With a transfer of business we refer to a commercial agreement in which the lease contract of a commercial premise or business is transferred to a third party. Usually, in this process of transfer are included some assets as furniture or products (tangible goods), as well as the added value of the brand or the clientele (intangible goods).
In this post, we will tell you what you should keep in mind to carry out a transfer of business…let´s go!
On the one hand, if you are the owner of the business, you should pay attention to the following points:
Put a price
Value your business and think in a minimum and maximum price, to be able to accept offers between those margins. The amount shall be fixed according to the capacity to generate profits.
Announce the transfer
The poster announcing “transfer of business” at the door of your premises is not enough. If you really want to transfer your business, advertise your offer on portal sites and specialized websites.
If you want to speed up the transfer, you should have all the important information regarding the expenses and income of the business
Prepare interesting information of the business
You should elaborate a dossier in which are collected the main features of the business, such as invoicing, taxes, accounting, licenses or costs.
Have you found a new owner yet?
It is very important to have an attorney or legal adviser in order to not leaving any loose ends in the transfer of business, and take into account all the taxes that you are going to assume.
On the other hand, if you are an entrepreneur and you are looking to start in business with a transferred business, you should keep in mind certain tips:
Visit the premises
You should go to the business you are interested in, and act as a random costumer. Through this, you will be able to know first-hand if the business works, valuing the location and knowing the “modus operandi” of your future clients.
Make yourself known!
You should talk to the business owners and show them your interest in the transfer of business. Make sure that the business works well and why they want to transfer it.
Think well on the money you want to invest and the profitability of the business
Value the opportunity
You should learn about legal aspects and restrictions that may exist (especially if you are planning to make works or changes).
Analyse your perspectives
Be clear about what you want to invest and the profits you want to earn. To do this, you should to conduct a market research and analyse the pros and cons of the transfer. The business must be profitable for you.
Negotiate the price
If you finally decide to accept the transfer, negotiate with the owner to reach the amount that suits you both. Be realistic and, if necessary, look for an outside consultant who evaluates the business objectively.If finally you reach an agreement, it is essential to take care of the clients to maintain them and, from there, to introduce your new ideas, but always respecting the essence of the business.
↔The change process begins
Once the transfer takes effect and the agreement is signed, it is interesting that, as a former owner, you help out to the new manager and that you both stay together in the business a couple of weeks, so that the change is not so radical.
“Take advantage of what you know. There is wealth”
Warren Buffet