Accescompetences.com | Business – Financial News

Copyright 2008 IPS – Inter Press Service/Global Information Network

BEIRUT, Lebanon, Feb 6 2008

The year 2008 has already been grim for most Lebanese businesses: Struggles with the nation’s permanent protest movement, security problems, a brief war in a Palestinian refugee camp and sporadic bombings have brought the nation to its knees.

Most recently a bomb tore through the bustling Chevrolet area on the outskirts of Beirut on Jan. 25, killing Captain Wissam Eid from the Internal Security Forces.

As the political situation tips further in the direction of widespread insecurity, however, Lebanese businesses around the country are clinging to the motto, “the show must go on.” Expansion seems to be the word on the street in Beirut, no matter what the uncertain future may hold.

ABC, a major department store and mall with seven outlets, two main flagship stores and a staff of more than 1,000 is currently revamping one of its main branches in Dbayeh.

“In March, we are also launching a new section extending over an entire floor of 8,000 square meters dedicated to children, dubbed Kidsville. It will also include a 500 square meter playground, an array of kids’ accessories and a coffee shop, La Mie Doree,” said Robert Fadel, ABC’s general manager. A second big store in the Ashrafieh suburb of Beirut is adding an extension for a playground that will fill an expanse of 800 square meters.

The Johnny R. Saade group is also jumping on the expansion bandwagon. Its travel and tourism arm, Wild Discovery, will be setting up shop in Kaslik in northeast Lebanon in a few months.

“We decided to push forward with the opening of new branches in Lebanon despite the prevailing situation, following the simple strategy that one has to invest and position oneself in times of relative crisis to prepare for the inevitable economic and political recovery that can be foreseen,” said Sandro Saade, one of company’s owners.

“This opening is also justified by a strategic objective to cover the northern Beirut area, where there is a demand for high-quality travel services.”

The company’s real estate arm boasts a $30 million residential project sprawling over 18,000 square meters in one of Beirut’s posh suburbs. In addition, the group is developing a winery in Bekaa Valley, near the villages of Kefraya and Tell-Denoub, covering a 50-hectare swath of land. The project is estimated at $25 million and will employ 50 people, excluding seasonal workers.

“The Lebanon venture will also integrate two other complementary projects, namely a wine museum and a boutique hotel, or ‘h”tel de charme’” with 30 to 35 rooms, said Karim Saade, another company owner.

It is not just big names that are taking a leap of faith into the murky Lebanese waters.

Nehme Lebbos, founder of Iloubnan, a news portal for Lebanon, left his home country in 1991 and worked as an IT consultant for 12 years in France before coming back.

“I wanted to come back ever since I left. I started IIoubnan in March 2005 with the help of my wife, a French journalist,” Lebbos said. “It is a Web magazine dovetailed with an e-commerce wing.”

The young entrepreneur has poured all his savings into this venture, relying on a bank loan, as well. The company’s recent success has allowed for an increase in operations, with four journalists employed on a full-time basis and a network of 20 freelance journalists around the world.

A shared vision of Lebanon seems to cement together the diverse business figures. “Lebanon is our homeland and we believe in our country,” Fadel said. On the other hand, Lebbos is conscious of the risks he might incur but is nonetheless determined to promote change in his home country.

Although most companies are investing in Lebanon, many have also looked to taking their business abroad. ABC will be opening in Jordan in March. “The company will bring to the Jordanian market a spirit of Lebanon, and aims at becoming a leading and trendy shopping destination,” Fadel said.

Similarly, the Saade brothers are relying on an international network of agencies for their tourism activity as well as launching a new winery in neighboring Syria. The group is trying to counter the negative business environment by highlighting the quality of its services. And so Wild Discovery is investing in an in-house sales training program expected to enhance its team’s knowledge and technical skills.

For most entrepreneurs, the essential rationale linking their projects is endorsing Lebanon as a brand in the region. Lebbos believes that this cannot be done without the help of young Lebanese people. “They need to travel, study abroad, graduate and experience foreign countries,” he said, and “then come back and invest in Lebanon.”

