How to Lease a Business

Leasing an existing business is a fast way to become an entrepreneur.

Running a small business is a good way to build wealth. You can have the opportunity to own a business without having to do the initial start-up work through leasing. Leasing a business from an established business owner is a good way to become an entrepreneur. There are many business owners that are ready to lease their business to a dependable person. Having business knowledge is important before you decide to take on this type of responsibility.

Instructions

1. 

   Inquiring about a business is part of the due diligence process.

   Investigate the history of the business. Contact your local Better Business Bureau to find information on the business, if the company is registered with one. You can also ask customers that conduct business with this company about its reputation. Try to find out as much as you can without being overly skeptical. As stated on Business Link, "As part of your investigations, talk to the vendor and, if possible, the business' existing customers and suppliers. The vendor must be comfortable with you doing this and you must be sensitive to their position. Customer and suppliers may be able to give you information that affects your valuation, as well as information about market conditions affecting the business."

2. 

   Reviewing financial statements is necessary for determining business performance.

   Request to see the financial records for the business before discussing an offer. According to Business Link "Having done your research, you should verify the information you have been given about your prospective new business. A period of time is allowed for you to access its books and records. This is known as due diligence. It should give you a realistic picture of how the business is performing now, and how it is likely to perform in the future. It should also highlight any issues or problems which might need warranting or guaranteeing. Seek advice from your accountant and lawyer regarding the information you have learned. These professionals should guide you on your decision of whether to take on this business or to keep looking.

3. Make an offer. Be sure to research other businesses in this industry before making an offer. Find out what the business is worth before you discuss a figure or put it in writing. Obviously, it will be difficult to operate profitably if you overpay.

4. Produce a legal contract stating the terms and conditions of the agreement. This contract should be created by a lawyer and reviewed by the leaser and lessee with the help of their attorneys. Do not sign anything you are unsure of; put all agreements in writing.

References

• Buying an existing business:Make sure a business is worth buying:due diligence
• Buying an existing business: How to value a business