Commurb Business Brokerage

I bought a business last year. A little coffee roastery with decent margins and a lease that looked fine on paper. Six months later I found out the HVAC system was my problem, the landlord could jack up rent whenever he felt like it, and the “exclusive use” clause I thought I had? Didn’t exist. Let me tell you, nothing sharpens your attention on lease terms quite like writing a five-figure check for an air conditioner you don’t even own.

So here’s the deal. When you buy a business, the lease is often treated like a footnote. The real drama is the purchase price, the inventory, the customer list. But the lease can sink you faster than bad espresso. I made some of these mistakes myself. Learn from my bruises.

Why the Lease Deserves a Seat at the Grown-Up Table

Most buyers spend weeks picking apart financials and about eleven minutes on the lease. I get it. Financials are exciting. Leases are boring. Then the boiler dies and the landlord says “that’s on you” and suddenly the lease is very exciting.

Your broker should be doing the heavy lifting here. Not you at midnight with a highlighter. Your broker. That’s what you’re paying for. Here’s what they should handle before closing.

What Your Broker Should Nail Down Before You Sign Anything

1. The assignment clause. Can the lease even transfer to you? Some landlords treat an assignment like a personal favor. Your broker needs written confirmation that you’re stepping into the lease cleanly, not begging for permission.

2. Rent escalation schedule. Flat rent is rare. Know the bumps, the caps, and the CPI formulas. I once saw a lease with a “market rate adjustment” clause so vague it could’ve meant anything short of a ransom note.

3. CAM charges. Common area maintenance fees are where landlords get creative. Your broker should demand a cap, an audit right, and a clear definition of what counts.

4. Renewal options. Are they firm or “at landlord’s discretion”? The latter is a polite way of saying no.

5. Exclusive use and non-compete protections. If you sell coffee, the landlord shouldn’t lease the unit next door to another coffee shop. Get it in writing.

6. Repair and replacement obligations. The big one. Who owns the roof? The HVAC? The plumbing? Nail this down or budget for surprises.

Where Brokers Actually Earn Their Keep

Negotiation, plain and simple. A good broker knows what’s reasonable in your market and isn’t shy about asking. Mine pushed back on a personal guarantee that would’ve tied my house to the lease. We settled on six months of rent instead of three years. That’s real money.

Brokers also catch the quiet stuff. Estoppel certificates, security deposit transfers, landlord consent timelines. Small documents, big consequences. You don’t want to close and then discover the deposit you paid for never actually transferred.

A Couple of Things I’d Do Differently

• Read the lease before the letter of intent. By the time we got to signatures, my leverage was gone.

• Bring in a lease attorney. Brokers negotiate. Attorneys catch the traps. Different skill sets, same team.

• Get the landlord on the phone. Emails get ignored. Voices get answers.

The business I bought turned out fine. Great, actually. But those first few months would’ve been a lot smoother with a broker who owned the lease conversation from day one. Hire someone who does this every week. Then let them do it. And read the thing yourself anyway. Trust me on that one.

Let me tell you about the time I walked into a warehouse and almost walked right back out. Racks stacked to the ceiling. Pallets wrapped in plastic so old the dust had dust. And somewhere in that mess, the owner was grinning at me like he’d just handed me a winning lottery ticket. “Everything you see is inventory,” he said. “We’ll figure out the exact number later.”

Folks, “later” is where deals go to die. I’ve bought and sold more businesses than I can count on both hands, and I can tell you right now that hard-to-count inventory is one of the fastest ways to watch a sale fall apart. Buyers hate mystery. Lenders hate mystery. And you should hate it too, because every unverifiable pallet is a discount waiting to happen at the negotiating table.

So let’s talk about how you actually value the stuff that doesn’t fit neatly on a spreadsheet. No fluff, just what works.

Why Hard-to-Count Inventory Scares Buyers

Here’s the reality. When a buyer looks at your business, they’re not just buying your customer list and your equipment. They’re buying whatever is sitting in that building. If nobody can say with confidence what that is, the buyer does one of two things:

1. Walks away entirely

2. Slaps a massive risk discount on the whole deal

Neither one puts money in your pocket. Inventory that’s scattered, uncatalogued, or sitting in a dozen storage units reads as one thing to a buyer: a future write-off. You want to flip that script before you ever list the business.

Start With a Physical Count That Actually Holds Up

I don’t care how good your spreadsheet is. Nobody signs a check based on a spreadsheet. Get bodies in that warehouse.

• Do a wall-to-wall physical count with a third party present

• Photograph and tag every pallet, bin, and shelf section

• Use two independent counters for anything high value

• Record the date and time of every count session

That third party piece matters more than people think. An independent count gives your number credibility. Credibility is currency when you’re selling.

Categorize the Mess Into Buckets

Not all hard-to-count inventory is created equal, and treating it that way is a rookie move. Break it down:

• Fast movers: easy to value, easy to count, no drama

• Slow movers: countable but need a discount assumption baked in

• Obsolete or damaged: value it honestly, even if the number stings

• Consignment or customer-owned goods: pull these out immediately, they are not yours to sell

That last bucket trips up more sellers than any other. Nothing kills trust faster than a buyer finding out half the warehouse belongs to somebody else.

Valuation Methods That Survive Scrutiny

You’ve got a few tools in the toolbox. Use more than one.

1. Cost basis adjusted for age. Take what you paid, then haircut it based on how long it’s been sitting. Slow movers get a bigger haircut. Simple, defensible, done.

2. Net realizable value. What will this actually sell for, minus the cost to sell it? That’s the number a buyer cares about.

3. Comparable sales data. If similar goods move on the open market at a known price, anchor to that.

4. Scrap or liquidation floor. Worst case scenario, what’s it worth? Know this number. It’s your floor in negotiations.

Run at least two of these methods and reconcile the gap. If your cost basis says one number and your NRV says another, you’d better be able to explain why.

Clean Up Before You Count

This one’s free advice and it’s worth every penny. Before the official count, do a purge.

• Consolidate inventory into one or two locations

• Dispose of genuinely worthless goods and document the disposal

• Reorganize so categories live in the same zone

• Fix your labeling so counts can be repeated by anyone

A clean warehouse tells a buyer you run a tight ship. A chaotic one tells them the opposite, no matter what your financials say.

The Bottom Line

Hard-to-count inventory isn’t a deal killer. Sloppy valuation is. Get the physical count done right, categorize honestly, use defensible methods, and clean house before anyone shows up with a clipboard. Do that and you’ll walk into negotiations with a number you can stand behind instead of a shrug and a “we’ll figure it out later.”

And trust me, “later” never shows up.