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Buying a Unique Business or Lodging Property - Issues to Consider © - Author,  Karen A. Kovacik
Inn, B&B, Resort, Lodge, Cabin Resort, Campground, RV Park or Other Unique Businesses for Sale 
This article may not be copied nor reproduced without expression permission of the author.

Is buying an inn, bed and breakfast, lodge, resort, cabin resort, or other unique business property in your future? Making a decision to buy a unique business property has far reaching implications. Anyone considering purchasing an inn, bed and breakfast, or other unique business opportunity should thoroughly research the following issues.

Commitment to a Lifestyle

Most unique business opportunities and hospitality properties are a way of life, not a career. It takes special people and an extra special commitment to integrate personal, social, physical, health, financial, and family needs with that of the business. This commitment involves not only your wallet, but your family. To be successful, you must integrate all aspects of family and business life. Why have you decided you want to be involved in a unique lodging property or business?

The Unique Business

What type of hospitality or unique property will be right for you and your family? Are you looking for a lifestyle change, a profitable business, or both? Who will run the business on a daily basis? Who will teach you this "business?" What is your long term plan? How long will you operate this business?  What "if" you made a mistake and are unhappy running this business?

Running a business places tough demands on any couple or family. Make sure you understand the commitment that will be required of you and your family before leaping into a purchase. Many families simply cannot withstand the intrusion a small business makes in their personal lives. Analyze your reasons for choosing a new profession.

How to Locate Properties for Sale

One of the most difficult tasks is finding profitable unique properties for sale. Most small business owners do not want their clientele to know their property is for sale. It can be a real challenge to find viable properties that are actively on the market for sale. The key word is "viable." There are many properties for sale at any given time, however, few make good financial sense.

Will you retain the services of a real estate agent, a buyer broker, a specialist, or a consultant? It is wise to hire a professional to help analyze the financial health of any unique business you are considering for purchase.

Ask Commerce Team to Refer a Broker Specialist to Sell or Buy a Unique Property or Business
Ask us to refer an experienced, qualified specialty broker able to assist you with your specific needs.
Commerce Team networks brokers specializing in unique properties, business & hospitality properties throughout the United States

Identifying a Profitable Business

An experienced consultant or specialty broker should be able to assist in the business analysis process. Our staff is experienced in evaluating financial documents to make an initial determination on viability. We recommend analyzing financial information prior to incurring travel expenses to tour properties. Many properties for sale will never be financially viable. Analyzing the potential prior to touring the property can save time, disappointment, and money. Why waste time seeing properties that will never be viable businesses?

Can you identify a profitable business given the opportunity? Financial documents must be analyzed for discrepancies, poor management, and errors. To do this, you must understand the industry to know what represents the norm when reviewing financial documents. Will you be buying a business or just real estate?

Professional Advisors

Do you have access to a network of professionals to assist in this new venture? A good start to success is to hire your consultant and accountant before you need them. Your attorney and building inspector should be selected from the same geographical region as your business purchase. It is also extremely valuable to find a specialist that is familiar with the industry you are analyzing for purchase. Industry norms vary according to the type of business so an expert is invaluable.

Details

Who will help with the numerous details? Your professional advisors should be able to assist you with the many details of purchasing a lodging property or other unique business. A licensed broker that is an expert in his or her field should be able to explain all steps of the transaction including letter of intent, confidentiality issues, disclosure, contracts, contingencies, and due diligence. A good attorney will also be able to counsel you in these areas.

Always have an attorney review any legal contract to purchase. In addition, your accountant should review the financial details of any purchase prior to signing any purchase agreement.

Financing

Financing the property of your dreams is often the difficult part. Unless the property is properly priced and the sellers have adequate financial documents, financing can be almost impossible to obtain. Financing options are varied and include seller financing, bank financing, Small Business Administration financing, lease purchase, lease option, and other creative approaches.

Training

How will you learn to operate your new business? Training should be a part of every contract to purchase. Even if you have worked in the same industry in the past, procedures can vary from location to location. Adequate training should cover all aspects of the building and business operations. You will need to be familiar with area activities, merchants, and local businesses.  Ask the sellers to introduce you to area vendors and merchants after the sale. If the sellers are unable to provide training, ask them to hire professionals to train you as part of the sale contract.

The Art of being an Entrepreneur

After closing on the property of your dreams, who will teach you the fine art of being an entrepreneur? Suddenly you are responsible for al the business operations including, but not limited to marketing, advertising, inventory, sales, maintenance, hiring and firing staff, insurance coverage, tax issues, tax reports, etc. It is important to have a plan of action and experts on call to help you solve problems as they arise.

Intuition

Does intuition have a place in business? If you have a nagging feeling about a transaction, place the transaction on the back burner until you are able to adequately evaluate your doubts and come to a concrete reason as to why you are uncomfortable. How well developed is your intuition?

Your Best Interests

Who will be looking out for your best interests? Is it worthwhile to involve a professional having no direct monetary interest in negotiations and the sale transaction? Professionals having no conflict of interest can assist you before, during, and after the transaction.

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