, and this ribbon may be torn or very dirty. It is simple to replace the ribbon, but it will probably be threaded in such a way that the fan may be opened and shut easily without pulling or looping. Take a careful note, when removing the old ribbon, of the way the threading is done so that you can put it together properly To clean fans made of ivory, bone, tortoiseshell, ebony etc. treat as described under Ivory and Tortoiseshell.
Broken sticks present a problem if they are made of these materials, and very careful sticking with epoxy resin is the best way if you have all the pieces. A strengthening piece may be added, either of matching material if available or of clear plastic. Replace broken wooden sticks by making a careful copy. Remove the D-shaped ring at the bottom which holds the sticks together if a whole new stick is to be inserted. The straight part of the 1) is a pin through the sticks, and this will have to be taken out (see Fig. 16). If it is riveted through, file back the sides of the rivet at one end until the pin slips out. Put die new stick in its correct place. The pin should be hammered a little to lengthen it so that it can be riveted over when replaced.
Clean fans made of fabric by brushing with Fuller’s Earth. Immersion in any kind of liquid is usually inadvisable because there will be glue about which can all too easily be loosened. Painted colours on fans may not be fast and will run, or be lifted, so take care. Remove spots carefully with dry cleaning fluids such as carbon tetrachloride, or blot out grease spots as described in the section on Needlework, remembering once again that heat will melt any glue.
Mend torn paper fans as described in the section on Books, or put in whole new pieces of paper as detailed in the section on Prints and Watercolours, and revarnish with Winsor & Newton’s Water Colour Varnish if necessary. Sometimes a heavier varnish will have to be used, and Picture Mastic Varnish or Copal will match this.
Generally speaking, fans are delicate objects which need a lot of care and delicate work, as each one must be treated on its merits according to the material from which it is made.

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The development of the rifle between the issue of the Baker t6 Rifle regiments, and the equipment of the whole of the infantry with the Enfield, is an interesting story myott & sons chamber pot ironstone china. It will be remembered that Ezekiel Baker’s design incorporating a rifling with only a slight twist, together with an easy-fitting and patch-enclosed bullet, had been criticized by Colonel Beaufoy makers names of antique pottery england.
Beaufoy’s theories, which are given in his Schloppetaria of 1808, were widely supported during the period of the Napoleonic wars, and had a considerable influence on the design of the sporting rifles which were manufactured after the end of hostilities drop leaf table with spiral turned legs.
Baker, as has already been said, had designed the weapon which he regarded as best suited to a military purpose; but he had never claimed any great accuracy antique clerk desks. In his Observations he says:
‘ I have- found two hundred yards the greatest range I could fire at to any certainty commode art deco. At three hundred yards I have fired very well at times when the wind has been calm jules leleu display cabinet. At four and five hundred yards I have frequently fired, and have sometimes struck the object; though, having aimed as nearly as possible at the same point, I have found it to vary very much from the object intended whereas at two hundred yards I could have made sure of the point, or thereabouts antique caquetoire chair.’
To Colonel Henry Beaufoy the acceptance of such a standard of accuracy was heresy lenci masks. He maintained that the first requirement in a rifle was accuracy, and that other considerations must be subordinated to this end wash stands for center bowl. No gunsmith disputed the fact that if one increased the twist of the rifling from Baker’s quarter turn to, say, a full turn in the same length of barrel, the gain in accuracy would be considerable antique drawleaf table. ToBeaufoy this proved the case for increased twist; and for a firearm intended for target or competition shooting it would be difficult to say he was wrong czechoslovakian porcelain. But in the case of a rifle intended for the rough business of war, or for the sometimes almost equally dangerous pastime of hunting big game, there were other considerations most expensive antique glass vase.
If the bullet were to be made to spin faster (which was the purpose of a greater twist), it must be a tighter fit in order to grip the grooves of the rifling antique rotating dumbwaiter. This ‘would make it harder, and therefore slower, to load, and the loading of the Baker rifle was already a much slower process than that of a smoothbore musket brass escutcheons shelves. Further, if the explosion of the powder gave the bullet too hard a ‘Punch’, there was a danger that it might not settle into the grooves, and thus strip the rifling paw pottery small candlestick. The charge, therefore, had to be reduced italian immigrant porcelain figures mantelpiece flatbacks. But this gave a lower muzzle velocity, and consequently entailed a greater elevation of the muzzle for a given range victorian kidney shaped dressing table with glass top. The flat trajectory which Ezekiel Baker thought so necessary for troops in action was thus lost 18th century knife boxes.
It is only just to Beaufoy to say that he finally admitted in his own book that the type of rifle he advocated was only suitable for target shooting 19th century mechanical desks. He had found by experiment that the accuracy of the full twist rifle depended on the barrel being cleaned -after every shot, and he was too much -of a soldier not to appreciate that this would be quite impossible in action curule sette federal period antique. Nevertheless Beaufoy’s views had gained such wide acceptance that they governed rifle design for some years, and their author’s ultimate proviso as to their limitations was either ignored or not appreciated edwardian period furniture construction.
The theory of a considerable twist in the rifling was, of course, fundamentally sound 20th century dining table england. The difficulty in putting the theory into practice, however, lay in the shape of 20th century dining table england. the bullet ?????? galles. A round bullet had no depth of contact with the rifling, and therefore even with the tightest fit there was little to hold it to the grooves 1800’s wood dresser with tulip engraving. british meubles.
The advent of the percussion lock increased ‘the difficulties of the gunmakers, for the more rapid explosion increased the velocity of the bullet and the consequent tendency to override or* strip the lands of the rifling regency rent table polygonal. Since a tighter-fitting ball did not provide a solution, the charge had to be decreased again old buen retiro porcelain. In point of fact the charge had to be made so small that the muzzle velocity dropped to the extent that a rifle of the normal bore lost most of its penetration and stopping power fall front timber writing desk. For sporting rifles which were to be used against big game, the gunmakers tried to make up for this loss in velocity by increasing the herculaneum stoneware for sale.size of the bore, and therefore the bullet, so that the actual weight of the ball should make up for its loss in speed tureen hague or amstel. The result was a clumsy and inefficient weapon; and rifles of this type had far less power of penetration than a smooth-bore musket of similar bore greek designs and motifs. It is hardly surprising that the idea of re-equipping the Army with rifles aroused little enthusiasm 1930’s austrian furniture.
Eventually, of course, the attention of designers turned to the bullet in an endeavour to find an answer to the dilemma sarcophagus chests andre-charles boulle. The spherical shape was retained, but different types of projections were formed on the surface which were designed to fit into the grooves of the rifling and so force the bullet to follow its intended spiral path the most common colours of egypt. The most popular of these was the two-groove rifling with a belted bullet which had been adopted for the Brunswick rifle looking for 4 feet wide drop leaf table. The popularity of this system shows that it was at least reasonably successful; but as applied to the Brunswick it was a dismal failure arabisque furniture in ny. Captain Berners, who is credited with the design, must have intended to adapt a proved sporting rifle to military use antique stretcher or refrectory tables. Some writers have said that Berners’ original design incorporated an oval bore; and it may be that the Brunswick as finally accepted was a modified form for which Lovell was responsible n hall norfolk.
The next development, to overcome air resistance and obtain greater penetration with the same charge, was a bullet with a pointed end antique metal table with leaves. This achieved the desired result, but with its comparatively low velocity it had little stopping power; and was-of small use against, for instance, the charge of a tiger small-footed bowls raozhou.
In an endeavour to combine penetration with stopping power experiments were carried out with explosive bullets antique furniture empire chest of drawers. These were of pointed or egg shape, and the main function of the charge in the bullet was to open out its nose on impact and give the same effect as a hit with a heavy round bullet 19th century english george pedestal sideboard. Such a bullet was, in fact, proposed for military purposes by a Captain Norton in 1824; but it was rejected somewhat indignantly by a Board of officers, one of whose reasons was that such a weapon was unfitted for civilized warfare oak revival chair “carved seat”. (It is unlikely, alas, that such a criticism could be levelled against Captain Norton’s bullet to-day giltwood.)
Trials with explosive bullets were carried a stage further in the remarkable series of experiments which were conducted in India by the famous General Jacob, who raised the Scinde Horse and who is commemorated by the town which was named after him, Jacobabad patek philippe, 1930s, rectangular, hinged back.
Jacob first tried to improve the shooting of the Brunswick rifle, and found that a rifling with four grooves instead of two, and a bullet with two crossed belts to fit them, -gave much better results austrian empire furniture style. The East India Company, however, refused to adopt his suggestion that the Brunswick rifles of the Company’s army should be modified accordingly art deco hamilton donald deskey mahogany cabinet.
Jacob, nevertheless, continued his experiments with the bullet to try and obtain even more satisfactory results classical architectural decorative motifs. In order-to get a better grip on the rifling he decided to use an oval ball with projections, instead of a round one french drop front desk. It was well appreciated by gunsmiths at this period that the greater the surface of a bullet which was in contact with the rifling the better the grip would be; and that in fact a long bullet with parallel sides would be infinitely better from this point of view than a round one antique two tier drop leaf table. But the difficulty was that the greater the contact the harder it would be to load the rifle, and it was considered that after a barrel had become fouled with firing it would be impracticable to push down from the muzzle any bullet other than a round one antique silver apostle spoons. Jacob, however, found his oval bullets satisfactory enough to go a stage further; and he produced a fairly easy-fitting cylindrical bullet with a pointed nose and four longitudinal strips to grip the four grooves of his rifling north west antique dresser. His next step was to fit this bullet with an explosive head antique sofa gate-leg table. This so-called ‘rifle shell’ was very popular with sportsmen, though it was rather inclined to explode on impact antique porcelain food warmer. However, the further development of the rifle shell had no influence on military ammunition antique rococo silver candlesticks.
Jacob also had rifles made to his own design plate art nouveau bright colors. They had short barrels of about twenty-four inches, a calibre of ‘577 or -524 inches, rifling of four deep grooves, and one complete turn in thirty inches antiques. None of the rifles was ever officially adopted, but they were used quite extensively in the Indian Army; Jacob’s own regiment, the Scinde Horse, being armed completely with them 18th century porcelain.
The next method of obtaining a grip on the rifling to become popular was by expanding the bullet with the force of the exploding charge are william and mary chest of drawers rare?. The first rifle to be a general issue to the Army embodied this principle 18th century desserts. Although of basically French design, the original inventor of a bullet of this type appears to have been the well-known Newcastle upon Tyne, and later Birmingham and London, gunsmith, W dining room table made from huge clock. Greener italian,furniture,maker,address. Greener’s bullet was oval with a flat base, from which extended a tapered cavity french bronze porcelain and silver inlaid clocks. Into the cavity was inserted a tapered plug, of rather too wide a diameter to be pushed right home escritoire 19th century stinkwood. The bottom of the plug terminated in a flat disc of the same chippendale knife boxes octagon.diameter as the bullet 18th century mass produced tableware. The explosion of the charge drove the plug forward into the cavity, thus expanding the bullet 1930 british chairs. Greener’s bullet was given an official trial in 1836, but was rejected on the odd ground that it was a ‘compound bullet’ large frosted glass reproductions nudes. In 1857, some years after the Government had accepted a rifle based on this very principle, belated recognition was given to Greener’s invention, and in 1857 he was granted the sum of a thousand pounds ‘for the first public suggestion of the principle of expansion, commonly called the Minie’ principle, for bullets in 1836′ vintage three leg table base.
Some years before the period when Greener was trying to get his bullet accepted, Captain Delvigne of the French Army was experimenting on rather cruder lines art nouveau austrian artists candlesticks. Delvigne’s method was to have a chamber of smaller diameter than the barrel, against which the bullet came to rest, and was then expanded at the base by repeated ‘blows from a heavy ram- rod makers of silver table ware in late 1800’s. A bullet so treated was naturally too unsymmetrical to be very accurate in flight painted sideboard pine maryland. In place of this rough treatment, therefore, it was subsequently enclosed in a greased patch, and a tight-fitting wooden plug was inserted between bullet and chamber 1954 antique floor standing ashtrays. Delvigne’s bullet achieved a reputation in a most spectacular fashion in the Algerian campaign-of 1938 french art deco ceramic marks crackle glaze. A battalion of the Chasseurs d’Afrique was equipped by the Duke of Orleans with Delvigne’s rifle and ammunition for service in Algeria under his command antique tables a gibier. On one occasion, when he was out on a reconnaissance, the Duke was annoyed by the provocative gestures of an Arab sheikh some 65o yards away recueil de decorations interieurs. He called out to his escort that he renaissance goldsmith process. would give five francs to any soldier who could shoot the Arab royall naples factory. A Chasseur armed with the Delvigne rifle promptly stepped forward and shot the irritating Arab through the heart art deco antique dresser.
Following another attempt by Colonel Thouvenin to make the bullet expand by hitting it, Colonel Mini6, an instructor at the School of Vincennes, arrived at much the same solution as Greener 19th century porcelain religious figural. Mini6 used a pointed bullet with a hollow base inlaiditalianoccassionaltable. Fitting into this hollow was an iron cup, which was driven forward by the explosion, so expanding the ’skirt’ of the bullet walnut side tables and lowboys. This rifle was immediately adopted by the French Army; and shortly afterwards the British Government purchased the right to use the invention for 42o,000 antique french empire.
The new rifle which was thus introduced into the British Army was entitled the ‘Rifle Musket, Pattern 1851′ empire console pier table. It had a 39-inch barrel, a calibre of ‘702 inch, and a rifling with four grooves which made a complete turn in six feet six inches berkey gay antique furniture. This was a much slighter twist than the Brunswick had rh vase austria. The rifle was sighted up to woo yards brannam pottery. A modification for ‘Sea Service’ was produced by the novel method ‘of rifling with three grooves the ‘768 calibre smooth-bore Pattern 1842 musket italian brass inlay sideboard.
As has already been said, the Mini6 was the first rifle to be adopted for the whole Army, though in point of fact it was superseded by the Enfield long before all units had received it antique bentwood rocking chair. It was an infinitely better arm than the Brunswick, but it was not entirely satisfactory antique italian inlaid buffet. It was first used on active service in the Kaffir war of 1846-52, and all the infantry battalions which left England in 1854 for the Crimea, except those in the 4th Division, were equipped with it vintage chinese porcelain with two swords marked.
The Mini6 rifle had only a short life, as the Enfield, which succeeded it, passed its trials in 1853, and production started immediately 1850s gateleg with butterfly leaf. The Enfield was far in advance of any previous firearms issued to the British Army and gave extremely good service davenport desk mechanism. The barrel was thirty-nine inches in length, the bore ‘577 inch, and the rifling consisted of three shallow grooves which made a full turn in six feet six inches stripped pine washstands kent. Sighting was UP to goo yards antique 5 legged table. There were various modifications of this standard type of Enfield theodore haviland limoges, france pre world war ii solid white body. Carbines were made for the cavalry and other mounted units, and serjeants seem to have carried a rifle with a 33-inch barrel antique drum shaped table. This short barrel had five grooves instead of three, and an increased twist in the rifling which completed a turn in four feet chamber pot and bed table. The additional grooves and greater degree of twist were an improvement, and this walnut marble slab dining. type of barrel was subsequently adopted for all Enfield firearms raoul lachenal france egyptian blue vase. The bullet was hollow based, and later fitted with a tapered boxwood plug prudent francois mallard new york. The boxwood plug was eventually replaced by one of baked clay german buffet furniture.
The production of the Enfield was rather peculiar italy flowers raised antique ceramics. Lord Hardinge, who was then Master-General of the Ordnance, invited the leading gunsmiths of the country to submit samples of their own rifles walnut marble slab dining. The best features of these rifles were then embodied in the new design luxury antique items.
Issue of the Enfield to the troops started before the end of the Crimean war, and it was first used on active service before the fortress of Sebastopol 1800’s reproduction dining room tables.
The Enfield is probably best remembered, unfortunately, as the rifle which was the immediate cause of the Indian Mutiny antique oak gateleg tables. The cartridge was still opened by biting off the end with the teeth; and the rumour was spread that the cartridge was smeared with a grease made from cow’s, fat and the lard of pigs 17th century tea tray. As cows are sacred to Hindus, and pigs are anathema to Mohammedans, the story, if true, would have serious effects on the religious status of soldiers of both classes of the community drapery designs for dressing table. No convincing denial was forthcoming; and, on the other hand, there appeared to have been some evidence, whether true or not, that the allegations were not unfounded silver plated corinthian hexagonal base three light candelabra. The results were disastrous reproduction rococo etagere.
Peculiarly enough, the Enfield rifle was issued to the Company’s army before the Queen’s troops had all received it reproduction mochaware. The result was that when the Mutiny started, although the new rifle was already in the possession of some of the mutinous regiments of the Bengal Army, many of the British regiments, including the 32nd Foot (later the ist Battalion of The Duke of Cornwall’s Light Infantry) who defended Lucknow, still had the smooth-bore muskets of Pattern 184′ - Later arrivals in the country all had the Enfield; and the following extract from the Indian Mutiny Journal of Private Charles Wickins of the ,90th Light Infantry shows the effect of the new weapon:
`We marched on fora few miles, when the enemy again began to show themselves in force on oup right meiji clock. We opened fire on them and, our Enfields being well elevated, we made them move at a distance of 12 hundred yards french oak, “barley twist” chest of drawers.’
Enfield rifles, together with other British rifled and smoothbore firearms, were imported in large quantities by both sides in the American Civil War of i $ 6 z-6$ italian creamware. The Confederate States alone bought 70,980 of the long-barrelled rifles, as well as a number of the short-barrelled variety, and also Enfield carbines, and some specially made officers’ weapons known as `Jeff Davis’ Enfields with checkered stocks and nipple protectors secured by chains mid century decor mahogany rectangle divided tray. In addition’, the armouries of the Confederacy made some copies of Enfields http:  antcollectors.com . One of these, first made at Arkadelphia in Arkansas and later at Tyler in Texas, had a calibre Of ‘54 inch and a barrel only twenty-seven inches long tudor rose design waterfall furniture. This weapon and a copy of an Austrian rifle of similar calibre were collectively known as Hill rifles, and some were marked ‘Hill Rifle Tyler C antique cutlery urns.S burr maple table.’, and others `Texas Rifle Tyler’ inurl:antcollectors.com . Closer copies of Enfield firearms were made by Cook & Brothers of New Orleans art deco upholstery. There were two of these: the 33-inch barrel rifle and the cavalry carbine japanned cabinets.
The latter had a 2 i-inch barrel and a nipple protector attached to the trigger guard by a chain chinese qing porcelains. When New Orleans was threatened by the advance of the Union forces the factory was moved to Athens in Georgia, and some of the arms are marked ‘Athens Armory’ drop leaf carved leg table with drawer. After the move to Athens the head of the firm, F great exhibition of 1851 aesthetic. W antique gateleg table with turned legs. C japanned antique chest-how to strip lacquer. Cook, raised an infantry battalion himself and was killed in action in 1864 drop leaf gateleg coffee table.
Though an excellent weapon for its period the Enfield was found to vary considerably in regard to the performance of individual rifles maryland antique sideboard. The difference was due to slight inaccuracies in the machining of the duncan phyfe drop leaf table.parts shu fu bowls. To try and find 19 century mahogany gateleg table. a remedy, Lord Hardinge, the Commander-in-Chief, in 1854 invited Sir Joseph Whitworth to carry out experiments with bullets and rifling king charles silver flatware. Whitworth was not a gunmaker, but he was noted as an engineer and for his work in precision machining and accurate measurement site:antcollectors.com. It appears that the first approach to Whitworth was made in the hope that he would devise machinery to solve the problem antique spanish talavera. However, Whitworth succeeded in persuading Lord Hardinge that a far more basic investigation was first required antique wood dressing screen ebony and ivory inlay.
In order to enable him to undertake his experiments, a Soo yards’ range was built at Whitworth’s Manchester home, and paid for by the Government prices for antique gateleg table. Since Whitworth had little practical knowledge of firearms, a well-known gunsmith, Westley Richards, was appointed as his assistant, and two Army officers were made available to help in the range tests and to advise on the military requirements “antique meissen porcelain”.
Two years of experiments resulted in the production of a rifle of Whitworth’s own design, which was tested against the Enfield in April 18 57 at the Hythe School of Musketry art deco marquetry plaques uk.
The Whitworth rifle was certainly of unconventional design antique divans. In order to reduce air resistance there was a considerable reduction of the bore; from the ‘577 inch of the Enfield, to a calibre of only -45o inch antique 54 empire table. The most remarkable feature, however, was the rifling late 1800’s dining table european. Instead of the usual grooves the barrel had a hexagonal bore with a twist which increased towards the muzzle modern dressing table designs. The first turn was completed in twenty inches antique spindle leg drop leaf side table. The bullet was of a similar hexagonal shape to the barrel, and was made of a specially hardened alloy rare antique drop leaf dining tables. It was impossible, therefore, for the bullet to override the rifling chinese influence to rococo.
The trial at Hythe resulted in an outstanding success for the Whitworth meissen, four continents. Sir J marcel goupy designs. E lotto design turkish carpet. Tennent reported the shooting of the competing rifles in his The Story of
the Guns, of 1864 rococo silver candlestick. He says:
‘The success [of the Whitworth> was surprising; in range and precision it excelled the Government [Enfield> musket three to one 17th century porcelain figurine. Up to that time the best figure of merit obtained by any rifle at home or abroad was twenty-seven; that is to say, the best shooting had given an average of shots within a circle of twenty-seven inches mean radius, at five hundred yards distance; but the Whitworth lodged an average of shots within a mean radius of four inches and a half from the same distance; thus obtaining a figure of merit of four and, one-half paw pottery small candlestick. At eight hundred yards it superiority was as one to four, a proportion which it maintained at one thousand yards and upwards russian neoclassical secretaire bookcase. At fourteen hundred, yards the Enfield shot so wildly that the record ceased to be kept; and at eighteen hundred yards the trials with it ceased altogether, whilst the Whitworth continued to exhibit its accuracy as before red lion furniture barker brothers los angeles.’
Nevertheless, with all the Whitworth’s remarkable accuracy it suffered from one very serious defect 17th century fashion in europ. Much fouling was accumulated in the recesses of the hexagon bore, which even a metal scraper failed to remove theodore haviland cherry plate. For this reason it was never adopted as a Service firearm; though the Rifle Brigade had it for a short time georgian telescopic silver candlestick.
As a match-shooting rifle the Whitworth was, naturally, a great success art nouveau origins. Its most famous appearance was on the occasion of the first meeting held by the then new National Rifle Association at Wimbledon in 1860 19th century folding breakfast table. The meeting was opened by Queen Victoria, and after the Address and her reply, the Queen went to a pavilion to fire the opening shot holophane verlys. Here there was a Whitworth rifle mounted on a rest and sighted on to a target 400 yards away french art carved inlay buffet. The Queen pulled a silken cord attached to the trigger and the bullet hit the target within one inch of the dead centre italy flowers raised antique ceramics. The iron plate with the mark of the Queen’s bullet on it has been retained at Bisley in commemoration of the event chelsea moons porcelain.
The Whitworths saw their share of active service, for a number were purchased by the Confederate States of America from the Whitworth Rifle Company of Manchester iranian brass oval trays. Presumably some of the hexagonal bullets were supplied as well, and perhaps owing to the Federal blockade it was impossible to replenish them what decade era antique inlaid diamond harlequin. At any rate the Southern troops seem to have used ordinary cylindrical hollow-based bullets without appreciable loss of accuracy 2009 chinese porcelain antique. The Union Generals Sedgwick and Lytle are said to have been killed by Confederate marksmen using Whitworths regency occasional table.
A very unusual rifle, the Lancaster, was adopted for limited use in the Army in 1855 1940’s english dresser   table clock. This was derived from a sporting rifle made by Charles William Lancaster of 151 New Bond Street in London rousseau shagreen. Its most striking feature was the complete absence of the normal grooves to provide the rifling secretaire desk antique. Instead Lancaster used a smooth barrel of slightly oval bore; or, to look at it in another way, two round and very wide grooves opposite each other antique dressing table with mirror and knee hole. The bullet was cylindrical with a conical nose and was made of soft lead meissen, clock, marcolini. The explosion of the charge forced this soft bullet to take up the shape of the rifling, giving a very close fit dark silver candelabra.
As a military weapon, the Lancaster was first issued to the ist Battalion The Rifle Brigade for experiment, and was used on active service in the Kaffir war late 1800’s dining table european. It was ultimately adopted as the firearm of the Corps of Sappers and Miners antiques trends 2009. The final Army version of the Lancaster had a A-inch barrel with the same bore of ‘S77 inch as the Enfield 1850s gateleg with butterfly leaf. The oval bore had a twist which increased towards the muzzle, and completed a full turn in six feet six inches pillars on casters. To avoid complications in ammunition supply it was used with the Enfield cartridge leleu furniture.

