We have all seen it many times, large signs exclaiming that a business has lost its lease and must go out of business.
Of course, a business can move to another location.
However, frequently, there are inadequate funds for another build-out or the expense of a move makes it prohibitive.
There could be many obstacles preventing a business from succeeding or emerging in any way after their lease is lost.
Usually, this would only happen if the business is having difficulty paying its rent and thus forces the lessor to exercise his rights and end the lease for reasons of default.
However, often there are other reasons such as a better tenant wanting the space, a large increase in rent that makes it unaffordable, or any one of a dozen other reasons that, in the end, result in a lost lease and a business forced out of business.
What is the alternative? How does a small business protect itself against the indiscriminate actions of a lessor who has his own interests in mind, which may not serve the best interests of the lessee, you, the small business owner? This situation is a collision course on which the tenant always loses.
Another moment of truth occurs when a small business owner wants to sell his business and has a lease with a short-term remaining and a buyer wanting to renegotiate the lease before he buys the business, the success of the sale then being dependent upon a successful negotiation with the lessor.
Not a comfortable position to be in, as the lessor will act in his own best interests, not those of the business owner.
I have seen quality businesses in the process of a sale unable to close because the lessor would not cooperate with the transition.
Total loss results.
Nothing to sell without a lease in place on terms and conditions the buyer will accept.
One option that clearly will not apply to every business, but which is an alternative, is to buy your space.
Own it, control it and control your destiny.
In this economic recession, business condos are selling very inexpensively and other real estate opportunities exist as the market continues to melt down and prices drop.
This solution is not for everyone, however, when it comes time to sell your business, owning the real estate gives you many valuable options such as selling the business and leasing the space to the new buyer.
This works.
Selling the real estate with the business equals added profit and additional opportunity to enhance the deal with added value.
This also works.
Again, this is not for everyone but it is worthy of consideration.
Examine local opportunities and see if you can find something that will work for you.
Control your destiny rather than allow others to control it for you.
Enhance your opportunity to sell your business successfully by controlling your real estate.
Think about it and explore your options; it may be a good move for you and your business.