The Importance of Understanding Leases

Leases should never be overlooked when it comes to buying or selling a business.  After all, where your business is located and how long you can stay at that location plays a key role in the overall health of your business.  It is easy to get lost with “larger” issues when buying or selling a business.  But in terms of stability, few factors rank as high as that of a lease.  Let’s explore some of the key facts you’ll want to keep in mind where leases are concerned. The Different Kinds of Leases In general, there are three different kinds of leases: sub-lease, new lease and the assignment of the lease.  These leases clearly differ from one another, and each will impact a business in different ways. A sub-lease is a lease within a lease.  If you have a sub-lease then another party holds the original lease.  It is very important to remember that in this situation the seller is the landlord.  In general, sub-leasing will require that permission is granted by the original landlord.  With a … [Read more...]

Who Are Potential Buyers?

Once a business owner has made the decision to sell, he or she should be aware of the variety of possible business buyers. Just as small business itself has become more sophisticated, the people interested in buying businesses have also become more divergent and complex. The following are some of today's most active categories of business buyers: Family Members Members of the seller's own family form a traditional category of business buyer – a category of buyers that is “tried” but not always "true." There is something appealing about a family member taking over the business. There is a sense of keeping the business in the family and an assumption that such an arrangement will translate into the prime advantage of continuity. Continuity may in fact be the result as long as the family member buying the business treats the role as something akin to a hierarchical responsibility. This can mean years of planning and diligent preparation, involving all or many members of the family … [Read more...]