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Presenting the Plan d3sf4wr6gk

Joe had created a business plan for a new gourmet mustard venture. He had spent a great deal of time developing the business initially and very little time putting together a business plan itself. It took Joe a good long while to learn the importance of the look of the plan. It almost cost him everything.
Joe’s plan was a visual mess. The margins were only half an inch wide. Joe had learned in school that wide margins on term papers meant you didn’t have anything to say. In the world of academia, the narrower the margins, the more words per page. More words per page meant more content, which to his professors meant that more work had gone into the effort. And by this measure (instead of an actual reading in some cases) a better grade was received. And so, consequently, Joe felt that with narrow margins and a cramped style the brilliance of his plan would be revealed.
Instead, the opposite was true. The first venture capitalist to receive the plan took one look at the tightly spaced and crowded first page and set the whole thing aside. All Joe received was a letter saying the investment didn’t fit their profile. He never learned it was the presentation of the plan itself that didn’t fit their standards.

The second venture capitalist to receive the plan was a stickler for consistency, neatness, and grammar. Joe’s plan was inconsistent in the formatting of tables, charts, and section headings. It was stapled together in a fairly sloppy fashion. Joe had not bothered to spell-check. By the time the second venture capitalist saw his second spelling error, he had had enough. The whole plan was set aside, and Joe again received a letter saying the investment did not fit their profile.
Joe was perplexed. He had done a great deal of work putting everything in place. He was ready to start shipping cases and cases of the product. He felt like he wasn’t getting a straight answer. He needed to know why the venture guys didn’t relish his gourmet mustard.
One of Joe’s friends offered to hook him up with a venture capitalist who would give him a straight and honest appraisal of the plan. Joe jumped at the offer and overnighted the plan that afternoon,
In three days, Joe met with Jessica, a well-dressed, no-nonsense professional investor. Jessica got right to the point. Joe’s plan was a disaster. It was difficult to read because it was too cramped, without any relieving white space. It was a jumble of type styles and inconsistent formats. The binding with off-centered staples was not neat or professional. Jessica said the entire product reflected poorly on Joe and his business. And in a game where first impressions are crucial, Joe’s current first impression would never lead to a second one.
Joe was crestfallen but thanked Jessica for her candor. He muttered he would probably lose his orders for 100,000 cases. Jessica immediately picked up on the comment. What 100,000-case order? Joe elaborated that he had received several purchase orders from the likes of Safeway and Wal-Mart. The buyers loved this gourmet mustard and were awaiting shipment.
Jessica asked Joe why the purchase orders weren’t included in the supporting materials. Joe didn’t realize the documents themselves were important. He had mentioned the orders at the bottom of page 27. Jessica scoldingly told Joe he was hiding his light under a bushel. Orders of that magnitude should be mentioned on page 1 and attached as supporting material exhibits.
Joe smiled. Did she think he had something? Jessica was now tearing through the financials, the management section, and all her other favorite parts of a business plan. She was starting to appreciate the opportunity in front of her.
As it turned out, Jessica’s firm invested in Joe’s business. And in the process, and very  fortunately, Joe came to fully appreciate the importance of plan presentation and the inclusion of important supporting materials.
Your First Impression
The first impression many people will get of your business is your plan’s appearance. Do you think a potential investor or lender will look differently at a business plan that is neatly bound and formatted for ease of understanding compared to one that is written margin-to-margin in purple crayon? What impression do you want to give? Here are a few hints for a good-looking plan:
•    Use white (or very light-colored) paper.
•    Margins should be at least one inch (but less than two inches) all the way around.
•    Font styles should be kept to a minimum (no more than three).
•    Colors should be used conservatively (photos and complicated graphics are exceptions). Black print and one or two accent colors are best.
•    Pages should be printed on one side only.
•    The entire document should be single-spaced with double spaces between paragraphs.
•    Don’t be afraid of white space.
•    Use bulleted points whenever you can.
•    Be consistent with formatting of tables, graphs, charts, titles, and section headings.
•    Use neat, professional binding—no staples.
•    Use a spell-checker.
•    Get someone you trust to look through and read the plan.
•    Include a table of contents at the beginning and an index at the end.
Your cover sheet should include all the information a reader will need to get ahold of you (company name, address, and phone number; names, titles, addresses, and phone numbers of owners) as well as the company logo, the date the plan was prepared, and the name of the person who prepared it.
Length
It’s ironic that it takes a 200-page book to explain how to write a succinct business plan. Typical business plans average between twenty to forty pages, including support materials. (Others, of course, maybe longer.) On the surface, it may seem unnecessary to do all the research and planning and organization we suggest, but think of your business plan as a crucible. The research, planning, and organization are the components you focus on in order to create a successful business. A winning business plan not only maps out the keys to a successful business but, more important, addresses the unique aspects of your business in a way that will serve your unique temperament, goals, and experience while simultaneously meeting the needs of investors and financiers.
So how long should your business plan be? The answer is simple: as long as it needs to be. How do you know how long it needs to be? You do the preliminary footwork. This book is an excellent first step. Then start writing. As you write it all out, you’ll get a sense of how long feels right. And again, have trusted friends review your work. They’ll help you determine which areas need to be fleshed out and which ones need to be pared down.
Presentation
Business plans are meant to be seen. Whether you wrote your plan to attract funding or to help with management, you will need to show the plan to someone.
•    The plan’s appearance reflects your commitment to creating a winning business plan.
•    The plan’s content is far more important than its appearance, but it won’t be read if it lacks a professional look.

If you wrote your business plan in order to attract funding and/or investment, you will need to get the plan into the hands of the people who can decide whether or not to give you money Most of us are uncomfortable when it comes to talking about money. Many of us were taught that it is rude to talk about something so crass. But if you want someone to give you a loan or invest in your company, you will have to get over your upbringing because you can’t just mail out your plan and hope for the best.
If you want loan or investment approval, you will need to schedule meetings to present your plan. Don’t think that just having the meeting and leaving the plan for the decision makers to read will cut it. Don’t leave something as important as your business’s future to chance. Decision makers may promise to read your plan and give it consideration, but you can’t be sure they actually will. The only way to be sure that your potential investors or funders get your message is to present it.
The presentation of your business plan should be a business meeting, a formal presentation. Even if the potential investors are your parents and your little brother, you want to present your plan in a serious and professional manner. (Remember, you can’t advertise for people to come to this meeting.) But for your preexisting audience—your friends and family and any professionals you’ve been in touch with—you might want to use a conference room. This room can be at the potential investor’s or lender’s office. If not and you lack the facilities, try borrowing space from a friend or renting a conference room. You might want to use presentation equipment, such as a computer/projector for your PowerPoint presentation. You should give your audience hard copies of your plan as well. When is up to you.
You can have the plan delivered before the meeting so that your audience will have time to formulate questions, though you run the risk of them making a negative decision before you have a chance to highlight all your positive points. Try having the plan delivered just the day before the meeting so your audience can become familiar with it without enough time to make a decision. Or you can hand out the plan at the beginning of the meeting, though here you run the risk of your audience reading while you are trying to present. Either way, have copies of your presentation slides to hand out so your audience can follow along.
Your slides and their corresponding handouts should contain short, bulleted points and be in the same visual style as your plan. Your presentation should be less formal than your plan in that you don’t want to sound like you are reading. Try to make it as much like a story as you can. Practice your presentation and get feedback from people you trust to give You honest opinions before you go before people who can make or break your business. Keep in mind that your audience can read—your slides and your handouts—so you don’t have to. Let your slides be reminders for your talk. Let them remind you what points you want to make and then expand from there.
If you wrote your business plan to aid in management, who sees the plan will depend on your business, your style, and your goals. Obviously, if the whole business is comprised of you and your spouse, there don’t need to be a lot of secrets. But if yours is a business with a rigid hierarchy with decisions made only at the top level, you might want to limit access. You might choose to share your plan with management only or show employees on a need-to-know basis. You might distribute a version of the plan (say, a version without financial detail, but with graphs and percentages instead), or you could include sections of the plan in your employee manual. It is entirely up to you. Odds are you will want to consider the twin needs of protecting sensitive information and building a sense of ownership, and only you know how to do so.
While people involved with money will have a pretty good idea why you are showing them your business plan, employees might not. You might include your business plan presentation as part of a company retreat or have a special meeting just for the plan. Maybe you want to introduce the plan to everyone at once or department by department. Wherever you choose to have your plan unveiled, be sure you are present. You may choose to deliver the entire message yourself, or you might be better served using a team approach, with appropriate managers discussing different sections. Again, it comes down to your particular approach and your particular business. Regardless, be sure to explain what a business plan is and how it should be used, why you are showing it, and what you expect listeners to do with it. Similarly, if you use the plan as part of your training program for new employees, be sure that they are not just handed the plan cold but are given the same message you gave the others.

