Depending on the type of business, a month-to-month situation can be severely detrimental to the value of the business. For example, if you are the owner of a
mailbox store for sale, it is unlikely a Buyer would risk buying the store without a solid long term lease. The customers renting the mailboxes are tied to that specific address. If the store is forced to relocate, many customers and thus much revenue would potentially be lost.
On the other hand, if you are the owner of a
wholesale distribution business and you have no walk-in traffic, it makes no difference where the business is located. The Buyer may desire to relocate the business in which case a month-to-month situation is highly desirable.
If your business is retail and your clients are local, you may be able to relocate the business within the same area and retain most if not all of your customers -- as long as they know where to find you.
There is no "one size fits all' answer or solution in business transactions. That is part of the challenge. Every business is unique as is every Buyer and every Seller. A good business broker must be a creative problem solver and must focus on making sure the Buyer and the Seller both get what they need from the transaction.
About The Author: Tawnya Gilreath is the managing broker of First Choice Business Brokers in Los Angeles County. Tawnya can be reached at 818-781-0082 for assistance in buying or selling a business, or see her listings and more information about her services.
Watch for more blog posts / articles from me in the future!
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