![]() |
Image Attribution: www.blog.thebrokerlist.com |
So, what are these business owners sharing with me? That dear reader, is the subject of today’s column.
Lack of quality
employees. Unemployment in
Orange County and the Inland Empire is the lowest in history. Doubt what I say?
Try this simple exercise. Next time you’re out to visit your neighborhood - you
decide - observe the number of “help wanted” signs. They are everywhere! Add a
bit of skill or complexity to the position - a computer numeric machine
operator, welder, diesel mechanic or heavy equipment driver - good luck.
“Poaching” trained workers from competitors is widely practiced these days.
What is the solution? In my opinion, a more focused effort on the part of our
community college system, trade schools, and vocational training in our high
schools to prepare young folks for the skills necessary and the jobs available.
Increasing costs.
Minimum wage, rents, tariffs - all add
to the up-tick in operating costs. Let’s take your typical distribution company
as an example. Defined is a business that stores and ships things - but doesn’t
necessarily make the items they ship. Contained in their operating expenses are
three main categories - labor, space, and the price of the products that enter
and leave the warehouse. See any issues there? Yep. A distributor’s three main
cost centers are increasing wildly! Here is a simple example. If rents bump up
by 30% - that company must figure a way to absorb the higher cost. He’s three
options - raise prices, lease fewer square feet, or take the hit in his bottom
line.
Legacy. Countless small business owners with whom I
deal are on the back nine of their careers. Many are thinking about the 19th
hole. The problem is - too few of them have an exit planned - a family member
who will assume the reigns, a sale of the business to a competitor, or what
will be done with their commercial real estate once the company is sold. Once
such operator finds himself with a building ownership which doesn’t mirror the
company ownership. By the way, he is the common member of both. Now he faces
differing motivations when it comes to the real estate direction - sell, raise
rents, etc.
What issues is
your business facing? I’d love to hear from you.
Allen C. Buchanan,
SIOR is a principal with Lee & Associates Commercial Real Estate Services. He can
be reached at 714.564.7104 or abuchanan@lee-associates.com his website is allencbuchanan.com
No comments :
Post a Comment