As your business and your business knowledge grow, take some time to check back in with employees to see how the plan is being used and how employees feel it is working. Get suggestions and comments from employ ees and then use that input to improve the plan. Let the plan work as a road map, a checkpoint, and a management tool.
Your Plan Is a Living Document
A business plan is an ever-changing, never-completed document. It is always in a state of revision. With the passage of time, expertise grows, markets change, customer bases alter, and technology continues ever onward. Anyone who reads your plan should get the most up-to-date and complete information you are capable of providing. This means that even after you write the last section of your plan, you need to continue to study the markets and stay abreast of industry, market, and economic trends. Just as your business will be in a constant state of flux, so, too, should your plan be.
Anticipating Problems
Ideally, any business plan, whether written for management purposes or to attract funding, will help anticipate problems that could strike your company. Are costs of supplies going up? Is technology getting cheaper? Is competition increasing or decreasing? What is the motion (if any) of your labor pool? What advertising trends seem to be coming around again? Where is the economy in its current cycle? Are your best-selling products peaking, or are they on their downward slide? Which products are showing new strength? Use your plan to draft alternate budgets so you will have some sort of road map if good times get bad or bad times get better. Use your plan to assess whether or not your current circumstances (good or bad) are short-term or long-term.
Supporting Materials
Supporting materials are all the documents that can help convince readers of your business plan that your business is worth their time and/or money.

The documents should be introduced or referenced in the text of the previous sections so that they can stand alone in this section. These documents should need no introductory or explanatory text in this section and therefore can be simply arranged and attached to the final plan or offered as a separate document to serious investors or appropriate personnel.
As you go through the process of writing your business plan, you will think of a host of materials that can help you make the argument (to yourself, your management team, or potential lenders and investors) that your business is a good risk. These documents give credence to your arguments, and they back up your numbers. They help show how you came to your decisions and how you will make your plan work. As you prepare the plan, you should keep a notebook close by to jot down the supporting documents you reference in other sections or that you think you might want to include. Be sure you include every document that you mention in your plan. Don’t make your readers search for the information they need in order to make an informed decision (ideally, the positive decision you want them to make). Some of the support materials you should consider are these:
•    Resumes. Ideally, resumes are one page and include work history, education, professional affiliations and honors, and special skills. Include resumes for all owners/partners and corporate officers (whatever applies to your corporate entity).
•    Letters of reference. Your letters of reference can come from past investors, lenders, or business acquaintances (people you’ve worked for or with, suppliers, distributors, etc.) or from nonbusiness acquaintances (but avoid letters from friends or relatives) and should be assessments of your business skills.
•    Personal finances. While some practitioners suggest including a balance sheet of your personal financial history as well as that of other owners/partners, I am not keen on it. Keep your personal information as private as possible.
•    Leases. Include any lease agreements you have for your business (such as those for buildings, vehicles, equipment).
•    Contracts. Include any contracts for your business (such as loans, purchase agreements, service contracts, even maintenance agreements).

Remember Joe’s 100,000-case gourmet mustard order? That type pe of business validation is well placed in this section.
•    Other legal documents. Include any other pertinent legal documents, such as copyrights, patents, trademarks, insurance policies, and articles of incorporation.
•    Other attachments. Include any other documents or information that you have referenced in the body of your plan but that do not fall into any of the above categories. These would include demographic information, maps, and the like.
Depending on your business and the information available, you might also consider attaching:
•    Glossary of industry terms
•    Product information
•    Additional or more specific marketing data
•    Marketing materials (brochures, catalogs, etc.)
•    Financial analyst reports
•    Newspaper or magazine articles
•    Company history
•    Press releases
•    Web pages
Not all plans will need the same information. Those written for management purposes will not need the resumes, letters of reference, or credit reports. Even plans written to attract funding will differ as different lenders or investors will want to see different information. It is best to prepare as much information as you can so that you can easily tailor copies of your plan for various readers and institutions. And please note that the plan found in the appendix is a somewhat abbreviated version for reasons of space. Your plan may have much greater detail.

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Scott was clueless when it came to financials and forecasting. Scott knew how to make money at his video production studio, but keeping it was another matter. He was considered one of the best studios in town for video, audio, and mixing. He even produced quality still photography shots from videos for publicity purposes. But Scott sensed he was slipping. He grudgingly knew he needed to expand his operations to keep up with the market. But he was having so much trouble tracking his money, how could he? He was overwhelmed when it came to accounting and bookkeeping and finances in general.
Then one day, two things happened that dramatically changed his course. First, he lost a significant job to a company he considered to be a lesser production house. When he called to find out why he had lost the work, Scott learned that his lowly competitor had expanded its services offered and had upgraded all of its equipment. It could now produce a higher-quality video at a lower cost. Second, several employee checks had bounced. The employees were not happy. Their NSF payroll checks caused a cascade of late fees and penalties on mortgage, credit card, and other payments. One  employee quit over it. Scott’s valued assistant warned him that such a thing could never happen again.
That was it for Scott. He knew he had to get a handle on his books and then prepare a business plan so he could catch up with the competition. He asked his lawyer for advice on how to proceed. The attorney gave him the name of a consultant who had helped out another client recently.
Shortly thereafter, the consultant, Ron, visited Scott at his studio. He listened to Scott talk of his frustrations with his accounting and his need for a bank loan to acquire new equipment to keep up with his competitors. Scott was very worried he could never get a bank loan because he didn’t have the systems in place to prove that he’d ever be able to repay a loan. At this moment, he wasn’t even sure whether he could repay a loan or not.
Ron told Scott not to worry. There were plenty of entrepreneurs in his
they’d been able to pull it together, obtain
exact situation. With a little help,
a bank loan, and thrive. He would, too.
That was fine, Scott said. But the accounting had become such a problem that he had developed a mental block to it all. When he heard all the financial terms, he just tuned them out. He was stressed that he could never comprehend it well enough to talk to a banker.
Ron had the solution to Scott’s mental block. They would go through the four main accounting reports and relate them to Scott’s business. This way when Scott heard the term, he could equate it to an aspect of his business and be able to talk about it. Scott agreed to give it a try. Ron identified the four main reports they would be discussing as income statement, cash flow statement, balance sheet, and break-even analysis.
Ron could sense Scott’s frustration at the mere mention of these terms. So he asked Scott a production question: “What is a snapshot?” After several questions as to why this was relevant to anything at all, Ron got Scott to answer that a snapshot, as in a photograph, is an image in time. Ron then told Scott that was also what an income statement is: a snapshot of your business at one point in time. If an income statement is prepared on June 30, then like a photograph taken on June 30, it will show you if you are making any money as of June 30. Scott slowly nodded.
Ron also pointed out that in an income statement you bring all of your revenue from sales and other sources into the picture, take out all of your costs,  and end up with a snapshot of net income. This is your photo of the amount of profit or loss you  have on, for example, June 30.
Ron went on to say that income statements are also called earning statements or profit and loss statements (P&Ls) and that they all provide the same thing: a snapshot of the business on a fixed date in time.
Scott said he was getting the picture, so to speak. Ron laughed and said next was the cash flow statement.
A cash flow statement is movement, he said. It shows where the money comes from and where it goes. It is different from an income statement, which takes a still picture of sales and profits. Instead. Ron said, the cash flow statement tells you where the cash comes from, how it is being used in the company, and how it is going out of the company. There is movement to a cash flow statement, Ron explained. It is a video. Scott’s eyes lit up. He could visualize the movement.
Ron went on to explain there are two parts to this video. One is called the sources of funds, which tracks not only sales but also loans, line of credit drawdowns, and equity investments from investors. It records the movement of money into the company. Part two of the video shows the uses of funds—the movement of money within the company. This includes the cost of goods sold, administrative expenses, loan and interest payments, equipment purchases, and dividends or draws paid to the owners.
The result of this movement of cash into the company, around the company, and out of the company is called the net change in cash. It is the difference between total funds in and total funds out.
Ron noted that a happy ending to this video would show a positive number and an upward trend. Scott said he was on the edge of his chair to see how his cash flow video ended. Ron agreed but reminded Scott that the cash flow statement doesn’t have a finite end. Instead, it is a measuring tool, a means for improving performance over time. A never-ending video. Scott liked that idea.
A balance sheet was the third report he needed to understand. This matches your assets (the things you own) with your liabilities (the items you owe on). The result is your total assets.
Scott didn’t see how this related to video production. Ron asked him to think about a mixing job, where you lay the audio (the sound) with the video Ron said this was how Scott should remember a balance sheet: the mix of audio and video into one valuable asset. Or, in accounting terms, the mix of assets with liabilities to equal net worth. Scott saw it, and Ron went on to clarify that just as an income statement is a snapshot of the business, and a cash flow statement is the movement of money, a balance sheet is used to get at the owner’s equity or net worth of the business.
The key element of the balance sheet is that it has to balance. In video terms, it can’t look like the English translation of a Japanese movie where the spoken words don’t match the movement of the actor’s lips. Instead, the assets on one side and the liabilities on the other side have to be equal and have to balance.
Ron noted that if you had more assets than liabilities (and hopefully he did), the difference was the net worth of the business. By tracking this regu- larly, you could see if you were getting richer or poorer. Scott understood, and Ron moved on to the break-even analysis.
Ron guessed that Scott, like almost every other video guy he’d ever met, would love to someday make a big-budget Hollywood movie. When Ron asked the question, Scott perked up at the thought. Ron then explained that break-even analysis is like opening night. The movie has been made. Now, how many tickets do you have to sell to break even? Scott understood but asked about the distributors and movie houses. TheN, got a cut of every ticket sold.
Ron explained that was factored into the equation. With a movie, you know on opening night what the fixed costs to make it were. And you know how much the distributor took out of each ticket—for example, 60 percent. Similarly, in a business you have fixed costs such as rent, insurance, and office costs each month, and you have an average gross profit margin on each sale.
Continuing with the movie example, suppose it cost $1 million to make a low-budget thriller. That was the fixed cost. The distributor and movie houses were going to keep 60 percent of each $7 ticket sold. Your gross profit margin was 40 percent. By T dividing the $1 million film cost by the 40 percent you get from each ticket, you learn that you need to sell $2.5 million in tickets to bring in the $1 million needed to break even. Scott clearly understood this and began talking about a script he’d been working on with a friend. Ron brought him back to reality
Just as you had opening night for a film, you have the first of the month for your business. You know what your rent and other fixed expenses are. From there, you have to figure how many things—be it tickets, products, or services—you would have to sell and at what percentage of profit to break even for the month.
Ron got Scott to focus on his own business. With rent and all the other fixed expenses, it cost him $12,000 a month to keep the doors open. A video production job, after paying for film and supplies, netted him 50% percent of the monies paid by the client. So, using the break-even equation, Ron told Scott that he needed to bring in $24,000 a month just to break even.
Scott shook his head. There were some months when he came nowhere near that amount. Ron said he needed this tool for bidding on jobs and taking on new business. You needed to know where you were every month, and you had to hold your margins to reach your break-even point before moving into profitability.
Ron summarized the discussion by writing it down on a piece of paper for Scott to remember:
Accounting Term    Production Term    Answers the question
Income statement    Snapshot    Am I making money?
Cash flow statement Video    Where did the money move?
Balance sheet    Audio/video mix What is this worth?
Break-even analysis    Opening night    When do I start making money?
Scott appreciated the assistance. His mental block was removed. With Ron’s help, the financials were brought into order, reasonable income projections were crafted, and a bank loan was obtained. Scott went on to profitability and eventually made his movie.
The Importance of Forecasts
Bankers and investors will be looking at your plan to see if your business is a good risk. In other words, will your business income allow for timely repayment of borrowed money? One of the ways this risk is analyzed is by reviewing your income projections, which is also known as a pro forma profit and loss forecast. Your income projections report is based on the other four reports we’ve just discussed. If you are a start-up and don’t have a prior history, you’ll be making all five reports up out of thin air. In which case we must favor reality over creativity.
The income projection is a way for bankers and/or investors to get an idea of what the near future (usually three years, seldom more than five) will hold in terms of income and expenses based on reasonable assumptions of costs and sales. Your assumptions should be based on prior experience and real-world numbers. Don’t try to predict the future with a cracked crystal ball, Be realistic.
Obviously, a three-year income projection is a pro forma statement and must be backed up by sound reasoning and expertise—both of which you should have after all your research on industry standards and trends. If you are basing your projections on past performance, be clear about it. But don’t just take last year’s numbers and shove them into next year’s projec-
tions.    ections. Be sure to take into account changes in the industry, the economy
marketing, competition, efficiency, costs, and the like. If you are basing projections on standards and trends, state where you got your information. Again, be realistic. The people you’ll be dealing with will know when you’re blowing smoke.
Whereas the cash flow statement records the movement of all cash going in and all cash going out, the income projection looks only at income and deductible expenses. But all parts of your business plan build on each other. The cash flow statement will contain some of the information you need for income projection.
Forecasting Timelines
The timeline for an income projection can vary depending on how you are using the plan and what you want to accomplish. Three to five years is the average. But remember that the art of prognostication blurs with distance. Three years is certainly a reasonable timeline because it gives a glimpse of the future without risking too much inaccuracy. But note that different funding entities may prefer other timelines. Don’t be put off if someone asks for five years and you’ve only got three. If you want their money, go back and do five.
As with the overall timeline, the time breakdown of your forecast can vary as well. If you are preparing your plan for management purposes, you may want to show your projections by  year. If you are preparing your plan to attract funding, projections by month may work well. But different entities have different preferences, so it is a good idea to check with your target entities ahead of time to find out how they would like your financials laid out.
The basic categories for an income projection are the same as those for the income statement:
Income
Net Sales [account for returns, allowances, and markdowns] Cost of Sales [such as inventory, purchases, and cost of goods available for sale]
Gross Profit [Cost of Sales subtracted from Net Sales] Expenses
Variable [such as advertising, professional fees, packaging costs, freight, supplies and parts, payroll—including overtime and benefits—repair and maintenance, travel]
Fixed [such as rent, leases, utilities, loan repayment and interest, insurance, depreciation of capital assets, workers' compensation, taxes and licenses, and office salaries]
Total
Income from Operations [Expenses subtracted from Gross Profit] Other Income (such as interest income)
Other Expenses
Net Profit or Loss Before Taxes
Taxes [such as sales, real estate, income, inventory, and excise] Net Profit or Loss After Income Taxes •    If you want to take the exercise one step further, include a column for industry standards so that anyone reading your plan can quickly see how your company stacks up against industry averages.
•    As time goes on, you can compare your projections to your real income and expenses and adjust accordingly. Even projections are a good management tool.
•    Financial projections require a high level of financial literacy. If you don’t have great expertise, use the creation of your financial projections as a learning experience and hire a CPA or accountant who will teach you the fundamentals of the statements while you prepare them together.
•    There are several user friendly accounting programs for small businesses that are great resources for both the financially astute as well as the new business owner. Research the Internet for what others have to say about affordable software such as QuickBooks from Intuit.
Forecasting
Forecasting numbers for the future should not be an exercise in wishful thinking. Rather, your forecasts should be based on realistic expectations and real-world experience. However, not all that experience needs to come from you. If you are a brand-new business owner, it is a good idea to talk to others or even hire some professionals to help you get the numbers right. If you are an owner of an existing business, try including your managers and department heads in planning for the future. This is called bottom-up forecasting.
Bottom-up forecasting uses the knowledge of the front lines to predict as accurately as possible the future needs of your business. Managers and department heads can plan ahead for the needs of their teams and give the data to you to approve and compile. These front liners know what equipment will need to be replaced next year, what positions will need to be added, and how many training programs need to be added. Your sales team should have a good idea as to where sales are going and what trends might change the path you are currently on, and the like. Each manager or department head can look at the next few years month by month and come up with a realistic forecast. You can add all those forecasts together to prepare a picture of the future of your business as a whole. Of course, your front liners cannot accurately predict everything that will be needed in the coming three years, but they might have insights you don’t.
Top-down forecasting is planning for the future with the end in mind. It starts with your goals for three years out and backtracks the steps it will take to get there. You start with the big picture—the industry—and your goals within it. With your market share goal, you can figure your projected revenue. From there, you work your way down the table, filling in exact numbers where you can and making your best predictions where you can’t. Still, these are not guesses. Even the advertising section (one of the most variable sections of your projection) can be worked out logically. You know where you stand with the competition and the industry norms. So you know if you will need to spend more or less than the norm in order to increase your piece of the pie. How much more is a little murkier, but your marketing section analysis should be able to guide you.
Top-down forecasting allows you to work your goals into your company’s expectations of the future. It also allows for some spin, but keep it real.
Now to drive home the financials and forecasting of financials, we’re going to review the four reports again and look at some new beneficial ratios to use. If you feel like you’ve had enough of all the numbers, feel free to go on to the next chapter.
Cash Flow Statement: Cash Is King!
Money comes in; money goes out. The difference between the two is your profit or loss. Put it all on paper along with a timeline, and you have a basic cash flow statement (or budget). This means you put down how much money you expect from whom (by category—sales, loans, etc.) and when (by date, week, month, or quarter), and how much money you will need to pay out (bills, debts, and expenses) to whom and when,
In Rich Dad’s Guide to Investing, Robert Kyosaki and Sharon Lechter wrote: “Cash flow management is a fundamental and essential skill if a person truly wants to be successful in the B quadrant. Many small business owners fail because they do not know the difference between profit and cash flow.”If preparation of the report seems daunting, try breaking it down into easily digestible pieces. Create separate budgets for revenues (real and/or projected), cost of sales, fixed expenses, and variable expenses. You may also want to create a table of all your sources of incoming cash as well as one for all outgoing cash. You don’t have to include all this information in your plan (the table may contain detail better left under wraps). Then you can use these tables to figure out where the money is going to come from to pay the bills each month if cash in and cash out don’t exactly coincide. And there’s your timeline.
Your table or spreadsheet for cash flowing into your business can include categories such as:
•    Amount of cash you have available for the business
•    Sale revenues (broken out by sales, service, accounts receivable, collections, and deposits)
•    Interest income
•    Any sales of long-term assets
•    Liabilities (such as loans)
•    Equity (such as owner investments, sales of stock, or venture capital)
Your table or spreadsheet for cash flowing out of your business can include categories such as:
•    Start-up costs (including business licenses)
•    Inventory purchases
•    Controllable expenses (such as freight, packaging, and advertising)
•    Fixed expenses (such as rent, utilities, and insurance)
•    Long-term purchase assets
•    Liabilities (such as paying back Loans)
•    Owner equity (money you take out as an owner)
You can prepare a statement for any stretch of time you want, but remember that the further out you project, the more you risk losing accuracy. It is best to stick to one fiscal year, beginning with the start of the current fiscal year and stepping month to month to the end of that same fiscal year. To improve accuracy, keep revising the statement (monthly is ideal) to reflect reality, and your ever-increasing expertise.
The timeline will help you plan for the time lag often involved with collection of receivables and will allow you to time collections so that you are not caught short when bills come due. For example, your office supply store likely experiences an influx of cash during August and September because of the back-to-school frenzy. your big bills may come significantly later in the year. Plan accordingly.
The cash flow statement (like most budgets) only includes real money (cash in, cash out). It does not include noncash transactions (such as amortization or depreciation).
The traditional format of a cash flow statement has the total for the year and the subtotals for each month in thirteen columns (vertical) with column labels across the top. The rows (horizontal) show the beginning balance and the amount of cash in and cash out by source, with the sources listed on the far left. The table (or spreadsheet) will be easier to understand if you break categories into subcategories when you can. Here is an example of a detailed cash flow statement:
Total [this row is the total for each category by column] Beginning Cash Balance [enter under month 1]
Cash Receipts
Sales Revenues
Cash Sales
Receivables
Sale of Long-Term Assets
Interest Income
Total Cash Available [add the Beginning Cash Balance to all Cash Receipts]
Cash Payments Cost of Sales Material
Labor
Purchases

