No 4 – Premises and Lease. 7 Key Factors Which Determine the Saleability of your business.

4. Premises and Lease

In so many small businesses the location and term of lease are critical to a buyer as the current income was generated from that premises and location. The regular customers know and like the location as that may be one reason they go there.

Convenience – The premises are fitted out to suit the business and regulars are familiar with the layout and
where things are.

Length of lease – this is very important to most small businesses so there is security in operating from the same premises indefinitely. A lease period of less than five years would be a big disadvantage in most cases so try and half at least that amount of time left in the lease if intending to sell.

Transferable – If selling it is also critical that the lease you have in place is transferable to a new owner of the business should you sell.
Conditions of the lease agreement has to be fair and reasonable if you are selling as a dispute with the landlord could cost you the sale.

Market rent – do some research to make sure the current rent you are paying is also fair and reasonable for the area. If you own the premises what rent allocation do you currently have and would you expect the same, less or more if you sold.

Expansion – is the current location allow for any expansion of the business? If you plan to grow the business the last thing you want is to have to relocate or create more usable space.

Road Changes / Development – Have you checked with the owner or council for any anticipated changes, closers to existing roads? Are there any major developments or re-developments that could have a major effect on the premises or location?

Certified-Business-Valuer-and -Business-Broker-Coffs-Harbour

Douglas McDonald

Business Valuation Specialist

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