---

While property owners can, and do interfere with tenants wanting to sell their small businesses, there are some key steps that a company owner can take to overcome landlord/lady problems.

Step 1: Sooner is better than later.

Business sellers often tell their brokers that they’d rather wait till a buyer is obtained, before having that conversation with the landlord about assigning the lease. The seller may fear that the landowner will tell others that the business is for sale, and the word will get out to customers and employees. Or the hesitation may be based on the notion that the “landlord/lady discussion” is not needed unless and until a willing and able buyer is found. Most brokers will tell you that by putting off this necessary step, both seller and broker run the risk of wasting a lot of time, energy and money devoted to marketing the business, and then finding out the property owner won’t cooperate with the sale.

Step 2: Landlord meeting is a sales opportunity.

Most sellers and many brokers approach the property owner rather tentatively, and then plead for some cooperation so the business can be sold. It’s not uncommon for that request to be met with the question: “Why should I?” or “What’s in it for me?” Chances of a positive outcome are much better if the seller and broker use a more positive approach, pointing out that a new buyer will bring renewed energy and enthusiasm to the business, which is so important in these difficult economic circumstances, and a real benefit for the lessor, if rent is based, in part, on a percentage of the business’ revenues. If there is some concession that would please the lessor--for example the business owner agrees to be responsible for power washing the building, removing the weeds in the parking lot or setting up recycling bins--this promise could be granted in return for the land owner’s agreement to cooperate with a sale.

Step 3. Tenant know your rights

While most leases grant the landowner the right to withhold his or her approval to a transfer from one tenant (seller) to another one (buyer), the provision “…approval will not be unreasonably withheld…” usually is also included. If the buyer of the business has the same or greater financial and managerial ability compared to the seller, it will be hard for the landowner to justify a refusal to consent to a lease assignment. A real estate attorney should be consulted on this point and the seller should consider whether to threaten a lawsuit to force the landlord to comply

Step 4. If a new lease is required.

If the current lease has several years to run, the conversation with the landowner will focus on getting his or her consent to an assignment. But what if only a year or two remain? The business may need a new lease in order to be marketable. That’s the issue to discuss with the landowner. If he or she is opposed to writing a new lease--one that can then be provided to the buyer, it might be necessary for the seller to consider other options, such as a going-out-of-business sale. If it is the rental amount that worries the landlord/lady, a new lease could be drawn up which provides the tenant options to renew for extended periods, with the rent amount to be renegotiated at each option renewal date.

Step 5. Avoid surprises

One business broker suggests finding out if the “landlord” actually owns the property or has a master lease and is subletting to the business owner. That is commonly what happens in gas station businesses. An oil company might lease a station to an owner/operator, but once the underlying agreement between the oil company and the actual landowner expires, the gas station owner will lose his or her rights. It’s a good idea to become informed about who owns what rights to the property.

Yes, landlords and landladies can ruin a tenant’s plans to sell the business, but there are things a seller--and seller’s broker--can do improve their chances of success. In any case, the sooner the matter is brought up with the lessor, the better.

Related Articles on Small Business

1. Online business failures: Reasons and remedies by William King
   This article lists the various reasons for the failure of internet businesses and ways to avoid the ...
2. Key aspects to consider while designing a business logo by William King
   This article shows the importance of a business logo and why you should always pay attention to the ...
3. What is your Business Identity? by UKWebco
   You have to put a finger on the Business Identity that sets your business apart from your competitio...
4. How To Scale Your Business Working From Home by Nazeer Daud
   If you run a business from home it can often be harder to take it to the next level. Through efficie...
5. Planning Your Business Exit by Nazeer Daud
   Does your business have its liquidity event mapped out? Entrepreneurialism can be demanding, and dra...
6. The Advantages Of Business Franchising by Nazeer Daud
   If you are looking to start a business using the franchising model, then there are certainly lots th...
7. Business Record Keeping For Accounts and Tax by Nazeer Daud
   Running a business that complies with the law and common business sense requires the setup and maint...
8. Raising Small Business Finance by Nazeer Daud
   Raising small business finance isn’t an easy process, particularly in light of the recent credit cru...
9. How Business Franchising Works by Nazeer Daud
   Business franchising is a less risky way to start a business. If you’re considering giving up your ...
10. Import and Export Now Made Easy by William King
    In today’s world, consumers can avail anything they want because of the increase in import and expor...
11. Starting An Internet Business by Nazeer Daud
    Doing business on the Internet has never been more popular, nor more possible than it is today. Tha...
12. Top 5 Small Business Ideas For 2008 by Nazeer Daud
    Running a small business is most people’s dream opportunity – being their own boss, working their ow...
13. The Types of Flower Businesses by timothy spencer
    Flowers play a major part in our life. Their delicate beauty allows us to convey messages to loved o...
14. Predictive dialer – Start saving your money. Right now! by smith jones
    Predictive dialer is a computerized system that automatically dials thousands of telephone numbers a...
15. Starting A Retail Business by Nazeer Daud
    Starting a retail business is one of the first steps many take into the world of business, particula...
16. Franchising: Questions You Should Ask A Franchisor by Nazeer Daud
    If you’re starting a business, you may have considered purchasing a franchise rather than starting a...
17. Business Ideas That You Can Start From Your Bedroom by Nazeer Daud
    Starting a business isn’t cheap, and that’s what many people look for ways that they can limit costs...
18. Applying Business Skills To Your Non Profit To Lift Performance by Nazeer Daud
    Running a business and a non profit has more similarities than you might expect. While the end goal ...
19. Six Reasons Why Business Franchising Works by Nazeer Daud
    Franchising can allow your business to grow at rapid pace, and gain a presence in new markets. Altho...
20. The Insider’s Guide To Business Networking by Nazeer Daud
    Business networking should not be underestimated in how important it can be for the success of the b...

Related topics in Business and Finance

Submit Articles © 2008 KeepArticles.com, All Rights Reserved.