Controllable Expenses
Supplies
Salaries
Freight
Packaging
Advertising
Miscellaneous Fixed Expenses Rent/Lease
Utilities
Office Salaries Licenses/Permits Insurance
Advertising
Miscellaneous Loan Payments Interest Payments Long-Term Asset Payments
Taxes
Federal Income Tax
Other Taxes Owner Draws
Total Cash Paid Out [add Cost of Sales, Controllable Expenses, Fixed Expenses, Loan Payments, Interest Payments, Long-Term Asset Payments, Taxes, and Owner Draws]
Balance [subtract Total Cash Paid Out from Total Cash Available; put negatives in brackets]
Incoming Loans [loan money coming in]
Equity Deposits [deposits to be made]
Ending Balance [add the numbers for each month; this number should be the same as the total for month 12]
An example of a pro forma cash flow statement is found in the appendix; the following is an example of a simplified Cash Flow Statement:

f you don’t, or if you find it difficult to prepare a reasonable projection, you may want to rethink your other sections and go back to researching.
Balance Sheets
A balance sheet (also known as a statement of financial position) is a balance of your company’s finances. It presents data on assets, liabilities, and net worth. Assets are anything of monetary value owned by the business. Liabilities are company debts. Net worth is capital—the worth of your equity as owner. When you add liabilities and net worth, you get a total for assets. Generally accepted accounting principles link these three factors because of their mathematical relationship. A positive net worth means assets outweigh liabilities; a negative net worth means liabilities outweigh assets.
No matter the business, no matter the use, balance sheets share the same format. All professionals expect this format. Anyone can read them and easily compare one to another. Due to the ease of interpretation of this format, balance sheets are relatively simple to create.
Assets are anything of value owned by or legally due to the company and fall into four categories:
1. Current: those that can be converted to cash within a year (such as cash, checking and savings accounts, accounts receivable, short-term investments, prepaid expenses, and inventory from raw materials to finished products)
2. Long-term: investments such as stocks, bonds, and special savings accounts to be kept for at least a year
3. Fixed: resources not meant for resale (such as land, buildings, improvements, equipment, vehicles, and furniture)
4. Other: assorted assets that typically are unique to a business’s circumstances.
Liabilities fall into two categories:
1. Current: payable within one operating cycle (such as notes, taxes, interest, payroll accrual, and accounts payable)

2. Long-term: mortgages, vehicles, notes, and the like (take the current payment due subtracted from the remaining balance)
Net worth or owner equity is given according to the legal structure of your business. Corporations use the total invested by owners or stockholders added to retained earnings (after dividends are paid). Partnerships, LLC’s, and sole proprietorships use the original investment of owners added to earnings after withdrawals.
A sample projected balance sheet is round in the appendix.
Balance sheets should be prepared on a regular basis, not just when you are preparing a business plan. The balance sheet can help you ou spot trends and plug cash leaks before they sink your company.
If you are preparing your plan fora new business, you might want to include a balance sheet of your personal finances instead of a business balance sheet, to show your ability to handle money. Then again, you might not want to do so, in order to show that you value your privacy.
Income Statement
The income statement (also known as a profit and loss statement or statement of operations) reveals your business profitability at a set point in time. What your business has spent (and what it was spent on) is combined with what your business has brought in (and from where) to tell you whether you made money or not.
Preparation of the income statement is best done on a monthly as well as yearly basis. You really don’t want to wait a year to see if you are making money. The data for your income statement should be readily available from your company records.
Again, there is a standard, expected format for your financial data. The income statement should include:
Income
Net Sales [returns and allowances subtracted from gross sales] Cost of Goods Sold

Gross Profit [Cost of Goods Sold subtracted from Net Sales]
Other Expenses
Direct, controllable, variable [those associated with sales]
Indirect, fixed, office, overhead [those associated with administration] Other
Net Profit/Loss Before Income Taxes
Income Taxes
Net Profit/Loss After Income Taxes
A sample of a detailed income statement is shown on page 147. Here is an example of a simplified income statement:
Income Statement for 2008
Gross Sales
Cost of Goods Sold Gross Profit
Expenses
Net Profit Before Taxes Taxes
Net Profit/Loss
The income statement can help you track the effectiveness of ,your plans by showing how expenses and sales are affecting profits or losses. It will also help you plan for variations in sales volumes from month to month. Though you only need one year’s worth of info for the business plan, a comparison of income statements over a period of years can help you see longer-term trends and therefore can help you plan accordingly. Break-Even Analysis
As discussed, a break-even analysis answers the question of how much your business will need to sell in order to cover its costs. For example, if you sell copy machines, the break-even analysis enables you to figure out exactly how many copiers you need to sell in order to pay all your bills. Add one more copier to the mix and you suddenly see profit.
The analysis is a good one for entrepreneurs because it encourages an in-depth understanding of costs. The analysis is a good one for lenders and investors because it says a lot about whether or not you, as writer of the plan, are realistic in your assumptions.
The break-even point is the dream of any entrepreneur. It is that point at which you can start to breathe a little easier. It is the point when you start to think maybe going into business for yourself was a good decision. It is the beginning of stability. It is the point too many businesses never reach. But numerically, it is the point at which your fixed and variable expenses (including cost of sales) are met by your product and/or service sales. You won’t be making a profit, but you will no longer be taking a loss either.
You can display this point in a number of ways in your business plan. In either graph h or table form, you can show dollars of expense compared to dollars of revenue or even dollars of expense compared to units of production (in either products or services). Your income projection can be the source for either way of showing the information.
If you decide to use a mathematical presentation, you can find the exact break-even point with a simple formula:
break-even = fixed expenses + (1 – variable expenses/sales) come that increases as sales increase, your revenue line will be drawn at a forty-five-degree angle on the chart. The point at which your revenue line and your total cost line meet is marked as your break-even point.
Break Even Analysis    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
Sales    20000 22000    24000    26000    280000    30000    32000
Variable Costs    12000 13000    14000    14000    150000    16000    17000
Fixed Costs    10000 10000    10000    10000    100000    10000    10000
Fixed + Variable Costs    22000 23000    24000    24000    250000    26000    27000
Net    –2000 –1000    0    2000    3000    4000    5000
Because the graphic presentation is such a great way to express complicated data for a visually focused society and the numerical presentation is so great for bankers and other number-focused types, you may choose to present Your data in both formats (might as well cover your bases) or pick and choose and customize for your particular audience.
Ratios
When potential investors begin their task of analyzing your business for risk and feasibility, they bring experience and expertise to bear on your business plan. It’s not simply a matter of whether or not they like your idea or whether or not they have the money to give. Nor is it a matter of how personally persuasive you are. What it comes down to is whether or not they think your business proposal, as presented in your business plan, is feasible. In other words, can your business make money?
40000
30000
Costs 20000
10000
0
(sales) Break-Even
(variable costs)
(fixed cost)
Sales Over Time
To create your own break-even diagram, you must first plot your fixed costs and variable costs. Label your vertical axis as costs (in dollars). Then label the horizontal axis as sales (in dollars). Your fixed costs will form a straight horizontal line across the graph because your fixed costs will stay constant even as your sales increase. Your variable costs line will increase as sales increase. The line formed by plotting variable costs on top of fixed costs will create your total cost line. Now you must add your revenue. Because revenue is in-come that increases as sales increase, your revenue line will be drawn at a forty-five-degree angle on the chart. The point at which your revenue line and your total cost line meet is marked as your break-even point.
Break Even Analysis    Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
Sales    20000 22000    24000    26000    280000    30000    32000
Variable Costs    12000 13000    14000    14000    150000    16000    17000
Fixed Costs    10000 10000    10000    10000    100000    10000    10000
Fixed + Variable Costs    22000 23000    24000    24000    250000    26000    27000
Net    –2000 –1000    0    2000    3000    4000    5000
Because the graphic presentation is such a great way to express complicated data for a visually focused society and the numerical presentation is so great for bankers and other number-focused types, you may choose to present Your data in both formats (might as well cover your bases) or pick and choose and customize for your particular audience.
Ratios
When potential investors begin their task of analyzing your business for risk and feasibility, they bring experience and expertise to bear on your business plan. It’s not simply a matter of whether or not they like your idea or whether or not they have the money to give. Nor is it a matter of how personally persuasive you are. What it comes down to is whether or not they think your business proposal, as presented in your business plan, is feasible. In other words, can your business make money?
40000
30000
Costs 20000
10000
0
(sales) Break-Even
(variable costs)
(fixed cost)
Sales Over Time

One of the ways experienced financial decision makers make their decisions is through the analysis of ratios. just as the term implies, ratio analysis involves taking numbers from the financial tables and comparing one to another. Which numbers are chosen and how they are combined tell a lot about different aspects of the business under scrutiny.
Most ratios are not analyzed in a vacuum either. Ratios are commonly compared to one another in a historical, competitive, and/or budgetary context. By comparing current figures with those of the past, decision makers can get a feeling for mobility and trends within the company. By comparing figures for one company to those of competing companies, decision makers can get a feeling for where the company stands in the competitive hierarchy of its industry By comparing real figures to budgeted figures, decision makers can see how well you have budgeted. This last comparison usually comes into play after funding has been granted. It is a good way for investors to stay on top of a company’s promises. It is also a great way for you or your management team to learn to refine your budgeting abilities.
Knowledge of ratios on your part is akin to learning to speak the language of potential investors. It gives you a chance to see what impressions your financials will make on decision makers. It alsoives you a valuable management
tool. By tracking your ratios, you can spot trends, strengths, weaknesses, and potential roadblocks. Following are some of the most commonly used ratios.
Liquidity Ratios
The current ratio and the quick ratio are two examples of liquidity ratios. The current ratio is used to determine liquidity of an existing business by dividing current assets by current liabilities. If the current ratio is greater than 1.0, then the business has a chance of being able to pay its short-term bills. The larger the number, the better the chance of paying the bills. If that number is less than 1.0, the business may be in rough water. However, decision makers will also take into account industry norms. If a ratio of 4.0 is the average for an industry, that current ratio of 1.0 is not nearly as good as it would be in an industry with an average of, say, 1.5.
The quick ratio (also called the acid test) is a measurement of liquidity without inventory being calculated in. It is current assets (not including inventory) divided by current liabilities. Comparing the quick ratio to the cur-rent ratio gives decision makers an idea of how dependent liquidity is upon inventory.
Debt Management Ratios
Debt management ratios include the debt ratio and the times interest earned ratio (TIE). The debt ratio is a measure of risk in that it shows how well the company’s assets support its monetary obligations. The debt ratio is found by dividing total debt (including long-term debt, short-term debt, and current liabilities) by total assets. A high debt ratio means high risk to potential investors.
The TIE measures how well earnings cover interest and can be found by dividing earnings before interest and taxes by interest. The higher the number, the more times earnings can cover interest, thus the safer the investment.
Asset Management Ratios
Inventory turnover and average collection period (ACP) are both examples of asset management ratios. The inventory turnover ratio measures how often your company gets rid of and restocks an average-sized inventory It is measured by dividing costs of goods sold by inventory. A higher number is better because higher numbers mean you are more quickly going through your inventory. This means fewer of your business dollars are tied up in inventory. Inventory can cost you in storage, taxes, insurance, and interest as well as time. Inventory and time are not friends. As time passes, inventory can become outdated, unpopular, or even unsafe.
ACP measures how long it takes to collect on sales on credit. When you sell on credit, there will be a lag time. That lag time is measured by the ACP
9    by
(also known as days sales outstanding and the receivables cycle) and is found by dividing accounts receivable by sales and multiplying the total by 360. Obviously, you want that number to be as small as possible. Ideally you want it as close to your company’s terms of sale as you can get it. If the number exceeds your terms of sale significantly T (greater than 30 percent is usually a problem), you show that you are not being as strict with your credit choices as you should be or there is significant customer dissatisfaction. Neither is going to endear you to potential investors. While you may have most
T    very
of your receivables paid promptly, a few very old accounts can skew this ra-tio. Take into account the odds of ever getting payment from those very old accounts and decide whether or not to write them off.
Profitability Ratios
Profitability ratios include return on sales (ROS), return on assets (ROA), and return on equity (ROE). The ROS ratio is the most basic measurement of profitability and says something about how well you can keep down costs and expenses. Divide net income by sales and, voila, you have profitability (at least on paper).
The ROA ratio similarly says something about how well you use invested assets and is found by dividing net income by total assets.
The ROE ratio builds on the ROA by taking leverage into account and is found by dividing net income by equity. Debt affects ROA and ROE in that the two will be close if debt is small. But when debt grows large, ROE is higher than ROA when the company is doing well and lower when the company is doing poorly.
Financial History/Loan Application
A good indicator of where you’re going in business is where you’ve been. One of the best ways to reassure investors of future success is through showing past success. If you are writing your plan for an existing business, you will include information on your business from start-up to present. Put this first in the financials section; it is your loan application. But prepare it last. Preparation of all the other financial documents will greatly help you in preparation of the financial history.
Even if you are not preparing your plan for investment purposes, this exercise will help in your management practices by helping you look at your business from a big-picture perspective.
The financial history subsection is a summary. Summarize the data from the other sections and reference those sections accordingly. The following are some of the categories usually summarized in this section:
Assets
Liabilities Net worth

