Expert: Brian Bocchieri - 7/7/2008

Question
I have been offered the opportunity to buy a beauty solon the current owner has a five year lease, she has one more year to go, besides reviewing the lease and knowing if it is transferable, what are some key factors to consider regarding buying the business and negotiating a new contract. What are some horror stories you have experienced regards similar transactions.

Answer
There is a lot to consider in this situation.  

Are you buying the business, existing clients... Have you seen the client list?  
How many on the list will you figure on staying with your new business and is that enough to carry your overhead?
what has the old owner been charging will you need to increase prices to survive (there are only 3 ways to grow a business new customers, increase your profit per customer, or have your customer buy more often)

As far as the lease goes what are the terms?  what are you the tenant paying for?  What are the increases (taxes, trash, common area maintenance ...) Does the lease have extensions how many how many years and what are the terms?  How about security deposits how much?  If the term of the lease only has one year left by the time you get rolling you will be looking for a new location not good.

I hope this helps I wish you all the best.
Please feel free to contact me if you need more info.
Brian Bocchieri