Written By: Roger Liddle Originally Published in the June 1988
issue of The Outfitter Magazine.

 

Editor’s Note: This article is courtesy of Roger Liddle, N.O.R.T.H Realty Ltd., North Bay. Roger Liddle is past Executive Director of NOTO (1981-85), represents NOTO on the Tourism Ontario Grading Authority, and is also a tourist lodge outfitter. N.O.R.T.H. (Northern Ontario Resort, Tavern, and Hotel) Realty Ltd. is associated with John R. Marsh & Co. Ltd., Toronto.

At some time, most of our lodges and camps will be sold to new “outfitters”, and we will go into retirement, or a new vocation. Unfortunately, a few camps will either be converted to cottage lots, private cottages/retreats/and hunt camps, or will be left unsold, to become worthless dilapidated buildings, and the land at some time sold as “vacant.” We’ve all dreamed of the time when we will sell, and getting the very top dollar for our business establishment. It all sounds fine in theory, but just how do we go about the “selling” of our business, and when is there a “right time” to sell?

First of all one must deal with the prospect of selling it on your own, or using a professional. Advantages of selling on your own (saving the commission fee) are usually outweighed by the disadvantages, some of which are:

If you utilize a professional real estate firm, remember it is much different than selling a residential house in town. Knowledge of the industry is critical, especially in the eyes of the purchaser. Just ask your residential agent about bear baiting regulations, the moose tag allocation, government financial assistance programs, sport show advertising, or the average HK or AP rates in the area. Use of a professional, in the business is always the preferred route. Would you consider asking your lawyer to do your year end financial statement, or your outboard motor mechanic to fix your sore tooth?

Most tourist camps are sold on their own cash flow, i.e. the business, and cash which it generates, than the land and the improvements and chattels i.e. buildings, docks, equipment, etc… The reason for this is that the purchaser must, usually, pay the mortgage debt (principal and interest) from the cash proceeds from the business, after other operating expenses are taken care of. Consider the examples: (Neither business carries a mortgage)

How much would you pay for the camp (the business opportunity) that generates $25000? How about the one with only $2000? Would you be better off to put your money in a term deposit at a bank? If you were to buy the land, improvements, etc…, how much do you pay for the buildings with 15 years life left in them? What if they only have a few years life left?

When it comes time to sell your business, consider these suggestions:

Above all, plan ahead.

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