Contingent liabilities
Inventory detail
Revenues Expenses
Real estate holdings
Stocks
Bonds
Legal structure
Insurance
Audit information
If you are writing your plan for a new business, you may want to include information on your personal financial history and status, including a personal finance balance sheet with information on assets (cash, life insurance cash value, trust deeds, personal property, mortgages, real estate, stocks, bonds, mutual funds, accounts receivable, notes receivable), liabilities (unsecured loans, credit card debt, revolving credit debt, notes and deeds, loans secured by personal property, loans against life insurance), net worth, annual income, and annual living expenses. This information will help potential investors see how well you handle money. But remember also that in this era of identity theft, the less information you give out the better.
Keep in mind that the personal financial history combined with the information you include in your loan application (provided by institutions upon request) needs to be verifiable and accurate, just as it would if you were providing information on an existing business’s financial history.
Uses of Funds
It would be nice if your promise to pay someone back was all it took to get funding for your business. It would be nice if there were institutions or individuals who would write you a blank check to pursue your dreams. But it’s not likely. Most institutions and individuals want to know exactly what you plan on doing with their money. And keep that straight: It is their money.
The best place to start with how you will use the funds you are requesting (if that is the purpose of the plan) is to provide a summary of your business’s financial needs. If you are preparing the plan for management purposes only, you will want to skip this section.
The summary of financial needs and the uses of funds can both be short and to the point. An example is found in the appendix. The summary is a simple statement of what you need. Working capital, growth capital, and equity capital are the three broad categories of funds. The main difference between the three is in how quickly you will be expected to repay the money. Working capital loans are usually for only a year, growth capital loans are for a few years (usually no more than seven), and equity capital is usually repaid through a stake in the business (which means the payback could be slow in coming, but it may continue to pay over the long haul above and beyond the initial investment),
Be specific as to what you need the funds for. Are you looking for a loan to buy equipment or pay for training? Are you looking for an investor to take on a significant portion of start-up costs?
Also be specific as to how much you need and how it will be disbursed. If you are buying equipment, for example, list how much that equipment will cost, along with the exact make and model. If you are investing in training, list how much it will cost, how long it will take, and who will be doing the training. Give the details it will take for a lender to determine whether or not the investment will increase profit. In fact, if you have data on how profit will be increased (and you should), include that in this section as well.
Assumptions
Not even numbers are concrete in today’s world. There is always a bias, whether conscious or not. The purpose of the assumptions subsection is to explain to readers how you chose your numbers. It is the section readers turn to in order to interpret the biases of the preparer. Assumptions answer the all-important question “Why?” Why did you decide, for example, that you could double your sales in two years? If readers don’t know your reasoning, they cannot make an educated decision as to the validity of your numbers. Your assumptions are yet another chance to convince your readers.
If you are preparing your business plan in order to attract investment, you definitely need this section. If you are preparing your plan for manage-meet purposes, you might leave it out if it’s only for your own use. However, if the plan will be used by others or if you are preparing it for the edification of others in your business, you might want to keep it in. With your assumptions in mind, others within your company are better able to meet goals because they know what is behind those goals. For example, if your income projection states that you plan to double your sales within two years, it would be nice for your sales staff to know how you think that is possible. Is there new technology in the offing? Is a piece of proprietary information finally snaking its way through the approval process? Do you plan an expansion? All good information for your staff to know
As for format, some plans include the assumptions as footnotes at the bottom of each of the financial tables, some include them as a separate page within each table’s subsection, and yet others have one separate subsection devoted to explaining all the assumptions that went into all the financials. Choose the format that works best for your business.
Don’t get lazy with this subsection and never assume that any of the numbers are self-explanatory. Discussions about your plan may occur months after you have prepared your numbers, and you might actually forget why, for example, you thought you could double sales within two years. Don’t get stuck fumbling for explanations in a loan or investment meeting. If the assumptions are on paper, you can refer to them. If they aren’t, you could end up losing the trust of those whose money you are trying to obtain. Why risk it?

•    As final points on the financials, know that your investors want to see how much “skin in the game” you have. Keep your salaries as low as possible to show that you are investing “sweat equity”
•    Also know that your investors will want your overhead kept low. They want to see their money spent on the business, not on the office surroundings.

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The better you understand your business, the better prepared you are to write the business plan. Ideally, you will have thoroughly thought out your business long before you ever open your doors for sales. Too many entrepreneurs jump into business with both feet and don’t bother with understanding (let alone planning) until the water is rising. jumping into the deep end of the pool is not the best way to learn to swim. If you’re lucky, you won’t drown, but even if you make it out of the pool, the experience is likely to be remarkably unpleasant.
The Business Section
The first major part of your business plan should be a detailed description of your business. You’ll address your corporate entity choice, be it corporation or limited liability company. You won’t even consider using a sole proprietorship or general partnership, because, first of all, investors wouldn’t even bother to read the plan and, second, there is too much personal liability for you in a sole proprietorship or general partnership. To fully appreciate this, see my book Own Your Own Corporation (Warner Books, 2001).
Your detailed description will also include strengths and weaknesses, a description of your operations, location, personnel, records, insurance, and security.
For the business, the market, and the financials sections of your plan, it is best to introduce the section with a brief (as in one page) summary. From there, you can use more detail in each subsection. While the entire plan should be succinct, these summaries will allow interested parties to graze for pertinent information.
There are two questions you need to ask yourself about your business that color every part of this section, though their answers are never directly addressed in the plan:
• Why are you in business?
• What is your business?
If these seem like easy questions to you, either you’ve done a good job thinking through your business or you haven’t even started. We’ll hope for the former.
Why are you in business? How well do you know yourself—in particular, your personal motivations? When you decided to go into business, was it out of desperation (lost job, family illness, personal injury)?)? It’s okay for desperation to spur you into a new direction, but don’t let it rush you. Did you decide to go into business out of a desire for personal fulfillment (following a dream, helping others)? Many businesses are begun for just this reason, but if you don’t understand the realities of owning and operating a business, you aren’t likely to stay in business long enough to do you or anyone else any good. Did you decide to start a business in hopes of amassing great riches? This is another common reason, but chasing after dollars runs the risk of leading to early burnout and/or disillusionment. Understand your motivations, and you can guard against many a typical disaster.
What is your business? Don’t answer too quickly. Just because you ou sell office supplies, that does not necessarily mean you want to look and feel like all the competitors. Think about it: There are plenty of office supply stores out there. Most are better established than yours. Many will have lower prices than yours. So why should anyone go to Your store? Answer that question, and you will know what business you are really in. Do you offer faster service and delivery? Do you have a specialized staff that can help clients with organization, technology, or planning? What is it that your customers (or potential customers) say about your business when they recommend it to friends? What part of the idea for your business originally got you so excited that you Couldn’t wait to tell your family about it? When it comes to identifying the heart of your business, look to your own heart. Concentrate on what your business is rather than what it does. Think back to the spiritual mission and business mission section and ponder what higher purpose you have to serve that will differentiate you in your space and allow you to generate cash flow
With the answers to these two deceptively simple questions, you will hopefully find the key that unlocks the potential of your business idea—an identity that can’t be duplicated. And it is that identity that will garner you funding, investors, and customers. But first, we’ve got to overcome one of the toughest parts of business plan authorship: writing about your strengths and weaknesses.
MIKHAIL
Mikhail was stuck. He needed to finish his business plan in the next two days for a potential investor but couldn’t get past the next section on his template: strengths and weaknesses.
Strengths and weaknesses. How could he write about that?
“Our company’s strength is me. I’m the best taco maker on earth.”
He couldn’t write that, even if it was true. It seemed too brazen, like a tedious NFL show-off player dancing wildly in the end zone. That wasn’t Mikhail’s style.
And weaknesses? How was he supposed to handle that one?
“Our company’s weakness is that management has no idea how to write a business plan.”
Again, while true, it didn’t inspire much confidence.
Acknowledging his writer’s block, Mikhail left the house and walked down to Starbucks for a toffee latte something. He got in line behind Jill, a new friend who had done well in starting and selling several businesses. He told her of his barrier to completing the plan. She offered to help, and they sat down to brainstorm with their vessels of caffeine and sugar.
Jill agreed that in the business plans she had worked on, the strengths and weaknesses section had always been hard to write. But she noted it was a positive part of the process because it forced you to think about some crucial issues:
• Why would someone really want to invest in you?
• Just what are your strengths and weaknesses?
• Are your strengths common or competitive?
• Can your weaknesses be overcome?
While talking about Mikhail’s business, and after several latte refuelings, some headway was achieved. Mikhail did indeed make excellent tacos. He infused them with all sorts of unique combinations, from mangoes to margarita-marinated mahimahi. His strengths were both common (he was good at making tacos) and competitive (he made them better than anyone else around). Jill suggested he focus on these issues as his strengths. Mikhail didn’t have to be brazen to make such claims, she said. A section beginning with “Management believes that its strengths are found in its ability to prepare unique and flavorful tacos” would work.
The weaknesses section, she said, was the trickier one. Just as strengths came in two varieties, common and competitive, so did weaknesses: They were either common or catastrophic.
After reviewing his plans some more, Jill didn’t see anything that would stand out as a catastrophic weakness. Was there a risk that the entire country would turn away from Mexican food? Not likely. Was there a risk of mad taco disease? Again, not likely. But Jill did see two common weaknesses and, she said with a smile, it was in this section where one could turn a negative into a positive.
Mikhail made a great taco. The weakness, which was common to many new businesses, was that no one knew this. The company was weak for brand awareness. This, of course, could be overcome.
The other obvious weakness was that Mikhail was a recent Russian immigrant. Who would ever expect a former Moscow bicycle mechanic to be a creative genius when it came to Mexican cuisine?
Jill saw this possible weakness as a huge potential strength. The human interest angle alone—Russian immigrant/Mexican cuisine, only in America—would help turn a lack of brand awareness into a branding strength. Mikhail was on his fourth latte and saw her vision clearly. He wanted to get back home and start writing. Jill laughed and said she understood. She also asked to see the business plan when it was finished. She knew some people who might be interested.
Before we further discuss the strengths and weaknesses section, it is important to underscore a key element of the story. Business plans aren’t always (or best) written in a vacuum. When you are blocked or struggling with a section, clear your head and seek out the perspective, insight, or just different view of someone you trust. It is amazing what human interaction can do for breaking through a tough section. And, with the benefit of additional input and review, you will find yourself drafting a better plan.
Part of gaining an intimate knowledge of your business is understanding your strengths and weaknesses (also called Core Competencies and Potential Liabilities, or Competitive Advantages and Competitive Challenges, and often given its own section). Think back to everything you’ve ever learned about competition and marketing (or skip ahead and read Chapter 10 on marketing). At their most basic, competition and marketing are about exploiting the weaknesses of other businesses and/or playing to the strengths of your own business. Analyze your business and think like a competitor. What strengths would a competitor try to downplay or neutralize? What weaknesses would a competitor want to highlight?
Once you have identified strengths and weaknesses, you can begin to plan accordingly. Are there strengths that are currently underutilized? What might you do to take advantage of your unique attributes? Are there weak points that you can shore up—through training, strategic hiring, team building, organization, or planning? What can you do now to limit the marketing options of your competitors later? Focusing on strengths and weaknesses will lead to better decisions as you proceed.
Strengths
As discussed in Mikhail’s story, there are two basic categories of strengths a business can exhibit: common and competitive. A common strength is something you do well. A competitive strength is something you do better than others in your field.
How a company exhibits strength—through corporate vision, product, operations, marketing, or sales—may change from business to business but will inevitably fall into one of the two categories. Determining whether your strengths are common or competitive can be difficult. But knowing which they are can be extremely useful. A business can improve through common strengths. A business can dominate through competitive strengths.
What are your strengths? It shouldn’t be a tough question_ to answer if you have a compelling business strategy Challenge your idea’s reason for being if it doesn’t have clear strengths.
Consider that business strengths are noticed by two groups: competitors and customers. What they see will help you understand what you’ve got. Customers (hopefully) will notice strengths in individual products (lower price, higher quality, better variety) or through positive brand associations. A strong brand can encompass a number of individual products and enhance the perceived positives of all of them. For example, the Coca-Cola brand extends to and benefits Sprite, Diet Coke, and potentially even Mr. Pibb.
Operational strengths such as logistics may not be noticed directly by customers, but they will feel the effects of such strengths. Higher efficiency will mean lower prices, faster service, and fewer mistakes. Even if customers don’t know why your product or service is better. they will certainly notice the end result. So will competitors, and soon your strength may become a common business practice for an entire industry But the point is that if both customers and competitors are noticing these things, whether directly or directly¬. you should notice them, too. Practically speaking, they should be deliberate strategies in your business plan.
Sales and distribution strengths will likely not be noticed by customers. They won’t care how many stores carry your product or how good your contracts are. All they know is whether or not they want to buy your product or service. But they can’t buy if they are not exposed to it. Distribution controls that exposure. Sales come from an ability to turn exposure into commitment. As such, sales and distribution strengths are key and an area your competitors will be sizing you up on. If they are noticing your strength, so should you.
Unique leadership skills and corporate vision can create highly advantageous employee and vendor loyalty. They can also increase sales through good distribution relationships. There can be huge benefits from such skill and vision. That said, none of it may be noticed outside the corporate structure. Until, that is, your competitors wonder why you are kicking butt while they are sitting still. Then corporate vision and leadership will be noticed by everyone with whom you do business—from the letter carrier to the sales force to the customer. Do you notice it internally now? Have you developed it into a core competency that can be considered one of your strengths? It should all flow from your mission statement as a reflection of an organization’s leader. Think back to Rich Dad’s B-I Triangle, which outlines the mission, leadership, and teamwork as the three pillars of a successful business.
There are many more examples to consider. Maybe you are charismatic or have a gift for motivating others. Maybe your honesty engenders loyalty in those with whom you partner. Maybe you were an accountant in a past life and have a true talent for budgeting on a shoestring. Your personal strengths may translate quite well to your business. Don’t overlook any strengths you might have. In business, you need every one you can get.
Think widely about your strengths, Think about what you do well. Think about the strengths of your partners or team members. (For more information, see Blair Singer’s The ABC’s of Building a Business Team That Wins, published by Warner Books in 2004.) Think about what works well in your current business, if you have one. If you aren’t currently in business, you will need to do more of that creative thinking to try to see possible strengths you might show in the future. Be real and don’t fool yourself. Talk to people you trust about what they think your strengths are. Do any of these strengths really help your business? Do they lead to lowering costs or increasing sales? These are the types of strengths to include in your business plan.
Know your competition. Read their business plans. And keep in mind they may be reading yours. A business plan is no place for details that threaten your Competitive advantage. Check out your competitors’ advertising. Know their operations as intimately as you possibly can and see if they share your strengths. If they do, your strength is common. If they don’t, your strength may be competitive, and that’s good for you!
Once you know your strengths, you will need to understand the whys and hows of those strengths. Why is it a strength that you have developed a new way to track your office supply store inventory? Is it because it makes it possible to fill orders more quickly than your competition? Or is it because your system is so user-friendly for vendors that they give you a break on your contracts? Or maybe your tracking has opened up an entirely new route for getting your product exposed to customers.
How did your skill, service, product, or idea become a strength? Was it through innovative use? Was advertising a key? Did you discover it on your own through research or study? Or did you learn it from watching how another company does things? How did your customers become aware of the benefit of your strength to them? By understanding the howl and whys, you increase your chances of repeating your strengths in other areas while playing them up throughout the company and through customer awareness. The bottom line is this: Strengths are strengths because they serve customers, which results in strengthened profits.
• If you don’t possess the right skills or strengths for a business, communicate how you surrounded yourself with the right employees or advisors. You don’t have to be a great mechanic to own a thriving automative repair business. If you have great leadership and marketing skills you can hire great mechanics.
• Public company 10-K annual reports area great source of reference material for entrepreneurial business plan. They provide benchmark costs and strategies as well as relevant industry information. Securities laws require them to disclose information that is very helpful to entrepreneurs.
Weaknesses
Examining real or potential weaknesses is not nearly as much fun as examining strengths, but it is just as important. (Don’t you hate how that usually works?) And you sure don’t want to write down all your weaknesses, print them on good paper, and then hand them to other people to read.
The problem is that while this may not be a section you want to shout from the rooftop to potential investors or lenders, it is one of the most useful sections for you as an entrepreneur. Our greatest weaknesses are our blind spots, which we rarely see in ourselves. Most great entrepreneurs surround themselves with people who tell them the good, the bad and the ugly because confronting the brutal facts is the best way to achieve progress on those elements of the business that are holding you back. Novice entrepreneurs hide issues and great entrepreneurs seek to identify issues.
Just as with strengths, weaknesses fall into two general categories: common and catastrophic. Common weaknesses are those that you share with a lot of other businesses, such as start-up hurdles, learning curves, and cash flow. As long as you are generally as good as the industry standard, you’ll likely be okay, although you may not excel. Catastrophic weaknesses are those that consistently put you at the bottom of the pile. Another way to look at it is that common weaknesses are those that can or will be overcome. You will eventually learn how to use your inventory software or hire someone to take over those duties, you will eventually work out an efficient order fulfillment system, and you will eventually have enough money to kick off that dream ad campaign. Catastrophic weaknesses are those that you can’t or won’t overcome. These may include a fatal error in a software program that can’t be remedied, the use of someone else’s intellectual property, coming in second in the race to introduce new technology, and the worst weakness of all, arrogance.
Obviously, doing the footwork for your business plan should help you eliminate many of your common weaknesses before you begin your business or before you continue to the next phase of business. But the identification of catastrophic weaknesses should make you rethink your entire plan. Do you really want to put all of your time and energy into something that has a very high likelihood of failure? Aren’t there other businesses to pursue that have a greater likelihood of success? Some of the best business plans are the ones you throw in the garbage because you learned from them and moved on to a better idea. Fatal flaws usually don’t get better.
Just as with strengths, weaknesses can be perceived by customers and/or
competitors. Your weakness could be in poor product quality, noncompeti-
tive pricing, or lack of variety. Distribution may be your weakness if you can’t
keep your products on the shelves or on enough shelves to have an impact.
Operational weaknesses are frequent killers of great ideas. Many a creative person has thought up a fabulous idea only to be thwarted by the business realties of deadlines, inventory, budgets, cash flow, customer service, distribution, and management. Knowing your weaknesses in these areas going in will help you pick partners and personnel to fill in the gaps. Don’t be afraid to admit you might not know everything. You can always build a team that does.
When you focus on weaknesses, consider that perhaps your weakness isn’t so much ‘ Vour weakness as much as a competitor’s strength. If you are in an industry ruled by one or two brands, it will be hard to break in and then break out with your own brand identity. Advertising is key for brand identity. In order to build your unique identity, advertising needs to be effective and visible. There is a crucial interplay between vision and volume that will ultimately determine the effectiveness of an ad campaign.
Figuring out your weaknesses (or potential weaknesses if you have not vet begun your business) is done pretty much the same way you determined your strengths. Talk to people you trust. Ask these honest and trustworthy people what they think you could improve in your company, your knowledge base, and your interpersonal style. It will be hard to get an honest answer. People who like you may not want to tell you how irritating it is, for example, that you always wait four days to return a call. Emphasize to these people that you need to know now, before you quit your day job and sink your life savings into this idea. Or be honest in explaining that your current business is hitting hard times and that sugarcoating could mean its demise. Never be afraid to goad people into telling you the truth, even by making them feel guilty. It is that important. Of course, when you get the truth, take it gracefully—don’t get all defensive—and be effusive in your thanks so that the people who are honest with you will offer that same frankness if you need it in the future. If you pout and sulk because they suggested that your lack of punctuality is a business weakness, you are shooting your business (and yourself) in the proverbial foot. Getting honest feedback may not be pretty or fun, but if it leads to business success, it is certainly worth it.
Be creative in your thinking. Try to look at every single aspect of your business. Try to imagine your product going from inspiration to sale, step by step, through all the parts of your company, from R&D to construction to employee benefits to management to advertising to sales, all with an eye toward improvement. If you were the competition and had this kind of inside information, how would you use it? If you were an average consumer, what would you want to see done differently? If you were not the business owner, but only thinking of buying the business, what would you want to see changed before you signed on the dotted line? If you were the ad agency hired to promote the business, what aspects of the company would you downplay or ignore? If you were an employee, how would you rate the business?
Create your business on paper. List everything your business will need to
do (or already does). From hiring personnel to maintaining equipment, from
creating a filing system to choosing a system to track your stock—put it all
down on one side of the page. Next put some thought into which areas are
weak and assign a number or letter or stars or whatever suits your fancy to sig-
nify if the weakness is small, medium, or great. Then write out what it would
take to conquer each weakness. Finally, do a simple cost-benefit analysis and
decide which of your weaknesses are worth (in time or money) eliminating.
Some weaknesses you can live with, some you can’t. The bottom line: Look
for weaknesses that lead to lowered sales or increased costs—profit-eaters.
Once you have a good handle on where your weaknesses lie, fix what you
can, decide which weaknesses are truly important to your business, and put
your plan mayebe
them in your plan. Choosing which weaknesses to include in ~,
the hardest part of the preparation process. You don’t want to include so many that your business looks like a failure before it even begins, but you don’t want to have so few as to come off looking like a naive dreamer.
Every business has weaknesses. Seasoned professionals (the kinds you’ll be asking for money from) will be able to look through your business plan and see the holes. If you want to come off as a professional as well—as the kind of person who can take an idea and turn it into a successful business—you need to prove you share that ability to analyze your business needs.
By pointing out what others would find on their own, you prove your abilities. But, more important, putting weaknesses in the plan allows you to show how you plan to eliminate or work around them. You can list a weakness and follow it with a discussion of your plans for improvement, thus showing your problem-solving skills as well as your ability to plan for the future.

