# anyone have any experience leaseing to buy a business??



## frizbee (Sep 27, 2003)

I have the opportunity to buy a well established wedding catering business/facility, which has been in existence for about 15 years. Business has been curtailed as of the last year or so , because the women is simply getting too old to do it anymore, (she is a 70 year old, mature southern women who has done most all of it herself), and she has turned down business just because she can't physically do it anymore.
The property is 7.5 acres, 70 seat covered pavilion, heated/ac with 2 bathrooms, 70 seat open air pavilion, gazebo, and 4 bedroom house that she keeps the front rooms as office for clients. She has a commercial kitchen because part of the house used to be a restaurant 20 years ago. All of the property, buildings, equipment and such is apart of the deal, everything!
How would a lease work roughly, I understand that it would be unique to our agreement, and does anyone know how I assess the value of the business? She doesn’t have a P&L sheet, and when I questioned her about her average costs, she couldn’t say.
It a great deal as she can help me through the learning curve, and has already several great marketing tools, all the equipment (linens, tables, chaffers etc.) and a spectacular reputation in place. just very concerned about the money obviously. I will be a recent graduate when this happens and already in debit for school and don't have any collateral to put up to a bank or lender, which is why I think a lease to buy would be perfect for me, and she is open to that as well.
Any ideas?
thanks,
Frizbee


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## windycitypastry (Jan 10, 2005)

BUt the first, and I believe most important, is determining the purchase price. I work with Small Businesses every day - and one area of my position allows me to determine if - and how much - we will lend on the purchase of a business.

In order to determine the purchase price you will need to see her business tax returns for the past several years. This will allow you to determine the dollar value of the assets. You are purchasing the assets - not the potential increase in revenues if you start working "harder and smarter" than the current owner. This is where people tend to over pay - don't pay for potential.

Have you created a business plan ? This is a must for anyone going into business - even if you don't need to borrow money. It is a great tool for keeping you on track - if you consistently look at it and make applicable changes. You will create your future Balance Sheet, Income Statements etc

I recommend the book "Anatomy of a Business Plan" and getting onto the SBA website : www.sba.gov

Good luck - I would love to be of any assistance I can in helping you - I love seeing PREPARED people obtain their dream (that way you alieviate possible future heart ache)
WCP


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## frizbee (Sep 27, 2003)

thank you for your advice.
i was falling into that trap of assesment on the value of potential, rather then actual numbers.
i am getting busy on my business plan, in all the hub-bub i had forgotten that lesson which was impressed to me many years ago. thanks. and i would love to garner your advice from time to time if your willing?
frizbee


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## windycitypastry (Jan 10, 2005)

Anytime....Let me know if you have any questions


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## phishstyx (May 21, 2003)

Really do your homework on the business. Dig deeper than you think you need to.


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