Selling a business

[21TonyK]

I've been offered a fantastic opportunity, the kind that you can't pass up but it unfortunately conflicts with my business which is in a leasehold building.

The current lease expires at the end of September and I am keen to sell it on sharpish so I can have a few weeks break then focus on things ready for a new start at the end of the summer.

I have an offer on the table from a cash buyer but it is considerably lower than i would ideally want.

To mitigate the losses I can save £5K by not selling through the agent (they know I had this offer before going to them) and by minimising my legal costs.

Or, can I conduct my own sale without a solicitor? Buying was a legal minefield and cost alot more than I anticipated. I am guessing that selling is a lot easier!

I have the offer of a new lease from the landlord , should it be simple?

[foliedouce]

How essential is the property to you carrying out business? Could you carry on for a few months, maybe in a serviced office or from home?

If the answer to that question is yes, them let it go. A new buyer may want to relocate it anyway and this gives them the choice (read giving them more value and you more money). Signing a new lease would lock you down.

I have no idea how many staff etc you have, the above advice would probably not apply if your business had a 100 staff, so it's all relative.

Please tell us more about what you do, how many staff you have then we can refine the advice.

[21TonyK]

foliedouce said:

Please tell us more about what you do, how many staff you have then we can refine the advice.

Thanks for the reply. Its a restaurant so fixed location with 4 staff, all recently started. The potential buyer wants to completely change the business model and style.

[foliedouce]

21TonyK said:

Thanks for the reply. Its a restaurant so fixed location with 4 staff, all recently started. The potential buyer wants to completely change the business model and style.

I know zero about restaurants but I'm guessing a huge part of success is about location? In which case, renewing the lease seems sensible to me.

If the buyer wants to change the model and style, what is s/he actually paying for? If it's not the staff (all new), or the location (you're thinking about not renewing the lease), then it's goodwill. How much goodwill is there if they are changing the model / style therefore potentially alienating your current customers?

Interested to understand as I know sweet FA about this kind of business, I'm sure a fellow restaurateur will be along soon to say something sensible!

[johnfm]

speak to realpigdog on here if you want a sensible corp lawyer to have a look about your sale legals.

[DSLiverpool]

If you don't renew the lease do you have a business to sell or just tables and fittings etc ? in which case renew the lease and sell it or take the lower offer.

[skwdenyer]

Depending upon whereabouts you are, the value used to be in the A3 permission, the kitchen fit-out, the extraction system, and so on, all contributing towards the calculation of a premium for the property. On top of that would be the goodwill (if any) in the business.

Is the business incorporated? How will you be selling the business? Who holds the lease - you or the business? Does your lease allow you to assign the lease to another party? Does that landlord have to give consent? Will the landlord give consent? Will you have to settle a dilapidations bill on the premises? If you assign the lease, will you still be liable to the landlord if the new tenant defaults? Etc...

I say "used to" re A3 because the current government have relaxed planning laws relating to A3 uses; some areas are exempt, but the A3 premium is not what it was.

More info needed to help further, I'm afraid

[21TonyK]

skwdenyer said:

Depending upon whereabouts you are, the value used to be in the A3 permission, the kitchen fit-out, the extraction system, and so on, all contributing towards the calculation of a premium for the property. On top of that would be the goodwill (if any) in the business.

Is the business incorporated? How will you be selling the business? Who holds the lease - you or the business? Does your lease allow you to assign the lease to another party? Does that landlord have to give consent? Will the landlord give consent? Will you have to settle a dilapidations bill on the premises? If you assign the lease, will you still be liable to the landlord if the new tenant defaults? Etc...

I say "used to" re A3 because the current government have relaxed planning laws relating to A3 uses; some areas are exempt, but the A3 premium is not what it was.

More info needed to help further, I'm afraid

In quick terms I hold the lease as a sole trader, the landlord has offered a new lease and its it much better condition than when I took it on! ((!! :;<>>) I'm not liable once assigned it should be practical.

really I need to know about the sale/transfer side of stuff.

What is the buyers soli going to need.

I've had two real cash offer today!! _( ;:!)