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Not All Property
Management Companies
Are Created Equal
In the summer of 2002, owners that we already managed one property for approached me to manage another property for them—the very same property I briefly talked about in my introduction. The 100-unit building was in a very rough part of town. I went out to the property and was shocked on my initial walk-through. Very rarely had I ever seen a property that was so disastrously managed.
There is no doubt that the property faced challenges given its location, but it seemed as if the manager had given up on the building. I could immediately tell that managing this building was going to be a challenge of the first order. Luckily, I enjoy challenges. Because of my relationship with the owners, I elected to take on the management of the property.
The first problem the owners had was they had signed a property management agreement that was fee-based rather than based on a percentage of the income collected. As I indicated earlier, if you are going to use a third-party management company, you should always make sure they collect their income based on the property’s income. It is just too easy for someone to become complacent if they know the money will come in no matter their performance.
Even though I enjoy a good challenge, I still had huge reservations about taking on the task of managing this property. For over two months, the owners and I went back and forth on negotiating terms that would be fair for me to accept the job. There was such a large amount of outstanding unpaid bills that I made it a condition that the owner bring all accounts up to date before we even stepped foot on the property, which they did. We needed this to happen to even have a fighting chance of fixing the problems the property faced.
When we finally did take over the property in March of 2003, we were shocked at the condition and state at which it was operating. Immediately, we walked each of the 100 units. We found significant deferred maintenance. Nearly every unit on the property required a large amount of renovation work, including the occupied units. Not only that, the deferred maintenance was so significant in about forty units that the previous manager had not been able to rent them. The property was only 60 percent occupied. Many of the vacant units required $2,000—$4,000 each just to be rent-ready. In the end, ninety-eight units needed work of one variety or another with a total bill of $106,000!
Because the property was in such a state of disrepair, rents were significantly below market, and once we began to dig into the financials we found some pretty astonishing things. Shockingly, the rent income was about $145,694 below market. Based on a 6 percent capitalization rate, that alone devalued the property by $2.4 million.
Operating expenses were too high as well. The previous manager had not explored any ways to save money. A couple quick phone calls on our part saved about $20,000 annually in operating expenses. Unfortunately, that savings and some others had to go toward expenses to make the property rentable. Even worse, we discovered that the mortgage had been intentionally paid short by about $20,000 by the previous management company, and the lender was threatening foreclosure.
It was the owners’ intention to sell the building since it was such a burden. This, however, was a futile effort. The actual cash flow for the financial year ended up being negative $166,373! That was an operating loss that equated to 4 percent of the entire value of the building. That means that the building was actually unsellable, since as we’ve discussed, value is based on operations. Had they tried, I think the owners would have had a hard time giving the building away.
Once a manager gives up on a property, as the previous manager had, the resident profile will inevitably slip. Such was the case with this property. Desperate to just fill apartments, the manager stopped doing background checks and rented to anyone who came through the door, a last-ditch effort to increase occupancy. Criminal activity got to be so bad on the property that the standard street beat police wouldn’t go there. Instead, they had actually set up a police substation inside the property itself because of the incessant drug activity. Additionally, the police department had rented an apartment and was conducting sting operations on the residents.
As I mentioned in my introduction, one resident was so involved in drug trafficking that he had been paralyzed from one of the many gunfights he had been in and was wheelchair-bound, and he had his wheelchair custom-built so that he could hide an automatic weapon in it. When we first took over the management of the building he was very nice and very interested as to what we were planning on doing to increase security. He was worried how it might affect his business!
We immediately evicted fifteen people when we took over the property because of their involvement in criminal activity, One of my employees went so far as to jokingly suggest we apply for federal funding to become a halfway house for convicted felons. That might have been easier.
We faced a mountainous volume of work when we took over the property. In trying to get the property back to a functioning level, the workload was so intense that I had my corporate office employees keep track of the time they spent on it. The results were astonishing. Following is the actual monthly time and cost of my corporate staff on just this one Time Commitment per Month Cost of Time
March
Asset Manager 60 $1,920
Accounting 56 $1,400
Training 12 $240
$3,560
April
Asset Manager 50 $1,600
Accounting 31 $775
Training 6 $120
$2,495
May
Asset Manager 50 $1,600
Accounting 31 $775
Training 6 $120
$2,495
April
Asset Manager 50 $1,600
Accounting 31 $775
Training 6 $120
$2,495
April
Asset Manager 40 $1,280
Accounting 31 $775
Training 6 $120
$2,175
Let me tell you why this chart is so significant. When I negotiated the property management agreement with the owners, I wanted there to be some safeguards because I knew there would be a lot of work involved. With that in mind, we settled on a management fee of 5 percent of the total income collected, or $2,500 per month, whichever would be greater.
When we took over the property it was generating about $31,000 in total
ncome each month. At 5 percent our monthly fee would have been $1,550. Thankfully, we had a safeguard and collected $2,500. Unfortunately, I still lost money.
Earlier in the book I talked about the things a property’s operating income pays for. One of them is the on-site staff: your manager, maintenance, housekeeping, and leasing agents. It does not pay for the property management’s corporate office staff. Take a look at the chart again. Do you see how on the first month we took over the property the total cost to my office staff was $3,560? That was a direct loss to me of $1,060. From then on it was basically break-even.
All of this was a direct result of the previous manager’s inability to manage the property correctly, and all of this could have been avoided if the owners had done a little more homework and been more prepared in their initial search for a property manager.
In the end we were able to get the building into a much better operating status. The difference was so dramatic that the owners actually changed the name of the building in order to shed the negative stigma of the previous name.
After our hard work, the owners were able to sell the property and even realize a little profit. That would have been unthinkable two years earlier. This is proof positive to me that there is nothing more important to the value of a property than good property management. Think of the stark contrast; one manager had driven the property so far into the ground that it was technically worth nothing, while we took the same property and created value just by implementing sound management principles.
To me there is nothing more tragic that seeing a property’s value destroyed by a manager’s bad performance. Unfortunately, this property’s story is not an isolated case. The responsibility rests on your shoulders to do your homework when hiring a management company. In this chapter we will discuss how you can avoid these mistakes and find a property manager that fits your investment’s needs and manages your property successfully.
What You Need
First off let me say the simplest definition of a good property management company is this: one that sends you a check and never calls. That is the dream of every real estate investor. One of the major advantages about hiring professional property management is that you no longer have to invest copious amounts of energy and time in your property. When you have a property management company that you trust, you let them take care of your asset and they send you the returns. If you feel the need to control every aspect of the property management process, you should just manage the property yourself. Otherwise, you defeat the purpose of hiring a professional company and you are wasting your money. However, this does not mean you should not be managing the property manager.
Though it is easy to blame a property management company if your property is underperforming, the responsibility ultimately is with you. Even if you are not going to manage your own property, you need to have a fundamental understanding of the work and principles that are needed in order to make your property a success and grow in value. You should choose your management company based on an informed decision.
There are many property management companies out there who are dying for your business. A lot of companies will take on your property, even if they don’t have the manpower or the know-how, because they are more concerned about growing their business than creating value for your investment. Not all property management companies will specialize in managing your type of investment. Later in this chapter we will go into detail about the various types of companies, but for now suffice it to say you shouldn’t hire a company whose expertise is commercial management to run your ten-unit residential building.
The first thing you should do when evaluating which company to hire is to evaluate your property needs. Sit down and think hard about what kind of property you own. Make a list of the needs of the property that will have to be addressed by the management company you hire. Some areas to focus on are:
Age
Structures
If your property is older it will need to have a higher level of maintenance in order to keep it competitive.
Some properties will have more than just one building. There might be fountains or sport courts. Another common building would be a laundry facility. All of these will require a company that has knowledge of how to care for these items.
Oftentimes a property will come with equipment that assists with the care of the property, I recently purchased a property that came with a snow plow, a truck, and a car. There were also boilers that provide hot water to the residents. These items are part of the property and will need to be managed and cared for.
The landscaping on a single-family home may take very little work. If you own a larger property, however, it is a major expense and takes a lot of time. If a company doesn’t have the resources to manage your landscaping, your property will suffer. Each state and the cities within those states have varying laws and regulations on the rental industry. Be sure that a company is not just familiar, but well informed about your market and its laws. If you own a larger property, you will have multiple amenities such as pools, fitness centers, and business centers that will need to be cared for on a continual basis.
Determine if your property needs an on-site or off-site manager. determine what kind of accounting functions and reports you will want to see. Make sure a prospective company can meet those needs.
Whether your property is a single-family home or a large multifamily apartment building, there are companies that will specialize in your type of property, Don’t make the mistake of hiring a company just because they want the business. Find the right fit.
Equipment
Grounds
Local laws
Amenities
Administrative Needs
Size
This doesn’t have to be anything extremely complicated. For example, if you own a 100-unit community, you don’t want to hire a company that doesn’t offer on-site management and trained maintenance technicians. Conversely, if you own a single-family house, you probably don’t want to hire a large company that will find it too easy to let your small property fall through the cracks.
Additionally, your property’s needs will vary depending on the region. You may own a large property that would benefit from a large property management company, but if it is in an area where that company’s presence is small, you could be better served by seeking out a company that knows the market and has a presence.
Something as simple as the climate can create dramatic differences in the needs of comparable properties. A property in Madison, Wisconsin, would need to have ways to manage snow accumulation, icy pipes, and slick sidewalks, something a property owner in Phoenix, Arizona, would never have to worry about. If you own a property in a cold weather climate like Madison, it wouldn’t make sense to hire a property management company that operates primarily in the Southwest. There is such a vast difference between the climates that there is no way the company could be as well versed in managing a property as a company that operates locally or regionally.
A good rule of thumb when evaluating a property management company is to make sure that it belongs to local and national trade organizations. Reputable companies belong to trade associations. Belonging to a trade association is an indication that the company is focused on improving its operations. These associations offer training for employees, networking opportunities, and valuable market research that a company can get nowhere else. You can find a list of prominent property management trade associations on the NAAHQ.org and IREM.org Web sites.
I have been involved in the Arizona Multihousing Association (AMA) for years. Every month I send my employees to any number of the training classes that they offer. These classes are invaluable. Additionally, our involvement in the AMA has created valuable networking opportunities with vendors that we have used to negotiate discounted services. This saves my clients money.
The AMA also keeps all its members up to date on changes and proposed changes in the Arizona legal system that would affect how a property is managed. They provide educational forums and seminars on property management law and help me ensure that my employees are empowered with the knowledge they need to comply with those laws.
Trade organizations also provide certifications based on intensive training.

