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  1. #1
    Join Date
    Jan. 31, 2010
    Location
    Alberta
    Posts
    4,030

    Default Selling a barn vs selling the business. Which sells better?

    There are a few riding stables around here for sale. One is selling just the property and moving the business to a new facility, but the other is being sold to move to a private facility, so I am thinking they are selling the business as well, with the old trainer likely wanting to stay on.

    Which do you think sells better? A barn that is actively in business and comes with clients/trainer, or a barn that is empty, so easier to keep clean and in good repair? What about a barn that comes with clients and an good business, but where the trainer is the owner, so the trainer is not staying on?



  2. #2
    Join Date
    Nov. 16, 2001
    Location
    Canada
    Posts
    1,642

    Default

    I think it depends.

    A barn was purchased last year close to me, by clients of a H/J trainer who was working out of another barn. It wasn't a business prior to that (private owned, new indoor arena, but not a boarding or training facility), so all they could have bought was the property. Worked, because they were looking to buy something to move an established business/client base into.

    I think a lot of times people buying barns to start a business will be in that kind of situation. Already have something to continue. If they're starting scratch - then buying the entire business may be more beneficial.

    From a tax perspective, it's generally better to buy the assets than shares in a small business (where the assets stay on the books at the rate they've already been depreciated to, vs entering the "new" business at current fair value), but from a SELLERS perspective, a share sale of the business is FAR more beneficial, as there are not only less tax implications, but there is also the ability to use their personal capital gains exemption, which can serious reduce the taxes paid.

    I think it'll depend mostly on intended use... if they want to buy it just for their own property - just the property. if they want to start a business but don't have a client base and the client base may actually come with (vs moving on to other trainers if that trainer is retiring...), the business would be a better purchase. If they're established and want new property, it could go either way... depending on the scenario of the business sale. Is trainer retiring? or moving elsewhere? Where are clients already intending to go? Stay if someone good moves in? Move on to trainer x, y, or z that they already know of? Those kind of things...

    so at the end of the day..hellifiknow. Lol. But if I was a trainer/owner selling because I was getting out of the industry, I would probably try to sell the business lock stock and barrel, as a share sale. Except would they want the horses? The client base? the....? Would it limit me in being able to resume later? Those are kind of important questions.

    Probably easier to just sell the assets.
    *&*&*&*&*&*&*&*&*&*&*&*&*&*&*&
    "Show me the back of a thoroughbred horse, and I will show you my wings."
    &*&*&*&*&*&*&*&*&*&*&*&*&*&*&*&



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