Richmond Business & Commercial News

Bandazian is in Style this week!

The current issue (1/17/07) of Style Weekly has an article in the Food & Drink section called "Fire in the Belly" that I suggest everyone should read.  Go ahead, read it and then come back here.  (come on, it's not THAT long)

Every time there is an article about a business changing hands, usually restaurants, the business broker isn't mentioned.  This isn't an issue of vainity in wanting to get press coverage, but merely a business matter.  I have said for the past couple of months that every time a high-profile restaurant is reported as being sold and we are not mentioned, it just perpetuates the myth that most business sales are made without broker involvement.

The article is right on track about how this activity tends to happen very quietly -- discretion and confidentiality is almost always a concern with businesses that are currently in operation.

I will be doing periodic press releases for completed business sales going forward, and will put these press releases up as posts here, as well.  This article is a great start!

There will be a follow-up posting here to go into some of the other details mentioned in the article, so keep an eye out for it!

Rules for "One-shot Sales"

Or "Embracing the naive prospect" by Seth Godin, the marketing guru.

Seth points out some valuable insights for anyone that sells to a target market of consumers that are making a "once in a lifetime" purchase. (i.e., a DJ for a wedding, or a Realtor that deals primarily with first-time home buyers)

At first, I thought I would be pointing to this mainly for the benefit of other Realtors, obviously with the first thought coming to mind of how I deal with first-time buyers and sellers of businesses and real estate every day.  Then I realized that beyond my bubble there are industries that deal with this "naive" type of customer every day, too.

Now "naive" in this sense is not meant to put down anyone, it's just to acknowledge the experience level of your target market. 

Wedding vendors are a great example of this -- the wedding process is not something that most people end up going through enough to be experts at it (let's hope not, at least).  It is a crazy time trying to plan it, and even if you have a wedding planner, you still had to pick that person.

Visit Seth's site and see what he has to say about how to deal with these "naive" consumers.  I think his insight was right on track.

I would love to hear how anyone else is dealing with this issue in their own businesses.  I submit that this blog is one of the ways that I am addressing it in my business.

Secure the Lease Terms Quickly!

I have recently come across an excellent blog written by Peter Siegel, a consultant in California that deals with a range of small businesses being bought or sold.  When I come across something especially helpful for buyers or sellers, I will be sure to highlight it here (even if it may be an old blog on his site).

Of course, I won't post his entire blog entry here.  That would kind of be cheating on my part, wouldn't it?  I will be sure to give you the link to the specific blog entry so you can read it in full.

This particular entry has to do with a client of his that moved forward on the due diligence on a deal that was eventually shot down due to the landlord not being willing to renegotiate the lease terms.

I have seen it plenty in the time I have been doing this, as well.  Landlords are oftentimes the bottleneck when it comes to the due diligence period.  Even if they are willing to work with you (the buyer, seller, or business broker), that doesn't mean that they will move quickly. 

Basically, there is no reason for them to -- they already have the space leased.  What is the incentive for a landlord to go out of their way to help an owner that is trying to sell their business?

There are some landlords that will move quickly, and some that are more inclined to work with their tenants than others (and conversely, there are some that feel they have no reason to cooperate at all).

When you are buying a business, you need to establish a rapport with the landlord as quickly as possible.  If the landlord will not assign the lease, then there is no reason to pursue the deal.  The other pieces are equally important, but I would suggest that you start the process with the landlord as soon as you have a signed contract.

***Please, if you are signing a commercial lease, make sure that the lease is assignable.  If the landlord wants the authority to approve the assignee (which I would advise landlords to insist), then use the magic words "which consent shall not be unreasonably withheld".

Link: Landlord & Lack Of Follow Up By Business Buyer Kills A Deal.

My client is now out over $6,000 in CPA fees for due-diligence and attorney fees for contract reviews, over 120 hours over a three month period, when he should have pressed harder in the begining (one key item on my checklist for financing clients) to check with the landlord about future lease terms!