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Types of Property Management Companies
As I mentioned earlier, there are many different types of property management companies. The types of properties you will find companies specialize in are:
• Manages commercial buildings ranging from small offices to large skyscrapers
• Leases to companies, not individuals
• Cares for exterior and common aspects of commercial properties primarily
• Enforces policy
• Generates multiyear leases
• Collects money from companies and manages commercial financial accounts
• May offer space planning and architectural services
• May offer leasing services
• Off-site and on-site management
• Manages common-owned properties such as condominiums, master planned communities, and subdivision housing
• Generally manages only exterior elements such as the landscaping, building exteriors, roofs, parking lots, etc.
• Enforces HOA policies
• Manages HOA accounts, collects HOA dues, and pays HOA bills
• Does not lease
• Off-site management
Commercial
Home Owners Association (HOA)
Mini-Storage • Manages storage facilities
• Offers high level of security to protect individual’s stored belongings
• Takes care of exterior aspects of property only
• Collects monthly rents for each storage space
• Leases on a month-to-month basis
• Enforces storage policy
• On-site management
Shopping • Manages shopping facilities ranging from small
Centers/Retail strip malls to large shopping centers
• As with commercial management, rents to companies, not individuals
• Maintains exterior and common areas of property primarily
• Collects rents and manages financial accounts
• Generates multiyear leases
• Enforces policy
• Off-site and on-site management
Multifamily • Manages medium to large multi-unit apartment buildings
• Maintains exterior and interior of buildings
• Collects rents and manages property financial accounts
• Enforces policies
• Generates monthly to yearly leases
• On-site management
Single-Family/ • Generally manages single-family and duplex
Small Property type investment properties to medium-sized properties
• Maintains exterior and interior aspects of property
• Collects rents and manages financial accounts
• Enforces policy
• Generates monthly to yearly leases
• Off-site management
There are other types as well, but these are the major ones. Each of these prop- erty types has specific needs that require a property management company
I ‘p
well versed in those needs.
Beyond specializing in a property type, companies also differ in their operational capacity, each of which will have its pros and cons:
National/ Pros
International • Large well-established company with name recognition
• Generally has standardized systems and policies
• Generally mandates training and education
of employees
• Will be highly involved with professional trade organizations
• Knowledgeable about legal aspects of management
• Large employment base that can absorb employee turnover
• Sophisticated accounting systems
• Sophisticated marketing systems such as comprehensive Web sites
• Offers on-site management
• Can perform high level of maintenance
• Sophisticated purchasing power
Cons
• Smaller properties such as less than 50-unit buildings can get lost in the fold
• May not have in-depth knowledge of your market specifically
• May not have relationship with local vendors
• Will not manage single-family or duplex type properties
• Often will be very red-tape oriented
Regional
Pros
• Will specialize in the local market
• Has well-established network of local vendors
• Tendency to be more enthusiastic about small properties
• Will generally be involved in the local trade association
• Understands local legal issues
• Will have good systems and policies
• Locally established and good reputation
• May offer more personalized service
• Offers on-site management
• Can perform basic to medium-level maintenance
Cons
• May not be able to absorb the loss of key employees
• May not have the capability to manage large multifamily buildings
• Cannot manage effectively outside its region
• May not have strong training or education programs
• May be eager to grow, and will take on properties regardless of qualifications to manage them
• Single-family and duplex type properties may play second fiddle to larger clients
Mom-and-Pop Pros
• Tends to specialize in single-family and duplex type properties
• Highly personalized service
• Good knowledge of local market
• Less expensive than larger companies
• Can perform basic maintenance
Cons
• May not have sophisticated systems
• Cannot absorb loss of employees
• May be eager to grow, and will take on properties regardless of qualifications to manage them
• May not offer training or education to employees
• Cannot manage medium to large properties
• Does not offer on-site management
Realty Company Pros
• Tends to specialize in single-family and duplex type properties
• Will have good knowledge of local market
• Will have sophisticated marketing systems such as Web sites
• Less expensive than larger companies
Cons
• Management not primary focus of business
• May not offer training or education
• Cannot absorb loss of employees
• Cannot manage medium to large properties
• Does not offer on-site management
• Will not be involved with trade organizations
• Will outsource most maintenance
Owner/Resident Pros
Management • Least expensive form of management
• On-site
• Can be used for smaller properties
• Can perform low-level maintenance
Cons
• Will not have professional training or education
• May not be fully aware of legal issues
My company specializes in large multifamily management in the Southwest. I get offers all the time to manage outside my specialization. I always say no. In my previous book, The ABC’s of Real Estate Investing, I wrote extensively on the importance of setting goals. I believe that “goal power” is the key to success. When it comes to my management company, my goal is to be the most successful property management company in the Southwest.
Earlier in the book I talked about the property that we purchased in Oklahoma City. I had no desire to manage that property so we turned to local professionals. Attempting to manage the property ourselves would also take the focus off my goal of buying property. My Oklahoma City property is part of a different, but complementary, goal to be financially free.
As an investment property owner, you need to begin your search for a property management company by evaluating what type of property your investment is and what its specialized needs are, and then find a property management company that fits well with those criteria. It is an important decision and one that will take a little bit of research on your part. As with all good investments, if managed well, yours will reap great rewards down the road.
• Not primary source of income
• Lacks sophisticated systems
• Lacks local contacts with vendors
• Will not be involved with trade organizations
• Can be unreliable

Tags: accounting, assertiveness, certificate, commercial buildings, commercial management, exterior elements, financial accounts, hoa dues, home owners association, involvement, leasing, leasing services, many different types, master planned communities, mini storage, owned properties, preliminary research, property, property management companies, retail strip, skyscrapers, space planning, storage facilities, storage policy, storage space, strip malls, unit apartment buildings

here are three things that make a company great: their employees, their systems, and their structure. All three of those things have to be polished and excellent in order for any company to be successful. You cannot have one without the other. If you have the best employees in the world, they will do no good if sound systems aren’t in place for them to operate in. A great manager cannot be successful if they don’t have accounting support. Conversely, systems only work if a company has employees that are trained and can utilize those systems to create value. A company’s structure allows for seamless interaction between an employee and the company’s system. Structure allows an employee to know their role and to focus on being successful.
Employees
TRAINING
When you are evaluating which company you will hire to manage your property it can be easy to forget that you aren’t hiring just a company. You are hiring the people within that company. That was the mistake the owners of the West Phoenix property made. They hired a company that had a good reputation, but did not look past the macro to the micro. An interview with the person that was going to be actually on the ground, managing their investment, might have caused them to think twice. I would go so far as to say that the individual a company uses to manage your property is more important than the company itself. After all, you will be dealing primarily with the manager, not the company.
One sign that a company has good employees is the level of education they provide. All of my employees have monthly, ongoing training. I invest in my employees, knowing that the investment will foster growth in both my business and in my employees.
Take a close look at a prospective company’s training systems. A good company will have a training program that focuses on creating top-notch property management employees. For instance, Equity Residential, one of the nation’s largest management companies, has its own “university.” Through Equity University, the company ensures that all its employees attend and graduate from an intensive and standardized training program.
Other companies will utilize corporate trainers. I bring in a corporate trainer every month to work with my managers. She specializes in developing management skill sets in a fun and interactive way.
You might assume that all companies take the time to train and educate their employees. Unfortunately, that is often not the case. Too often companies leave it in the hands of their employees to train themselves. Beware of a company that doesn’t standardize and require training.
JOB SATISFACTION
Take a look at the management company’s employee retention. A good company attracts and retains good employees, If there is a lot of turnover in a company, you can bet there is something going on internally—and it probably won’t be good for your investment. Good companies know the value of their employees and strive to keep them happy and therefore with the company. I learned the value of this lesson firsthand.

At one point we converted one of my properties in Las Vegas from apartments to condominiums. When the property was almost sold out we contracted a home owners association to manage the property. An HOA is a little different from a multifamily management company in that they only manage the common area of the buildings since the units themselves are owned by individuals. HOA companies need to be well versed in legal and financial systems that are quite a bit different from other management types.
My company doesn’t perform HOA management, so we hired a company to do it for us. It was a disaster. I knew we were in for trouble when the manager quit a week after we hired the company. Then the new manager quit a couple months later. Both managers quit because of internal structure issues. They were frustrated with the company, which made them frustrated with their jobs, which made them leave.
Owners on the property started to grumble about the lack of maintenance. If you think it would be bad to deal with one angry owner, try 340 of them. HOA meetings turned into three-hour-long complaint Pests, as one owner after another came forward. Over the course of time this company was under our employment, we had five property managers come and go. Finally we said enough is enough, and fired them.
Systems
Earlier in the book we went into detail about sound property management systems and how to implement them. If you aren’t planning on managing your own property, then you had better be sure that the company you hire is firing on all cylinders when it comes to property management systems.
POLICIES AND PROCEDURES
One of the best ways to get a feel for a company’s level of professionalism is to take a look at a company’s documented policies and procedures. In my company, every manager on-site has a copy of a standardized policy and procedure manual. They are expected to know it by heart, educate their staff about it, and enforce the policies contained within it.
ACCOUNTING
Though a manual is good for detailing on-site operational systems, it is important to determine what kind of systems a company has in place for accounting as well. If a company doesn’t have an excellent, autonomously functioning accounting department, you can bet for sure that the employees on-site will not be able to do their job effectively.
I thank my lucky stars that when I first started in the property management business my company had excellent corporate accounting and support systems in place. Having those taken care of allowed me to focus on managing my properties without worrying about the accounting details. I collected the rent and paid the bills, while accounting produced reports for me that enabled me to make informed and effective decisions. I wouldn’t have survived without them.
Structures
The structure of a company determines its ability to operate successfully. I can think of nothing more important when it comes to a company’s structure than depth. You should be leery of a company that cannot absorb the loss of an employee in any of its departments.
Accounting is the most apt example for this. As an owner, the single most important correspondence you will receive from a property management company will be your monthly and annual financials—the report card. By now you know how important financials are. They tell the story of whether your property is succeeding or not, whether your investment is growing your wealth.
Financials are produced by the accounting staff at a property management company and should be sent to the owner by the 15th of the following month at the latest. When I first started in the property management business my company consisted of myself and an office manager that knew how to do accounting. Most property management companies that you will come across are small like mine was. Generally they will have two to five employees. In the early days, if my accountant were to leave at the end of the month, there would be no way that I would be able to get the financials out to my clients. I would have had no way to absorb the loss of my accountant.
In larger companies, however, the loss of a key employee is not nearly as crippling. The same accountant that I had in the early days of my company is still with me. She is now my regional accounting manager. She has been with me for over fifteen years, and is a major part of the growth of my business. God forbid she ever left, but if she did, my company would still function smoothly. She manages competent people who could step up and help, and my CFO could oversee the process. Financials would still be sent to my clients on the appointed day, and as far as my company’s operations are concerned, they would never know the difference. In a large company, even the loss of a key person can be absorbed and business will function as normal. That is not the case with smaller companies.
Don’t get me wrong, I’m not saying, “Don’t hire a small property management company.” Obviously, if people had followed that line of thinking I would never have gotten off the ground myself, and you wouldn’t be reading this book. For the record, there are a lot of quality small property management companies out there, and one of them may fit the management needs of your investment property perfectly. While depth will be an issue with these companies, that doesn’t mean that the benefits of a small company won’t outweigh the disadvantages.
For example, if you own a single-family investment property as my in-laws do, a large property management company won’t be your best bet since they are most likely managing large multi-unit buildings. In some cases they wouldn’t even consider taking on a single-family house. Such is the case with my company. The reason is that it would be too easy not to give your investment property the attention it deserves. It would often get put on the back burner. If I had an issue with a multi-unit account that brings in $5,000 per month in management fees and an issue with a single-family house account that brings in $ 100 per month, which property do you think I’d focus on? In the case of a single-family property, a smaller management company would be much more inclined to give your property the attention it would need to be successful. I can’t stress this enough: You should always hire a property management company based on what fits the needs of your property.
Finally, one last thing to take a look at when evaluating a property management company is the stability of its portfolio. Do they have properties that they have been managing for years, or is their portfolio a revolving door? You can bet that a management company whose portfolio is always shifting is probably not offering a satisfactory level of service.

Tags: accounting, agent, certificate, conversely, education, equity residential, good company, good reputation, industry, involvement, leasing, management companies, management employees, marketing, mistake, ongoing training, phoenix property, preliminary research, property management, property management companies, prospective company, s system, seamless interaction, system structure, top notch, west phoenix