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For most Canadians, buying a home is the largest financial decision they will make in their lifetime. Yet, consumers across the country are more likely to painstakingly review dozens of investment possibilities for their portfolios than to scrutinize their mortgage choices. The mortgage world – like the investment world – can sometimes be confusing. There is a vast array of choices – open, closed, fixed, floating, long or short amortization, prepayment options, portability… and of course, the rate itself.

Making the right mortgage decision can have a huge financial impact over the long term. Many Canadians have an investment advisor to help them sort through their choices. Now, Canadians are also beginning to turn to mortgage brokers to help them make better mortgage decisions. Canadians are just now catching up with their counterparts south of the border, where mortgage brokers already arrange approximately 70 per cent of mortgages for U.S. properties.

So what is a mortgage broker? The role of a mortgage broker is to understand your mortgage needs, seek out the best options for your situation, and guide you through the lending process. A mortgage broker does not work for any individual institution or lender, but is independent, and has up-to-the-minute loan rates for a wide array of banks and other lending institutions.

There was a time when the banks exercised the view that they “owned” their customers, and mortgage brokers were perceived only as a last resort for home buyers with poor credit history. But times have changed, and home buyers in every bracket are learning they can benefit from the professional advice of a mortgage broker.

A good investment advisor can make you thousands of dollars. But a good mortgage broker will SAVE you thousands of dollars. Whether you are buying a home or renewing a mortgage, consider making a mortgage broker part of your financial plan this year.

My neighbor asked me, “Why would anyone sell a successful company?”. He could not understand why anyone would leave a business that was doing well. Of course successful companies get sold all the time.

So why do these business owners sell? The short answer is that most closely held businesses sell for human reasons, such as burn out, retirement, illness, partnership disputes, family issues or other personal reasons. Usually the business is fine but the human being running the business needs a change. To understand this better it is key to understand the other options for exiting a business.

Close the Business/Liquidation

Closing a business that is profitable never makes sense. Even if the assets are liquidated the price is likely to be pennies on the dollar versus selling the business as a going concern with employees, customers and a reputation that is intact. Not only does the business owner get the lowest value but the employees, vendors and customers are hurt by this type of exit.

Accident, Illness or Death

No one wants to exit their business this way, but many do. The loss of an owner not only creates tremendous issues for the family but also creates a leadership void in the business. Even the most competent management can struggle when a key business leader is lost to a serious accident, illness or death. No one plans for this type of exit but many end up exiting the business this way because they failed to create an alternate plan.

Succession

Succession by a family member or key employee has its benefits. They know the business, its product or service, employees, customers and vendors. Succession can be operationally successful for the exiting owner if they make sure the successor is carefully selected, qualified and groomed for the position. The owner must be careful not to make an emotional choice of a relative or favorite employee but instead choose the successor with the right skills to lead the company into the future. You are not seeking an “Employee” mentality but an “Owner” mentality. If that rare person can be found in the business who can make the transition to Owner, they often do not have the cash needed to purchase the business. They are also likely to want to pay less for the business as familiarity will blind them to many of the value drivers of the company. So although succession can be operationally successful it is rarely a financial success for the outgoing owner.

Sell

Closing or liquidating the business minimizes the value to the owner. Accident, illness or death forces the issue on the owner. Succession provided a very limited pool of options with limited financial reward.

Selling on the other hand allows the business owner to decide their ideal timing, maximize the value of the business they worked so hard to build, coordinate the use of the sale proceeds for financial planning and align their personal goals with the sale of a business. Selling the business allows the business owner to create a wealth event and often significant on-going passive income without having to run their business.

Whatever they are, human reasons are always pushing and pulling on a business owner. Burn out, stress, divorce, illness, partner disputes and limited growth capital are some of the human reasons that push owners out of the business. Retirement, enjoying life, relocating, a new business opportunity and passive income are some of the reasons that pull a business owner out. Whatever the motivation, the fundamental reason a business owner chooses a sale as their ideal exit plan is control. The business owner chooses to understand the value of their business and to proactively pursue the right buyer and the right price. By selling a business you choose to exit your business by choice, not by force.

The professional team at Sunbelt Midwest can help you confidentially sell or buy a business in Minneapolis, Milwaukee, Chicago, and surrounding areas. For more information check out our site at http://www.sunbeltmidwest.com.