Leasing a business
What are the steps to leasing your business out?
[{"id": "fx40l6j", "text": "Do you mean a sale leaseback? Subleasing? Lease negotiation? Tenant/Landlord?", "replies": [{"id": "fx419rd", "text": "Well to add some background. This is a small business located in a rural area. Pretty much just small grocery and some hardware. Building is about 10,000 sqft. Family owns building and the land, we\u2019ve had a nice run, but have outgrown the area, and running a small business. What\u2019s the best way to exit? I think finding a potential buyer in the area we are in would be harder than trying to find someone who would be willing to lease the business, but I have no experience in commercial real estate.", "replies": [{"id": "fx42x37", "text": "Try to franchise it. You'll get a payment every month or quarter and they'll \"own the business\".  You can keep the building and NNN lease it to your franchisee.", "replies": [], "depth": 3}, {"id": "fx430fs", "text": "Two separate transactions.\n\n1. Sell the business, probably worth less than you think\n2. Lease the space that you own to a new business owner, with a normal lease.", "replies": [{"id": "fx45rot", "text": "How would you estimate a potential lease or sell price? Is it a percentage of the revenue, or the income?", "replies": [{"id": "fx492bu", "text": "Lease, I would use comp's in the area. Realistically I would cut a deal for the first 12 months to help them get off the ground. \n\n&amp;#x200B;\n\nThere are business brokers that handle these types of transactions. Prepare to open up your books fully, and be honest with income, profit, expenses, etc. If you are leaving the business because it is not profitable enough to be worth your time, it might be a easier transaction to liquidate stock and just rent the building.", "replies": [{"id": "fx4aa6a", "text": "I really don\u2019t know if there are any comps in the area. There are two other stores within a 15 mile radius, and not any commercial properties that I\u2019m aware of for any comparisons. \nStore is actually profitable, not feasible for one individual to run anymore.", "replies": [{"id": "fx4czi8", "text": "It's hard to say without knowing the specifics on the numbers. Your comps might be really far away, but knowing if 60c a square or 85c a square foot would be good to know.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "fx4ule6", "text": "Small businesses are not worth what people think they are.  It's usually based on a multiple of EBITDA or other adjusted cash flow figure (adding back owners salary or owner occupied rents if you're selling a business and the real estate).  The higher the multiple the less risk to the stream of cash flows the purchaser is buying.  Realistically, neither a small grocer &amp; hardware store or a restaurant command a high multiple. Both are business low margin businesses with many substitutions available.  \n\nHonestly, I think your dollar maximizing option is to find someone that wants to buy the whole thing (2 businesses &amp; the real estate) and find an SBA lender to finance the buy out.  It is unlikely that anyone with cash will offer you more than a couple turns for a risky &amp; rural business.  Also, the fact that you can't find any comps doesn't bode well for the real estate being worth a boat load on its own.\n\nBest of luck.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fx45xqw", "text": "Just a few more details. (Sorry, going to get a little detailed here). Building is around 10,000 sqft. It is subdivided. Store accounts for 6,000 and there are two other \u201crooms,\u201d plus the hallway in the remaining sqft. One of the \u201crooms\u201d was actually a small burger joint that I operated, still has all the equipment (fryer, flattop, prep fridge) inside. It is practically turn-key, with of course deep cleaning. The other \u201croom\u201d is just that, but has potential.\nEssentially, I would need separate leases if I wanted to maximize the potential of the building?", "replies": [{"id": "fx48yp9", "text": "&gt;  Essentially, I would need separate leases if I wanted to maximize the potential of the building? \n\nYes, each legally licensed space would need to have it's own lease.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fx5rpl7", "text": "Realtors in business opportunities can help you.\n\nThey market for you, write contracts, title search, fictitious business advertisement, review with RE lawyers.\n\nThis year few are interested in getting into business due to Covid. Expect longer marketing time.", "replies": [], "depth": 1}, {"id": "fx61vyr", "text": "We are interested in rural businesses.  \nPlease DM me.  \nThank you.", "replies": [], "depth": 1}]