You should have a pretty good understanding of the amount of work and effort that is involved in managing a property and whether it is for you. We’ve discussed the qualities you must have or develop—most importantly, assertiveness. You have analyzed your working situation and determined whether managing your own property is a reasonable and cost-effective use of your time.
If you decide that managing your own property is not for you, you now know the attributes you should look for when hiring a property management company. You’re now equipped with the tools to scrutinize another property and compare management companies’ systems. In this chapter, I will show another invaluable method for researching potential property management companies,
In that section, I showed you my own personal method of researching, which I group into three easy-to-define and easily understood categories:
Level 1 Research
Level 2 Research
Level 3 Research
Preliminary research that you can do from your own home. This would include Internet and publication research.
If Level I research leads you to like what you see, Level 2 research will be needed. This is the stage where you meet face-to-face with people in the know. Level 2 research is invaluable in verifying the information you gathered in Level 1. Level 3 research involves utilizing the experts you have already assembled on your team. Call them and run your information past them. They will give you valuable insights. This will allow you to remain objective and keep perspective.
Our intent in Portland was to purchase an apartment building and operate it through third-party management. Knowing my goal for my company to be the best property management company in the Southwest informed my decision to hire a company to manage the property in Portland.
If I spent so much time and energy in researching the property itself, why wouldn’t I spend the same amount of energy in researching who I would choose to manage my valuable asset? That is exactly what I did, and I used the three levels of research in my investigations.
Level 1 Research Finding the Players
Level I research is the preliminary stage of your process. By now you have profiled your property and determined its needs. You are ready to begin searching for property management companies that will be the best fit.
When I was first looking for a property management company for our Portland property, I started with the Internet. I love the Internet. I can’t imagine how I functioned without it. At the tip of my fingers is access to incredible amounts of useful information that would have taken weeks to assemble a few years ago.
I started my online search with the local apartment association, the Rental Housing Association of Greater Portland (RHAGP). Just by going to their Web site I was able to access the contact information of over fifteen local property management companies. I printed out the page listing them and put it in my file.
Also on the RHAGP Web site I was able to read through the local newsletter and get a feel for the players in the local property management market. I printed out back copies of the newsletter and put those in my file too, to read on the plane. I used those for my Level 2 research in order to help me narrow down my list of whom to meet when I visited the city.
Not wanting to be limited to just local property management companies, I also visited the Web sites of some regional and national companies, such as Equity and HSC. Through browsing their Web sites, I was able to determine that each one of these companies had branch offices in Portland staffed with account representatives that I could meet with. I was also able to get a general history of each company, an idea of its business philosophy, and a listing of the properties that it managed in the Portland area. I took down the contact information and addresses of these apartments so that I could tour them while I was in Portland and contact their owners.
Contacting a property owner is an invaluable tool in your search for a property management company. It’s a safe bet that someone who is entrusting the value of their investment to a property management company will shoot straight with you when you ask them about the performance of that company In this case, one of the owners informed me that he was looking to make a change and was not happy with a company’s performance. I was able to confirm this feeling with a few different owners and used that valuable information to scratch that company off my list. Remember the old saying, “You have not because you ask not”? When it comes to real estate, asking an expert a simple question can save you millions of dollars.
Now that I had a good handle on the players involved in the Portland rental market, it was time to focus my list and decide who I wanted to meet when I traveled to the city for my Level 2 research. Again, I accomplished most of this from the comfortable confines of my office chair through the magic of the Internet and my phone.
The local property management companies that I had found online all either had a Web site or a phone number. By calling or browsing their Web sites I was able to determine which companies may be a good fit for my property and which would not. Once I had my list of companies that I was interested in, I called each of them and set up an appointment with one of their account representatives, letting them know I would like to meet them at their office.
Level 2 Research—Meeting the Players
The first thing I did when I arrived in Portland was … grab one of the famed local beers. Level 2 research is a blast. You get to travel to awesome cities and meet incredible people, and it can all be written off as a business expense. To me there is nothing more exhilarating than being able to travel to a new area, meet new people who will help me achieve my business goals, and either confirm or realign my thinking about a certain market,
As I mentioned, I had set up appointments to meet with property management companies before I even left for Portland. I had three companies in mind to manage the property and planned on spending a day with each in order to observe and to really sink my teeth into their operations. I had very clear objectives in mind and very specific things that I wanted to observe.
THE OFFICE VISIT
When looking to hire a company you should always visit its offices. This isn’t about cosmetics. Who cares if it has green carpet and you prefer gray. Visiting an office is all about observing the way in which the business operates. It is also an opportunity to review some documentation that will be vital in your decision-making process.
Keep your eyes open, and observe the office staff. Does it seem organized or chaotic? Is there an air of professionalism, and are the employees dressed neatly? Check to make sure there is a clean and efficient filing system. One company I visited had files stacked on tables. Needless to say I was not impressed. If a company can’t keep their paperwork in order, they definitely won’t be able to keep your investment in order. All of these small visual clues will give you insight as to how the company will manage your property.
Ask to use a conference room and sit yourself down with the employee manual and the property policies and procedures, Read them thoroughly and ask any questions that you might have about what, and what might not, be included in the material. Don’t be afraid to ask the tough questions. This is not a time to be timid. This company may be managing your valuable asset and you should investigate and learn as much about it as possible.
Meet with the manager and asset manager that will be assigned to your property should you hire the company. Remember what I said earlier, even more than the company itself, you will be hiring the people that will be physically working on your property. Ask them about their certifications and their experience in the industry, and ask to see proof and a list of references.
Inquire into the education systems that the company has in place and determine whether they are current in their involvement with the local trade association. Have them explain their philosophy when it comes to training. Oftentimes, when employees take training or an educational course they will receive a certificate of completion. Ask to see those certificates for the people who would be working on your property. You would be surprised, but a lot of times a company will say they are actively training their employees even when they aren’t. Don’t just take a company’s word. Trust but verify
Of course you’ll want to review the company’s accounting systems. These should be spotless. Don’t get involved with a company that doesn’t have a solid accounting staff. Determine what software the company is s using. An added benefit of hiring a management company is that they should have sophisticated financial software in order to provide you the owner with a high level of financial service. If they are running reports only through a rudimentary Excel spreadsheet you might want to think twice.
Talk with the accounting manager. Ask them what types of reports you will see on a monthly and annual basis, and get a feeling for their experience level and education, as well as that of their staff.
Find out what kind of financial services the company provides. Do they pay your mortgage for you? Do they handle the insurance and tax impounds? The more sophisticated the accounting systems the more likely you will be able to enjoy your investment hands-free, and that will allow you to follow Clubhouse
Staff
• On larger properties there will be a clubhouse that generally contains common areas for residents to use and houses the staff offices.
• Ask yourself what kind of first impression you get by walking into the clubhouse. Is it clean and free of clutter?
• Is it clear where the rental offices are, or do you have to hunt around hoping to find someone? Nothing is worse than a potential resident who has been touring apartments all day becoming frustrated because they can’t find a leasing agent.
• Observe whether there is rental material out for potential residents to review such items as floor plans, brochures, and rental pricing.
• When you walk into a rental office, someone should approach you immediately.
• Observe the staff, taking note of their appearance and demeanor. A good company will have employees who are professionally dressed, energetic, and give the impression that they are genuinely excited to show you the property.
• If you have a chance, observe the way in which the staff interacts with residents when they come into the office. A good way to do this is by shopping a property on the first of the month. Everyone will be coming in to pay rent.
• Ask lots of questions. Make sure the employees are well versed in not only the property but also the company’s policies and procedures. Unless they are newly hired, if a leasing agent can’t even tell the rent on the property floor plans without referring to a cheat sheet, or tell you how many units the property has, that may be a troubling sign, Collateral/ • On larger properties there will generally be
Marketing Materials marketing materials such as brochures, flyers, and business cards.
• Make sure these material are professional-looking, and not poor copies that appear in-house, Collateral is a huge factor in making a solid first impression. Never forget that people are not just renting an apartment, but a lifestyle.
• The marketing materials should be placed in an open and readily accessible place.
• Verify the accuracy of the marketing materials. Nothing makes a worse impression than having a leasing agent tell you that a rental amount or lease special is different from what is printed. Not updating printed materials is a serious sign of laziness.
Tours/Models • The most important factor for a prospective resident in determining whether to rent or not will be the model walk or touring of units.
• Make sure that the person who will be touring you gets all your information and fills out a guest card.
• Ask to see the models or the units for rent and Observe the sales presentation.
• Observe the condition of the models or units. Are they clean and stylish? Do they get you excited about living at the community, or are they forgettable?
• Is the person touring you commanding the tour, or do they seem uncomfortable?
• Again, ask lots of questions. Don’t interrogate them, but do pay attention to whether the employee remains attentive to your questions or whether they seem to be getting impatient.
• After the tour, the leasing agent should have immediately tried to get you to lease. The hard close.
Office
• While you don’t need to apply for an apartment, you should show interest and sit down with the leasing agent.
• Observe the condition of their offices. Are there files stacked everywhere, cups of half-finished coffee, and papers littering the desk? Do they have to make a space for you? Any signs of disorganization are bad.
Once you have visited the property management offices, talked to the staff, received advice from other owners, reviewed the policies and procedures, and shopped or visited sample properties, you will have a pretty good idea of who will be a good fit to manage your property. Now you should grab one more of the local brews or visit one more local attraction and head back home to begin the third level of research.
Level 3 Research —Picking Your Player
You can think of picking your management company like the NBA draft.
NBA players are valuable commodities. Think about all the work and preparation that goes into scouting an NBA player. Some teams follow a basketball player from the time they are in high school all the way through college—if they go to college. In some rare cases, players are scouted from junior high and on.
Teams will send scouts all over the country, paying them high salaries, keeping them in fancy hotels, and feeding them steak dinners. All this is done so that they can determine which player the team will eventually draft in order to pay even higher salaries, provide stays at even fancier hotels, and pony up on even steak-ier dinners. NBA teams will spend a lot of money in research just to try to pick the one player that will take them to the next level.
Why all the fuss? The NBA is a billion-dollar business, and the stakes are high when they get to the draft table and it’s their turn to pick a player. You may think that the player salaries are out of control, and you might be right. The fact of the matter is that the players make the owners insane amounts of money—if they play well. All the money a team invests in researching players comes back many times over if they make the right pick. Unfortunately, the odds aren’t that great.
Thankfully the odds are much better when you are picking a property management company, but the stakes are just as high. If you don’t do your research correctly or neglect to do it at all, then the results could be staggering. Remember the property in West Phoenix that my company took over because of our business relationship with the owner? That property was just 100 units, yet it cost them millions of dollars. They didn’t draft the right player, and the property failed because of it.
When hiring a third-party property management company I cannot stress enough how imperative it is that you make a wise, well-informed decision. That is why it is vitally important that you consult your team. Don’t just go by your observations. You need another set of eyes. That is just a sound business principle. Even in writing this book, I had a dozen close friends read the drafts and give me their honest opinions. If I had just finished a first draft and said, “This is as good as it can be,” I wouldn’t have felt good about the final draft.
Level 3 research is the time when you will be able to run your findings by your team of experts. Talk to your property management expert and show them your thought process on the companies that you will be picking. They may have some valuable insights that you might have missed. Have a lawyer review contracts. They will be able to help you avoid any hidden traps. Call and talk to industry players in the market where your property is located. They will have a good knowledge of the local companies and will be able to confirm or modify your findings. just by doing this, I guarantee you will be able to remove some companies from your list, and feel just that much more confident that you can make the right choice for the new player on your investment team.
And thank goodness that the cost for your research is a minor fraction of the cost an NBA team spends in their scouting. The biggest costs are the plane ticket and the hotel. These are a small investment for how many returns a solid property management company will afford. I love the process of researching, and I think you will too.
The Management Contract
Once you have completed your three levels of research and settled on the management company for your property, you will come to the hiring stage. This will involve negotiating the management contract.
First off, you should always have an attorney review any contract that you are going to sign. An attorney will be able to tell straightaway whether a company is trying to fleece you with hidden clauses or trick fee structures.
That said, there a few things that you should definitely keep an eye out for when evaluating a property management agreement.
FEE STRUCTURE
Be sure never to sign an agreement with just a flat fee structure. If a management company is not willing to put a stake in the financial success of your property, chances are they simply aren’t worth the paper their contract is written on. A company that charges a percentage fee of the income collected will be motivated to collect as much income as possible. That will mean more money in their pocket—and yours. That’s what I like to call a symbiotic relationship.
Also, it’s important to remember that the percentages will vary depending on the market your property is located in. If all the property management companies in a market are charging around 6 percent for a 100-unit building, it will do you no good to try to negotiate the fee down to 4 percent. It is your responsibility to know the market your property is in and determine what a fair percentage is.
ACCOUNTING SYSTEMS
Be sure the contract is clear on when rent will be collected, when it will be deposited, and where. It is important to make sure that your money will not be commingled with any other property’s money in the management portfolio.
Determine if the agreement is clear that you will have financial control over the property, and that you can set the guidelines on spending habits for the property. Most likely according to the approved budget, there should also be clear expectations for when and how the management company will report to you on a monthly and annual basis with financials. Dates should be clear as to when all financial reports are due, and it should be no later than the 15th of each month for the previous month’s operations. Be clear on the fees that should be collected and the dates on which they should be collected.
RESPONSIBILITIES
The management agreement should spell out clearly the responsibilities of the management company, and should have legal language for you as the owner if those responsibilities are not met. Remember the importance of getting everything in writing. Don’t settle for generalizations. It will be much better for both you and the company you are hiring if the expectations are detailed in the management agreement.
EXPIRATION
Finally, it is important to have a clear timeline set in the management agreement. Don’t sign multiyear agreements that lock you into a contract with penalties for early cancellation. The term of the agreement should be comfortable for you and match the needs of your property Make sure to note whether the management agreement has an automatic renewal clause. These are not necessarily bad in themselves, but you as the owner should remember the date so that you can review the performance of the company throughout the year before the contract renewal goes into effect.
Owner and Management Company: A Symbiotic Relationship
In the end, remember that you are responsible for your property and how it operates. A good management company will go a long way in taking the burden off you, but don’t think you can disappear from the picture and blame the management company if something goes wrong.
Part of the beauty of having a professional management company run your property for you is that you don’t have to sweat the details. Rather, you can focus on the few things that interest you such as financial review Make sure to meet frequently with your management team, and have them give you property updates so that you can address any concerns about the way in which your property is being managed.
If you follow these steps and do your homework, you will be able to enjoy the symbiotic relationship of owner and management company. Your investment will grow in value, and you will become freer to follow your passions while your wealth multiplies. I can’t think of anything better than that.

Tags: accounting, agent, apartment building, assertiveness, attributes, best property management company, certificate, education, factor, good understanding, industry, insights, involvement, leasing, level 1, level 3, marketing, objective, personal method, perspective, preliminary research, property, property management companies, publication research, southwest, third party management, training

The main trends and styles of antiques (3)

Neo-classicism (1760-1830)
The term neo-classicism is given to a trend in art that arose in the late eighteenth century. It was a reaction against the rich embellishment of Baroque and playfulness of Rococo. The name points to the inspiration derived from classical art that resulted from archaeological excavations in Rome, Pompeii, Herculaneum, and Paestum. It meant a return to classical forms of straight lines and level planes.
Symmetry became important once more and classical ornaments and geometric shapes such as ram’s heads, bull’s and lion’s faces, plaited braid, tendrils, rosettes, and urns replaced the overblown style of the preceding period. Neoclassicism became less important after 1800 with the arrival of the Romantic. Despite this the trend continued to be of considerable influence because it was taught at academies throughout the nineteenth century.
Louis XVI occasional table.
The playfulness of Rococo became less fashionable during the reign of Louis XVI and the scallop motif disappeared. Symmetrical ornamentation was added to classical motifs such as corbels, olive wreaths, egg and tongue moulding, and sphinxes. Furniture parts such as arms and legs once more acquired their own identity. ook comfortabel. Furniture was rectangular and flat-fronted. Seats were both fine looking and comfortable. Chair legs that resembled fluted columns were very popular. Light colours were popular during the time of Louis XVI. White lacquer and gilt were commonly used. There was considerable emphasis on elegance, smallness, and gracefulness. Sevres porcelain, East Asian lacquer work, and miniatures were signs of a cultivated taste.
Directoire
Directoire is the name given to the style during the era of Napoleon’s coup d’6tat (1795-1799). The style was in reaction to Rococo/Louis XVI and saw a return to more straightforward classical forms. At the heart of the Directoire style lay the classical style of ancient Greece. Symbols of the French Revolution such as the Cock and Virgin were associated with this, together with the Tricolour. The Directoire style mainly manifested itself in clothing and ornaments.
Empire
The Empire style relates to the fashion for furniture and interiors during Napoleon’s rule (1799-1815). The style originated in France and was also popular in Europe and the USA. The classical inspiration was mainly derived from the time of the ancient Roman empire. Certain ancient Egyptian elements are also sometimes used, resulting from Napoleon’s expedition to the Nile (1798). The Empire style was characterised in furniture by rigid symmetry, rectangularity, and solidity. Characteristic motifs that were used for decoration include the eagle, lion, sphinx, Neptune’s chariot, urns, and quivers filled with arrows. The heavy and solid furniture can be recognised by its plain lines and flat planes.
Regency
The English Regency style arose during the rule by the Prince Regent (later George IV) during the illness of his father George III (1811-1820). In common with French Empire style, English Regency is inspired by classical culture and for this reason some call it English Empire.
Eclecticism and the neostyles (1830-1880)
Eclecticism is a term used in visual arts when techniques, motifs, and elements from earlier styles are combined to form a new one. Eclecticism existed in the time of the ancient Greeks. Late in the Hellenic era Greek artists and craftsmen were already borrowing from the styles of older works. Elements for compositions were chosen from very different eras. Eclecticism became a strong movement in the nineteenth century with the re-emergence of older styles. Expression of these styles such as neo-Baroque, neo-Gothic, neo-classicism, and neoByzantinism were to be found into the twentieth century.
Victorian
During Queen Victoria’s long reign (1837-1901) the predominant influences in Britain on arts and crafts was the rise of the industrial middle class. House interiors were fussy and richly decorated with floral motifs and other adornments. The main intention was to display how well off the occupants were. Victorian furniture designs are typically comfortable. The excessive carving of the early Victorian era was later replaced by painted panels.
French Restoration
The style of the French Restoration originates from immediately after the fall of Emperor Napoleon I when the Bourbon monarchy was restored to the throne (1815-1830) in the form of King Louis XVII and Charles X. The style is characterised by rounded and curved forms. This was the era of Biedermeier in Austria and Germany.
Louis-Philippe
During the reign of King Louis-Philippe of Orleans (1830-1830) there was a revisiting of the style characteristics of Gothic and the Renaissance. A consequence of this is that furniture from this period is more massive and robust in style than during the Empire period. In common with German Biedermeier this period did not see a new style develop, rather adaptation of elements of the Empire style for the interiors and furniture of an increasingly bourgeois society.
Second Empire
The Second Empire was a poor reflection of the first. The classic beauty and grandeur of the clean lines of the period of Napoleon I were barely ever attained anywhere during the reign of Emperor Napoleon III (1852-1871).
Biedermeier
Biedermeier is a decorative style originating in Germany in the period 1815-1848. The name comes from Gottlieb Biedermeier, a nineteenth century fictional character of the poetry of Ludwig Eichrodt. Biedermeier was the typical sober but hypocritical bourgeois citizen.Biedermeier style was a reaction entirely different in style.
to the Romantic style of the Napoleonic era.
The bourgeois conservatism of Biedermeier was expressed in interior design, the visual arts, fashion, and literature. Interior style that was dominated by gentle curves and French polished wood was a bourgeois interpretation of the Empire style. Many decorative elements were borrowed from earlier styles.
Romanticism
Romanticism was a spiritual trend in the later eighteenth and early nineteenth centuries. It was a reaction against Rationalism and its logical expression in the form of neo-Classicism.
With Romanticism, arts and crafts became the expression of creativity and emotions of the artist and craftsman. Romanticism found little headway in France because of the strong influence here of neo-Classicism. Romanticism Late Swiss Jugendstil electric lamp. Note the had its greatest influence on music, paint- colour and design of the glass. ing, and literature.
Jugendstil and Art Nouveau
Around the turn of the century from the nineteenth into the twentieth a movement arose against the historical and bombastic attitudes of the ‘neo-styles’. This trend was expressed through contemporary designs with flowing lines, new materials (iron and steel, glazed pottery, tiles, and concrete), and motifs taken from nature (flowers, animals, and other plants). Architectural and interior design was united into one cohesive style. These innovative movements appeared more or less simultaneously throughout Europe and quickly spread to USA and the colonial territories. The individual styles vary from country.Arts and Crafts
The first manifestations of the movement appeared in England around 1860. The Arts and Crafts movement was a reaction against industrial mass production and sought to restore craftsmanship to the making of objects.
The Arts and Crafts movement made a logical link between the form and construction of a piece and introduced a new type of floral design.
Art Nouveau
IThe innovative and renewing movement in France and Belgium was known as Art Nouveau after the opening of the gallery of Siegfried Bing in Paris in 1895. Art Nouveau also placed an emphasis on hand-crafting of objects. The movement was characterised by extravagant and fashionable design with ornamentation to the fore. Wide use was made of organic elements such as flowers and other plants and animals.
Jugendstil
The name Jugendstil is derived from the German periodical Die Jugend that was started by a group of leading creative people in Munich in 1896. Flowing lines and organic forms are characteristic of the style. Jugendstil also placed great emphasis on materials used and craftsmanship.
Sezession (Viennese Secession)
The new movement manifested itself within the Austro-Hungarian empire as the Wiener Sezession (Viennese Secession) which held its own exhibitions for more progressive artists. The Sezession is mainly characterised by decorative use of geometrical motifs.
Nieuwe kunst
The ‘new art’ of the movement sweeping Europe became known in the Low Countries as the ‘Nieuwe kunst’ — having precisely that meaning. It was also known as the ’salad dressing style’ after a salad dressing manufacturer based in Delft used Jugendstil motives for his advertising and product labels. In Flemish speaking parts of Belgium the style was known as ‘Palingstijl’ (eel style).
Art Deco
Art Deco was the principal style of applied art between about 1910 and 1940. The same term was used for this style in use in architecture, sculpture, and painting. There were two main movements within Art Deco. The first was centred on Paris and was richly decorative; objects were generally hand made from luxurious materials. The other movement saw links between Austrian and Scottish Art Nouveau, and German Bauhaus. This type of Art Nouveau sought to create undecorated objects of simple and functional form and was mainly aimed at mass production. New materials were put to use in Art Deco such as metal and glass for furniture. Plastic was used for smaller objects, including jewellery.

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