I have added a section to my web site regarding buying and selling Virginia businesses.  I have handled many transactions for clients on both sides and thought it would be helpful to lay out the process. 

There are five basic steps whether you are buying a Virginia business or selling one.  The steps are different, of course, depending on which side of the transaction you are on.  Check it out and, if I can be of assistance with your Virginia transaction, just let me know.

If you have employees that earn the minimum wage, their hourly wage went up today to $6.55 per hour.  Previously, the minimum wage under federal law was $5.85 per hour.  Effective today, July 24, 2008, it has been raised to $6.55 per hour and you should adjust your payroll accordingly.  It is also worth noting that the minimum wage will rise to $7.25 per hour next year.

Now that we’re into 2008, business owners should be aware of several tax changes for the new year that will affect your finances when it comes time to file your 2008 taxes. 

• the social security taxable wage base is now $102,000 (versus $97,500 for 2007)
• the maximum deductible limit for IRA’s (traditional or ROTH) is now $5,000 (up a thousand from 2007)
• the business mileage deduction is now 50.5 cents per mile (up two cents per mile from 2007)
• the standard deduction has increased - for married filing jointly it is now $10,900 and for single/married filing separate it is $5,450 (a slight increase of $200 and $100 respectively)
• the personal exemption is now $3,500, up a hundred dollars; and
•  the annual exclusion for gifts given remains the same as last year at $12,000

Knowing these changes now may help you take full advantage of them during the year.  If you are aware of other tax issues that affect you every year, check the IRS web site at IRS.gov to see if there has been a change or consult with your CPA.

I have previously provided my Top 5 Secrets Landlords Don’t Want You to Know list and thought I would provide another Top 5 list of the biggest mistake I see potential tenants make when they’re trying to find space for their business.  If you can avoid some or all of these mistakes, you’ll be way ahead.

The Top 5 Mistakes I see potential tenants make are:

1. Not forming a LLC or corporation first.  You should go into negotiations with your separate entity already formed and ready to be named as the lessee.  If you can avoid a personal guarantee, you’ll sleep easier at night.
2. Not knowing what to ask for from the landlord.  Do you want to abate the rent until you open for business?  Do you need financial help with the construction costs?  You need to think through what you will need before you sign the lease, after which it is too late.
3. Not understanding the terms.  What is a triple net lease?  What services will the landlord provide and which services are you responsible to provide?  If you haven’t negotiated a lot of leases, the terms can be confusing.  Make sure you understand all of them before signing anything.
4. Not being willing to walk away.  There is a lot of commercial space out there and you should be willing to move on to the next opportunity if you can’t agree on terms that make sense to your business.  Often, an entrepreneur will make changes to his or her business model to fit the lease - that’s backwards.  If you believe there is only one perfect location for your new business, then I would seriously consider a new business. 
5. Not understanding the costs of build out and start up before signing the lease.  Getting construction sticker-shock after you have signed the lease is a terrible, terrible thing.  Make sure you have a firm handle on the projected costs of getting your proposed location open BEFORE you sign a lease.  Once you’re in, you’re in and the landlord is not going to be sympathetic when you can’t make the rent payment because of your oversized start-up costs.

Keep in mind that in most commercial lease situations, the landlord and its agent will have much more experience than you.  They do this type of work everyday while most entrepreneurs will only negotiate a handful of leases in their working life.  This makes it crucially important to have experienced help in the form of a real estate agent and/or lawyer on your side to make sure you get the best deal possible.