A little bit ago we talked about some important considerations for picking the right location for your small business. While all of those suggestions are still very important, there are some more specific things you should know if you plan to rent or lease.
1. Negotiate the Terms
Don’t just assume that what you see is what you get. The last thing a landlord wants is to leave a space unoccupied. This gives you some power in negotiating terms that work better for you. Some things you should consider fighting for include: included utilities, flexible lease duration, lower payments, and an agreement not to raise rates for as long as you are a tenant and provided you continue to make timely payments.
2. Get a Professional Opinion
Realtors, agents and lawyers exist for a reason, and it’s probably a bad idea to assume that you understand all the ins and outs of a rental contract. Have a professional walk you through the agreement and point out potential hazards. Without a professional working on your behalf, a landlord will find it’s easier to take advantage of you. Renewals, expansions and termination rights are all things that could make or break a deal for you.
3. Check Up on the Landlord
Before you sign on the dotted line, learn what you can about the landlord. You can get some basic information from other tenants if you plant to rent space in a multi-unit structure, but beyond that you’ll want to be sure that the property owner is financially stable. If ownership changes or you’re forced to relocate, it could have a huge impact on your bottom line. Tenants aren’t the only ones subject to credit checks these days. If you have the opportunity to learn more about your landlord’s financial status, you should jump at the chance and play it safe.
4. Be Prepared to Pay a Deposit
Business owners, like private citizens, are usually asked to pay a deposit on a rental space before they move in. This is important to the landlord because it helps cover expenses in case there space is damaged or payments are not made. You should be prepared to put down a deposit that amounts to 10-15% of your total lease amount. That’s not a small chunk of change, so don’t want to be surprised when you’re expected to hand over a check before you move in.
5. Make Sure Everything is Covered
A lease agreement should cover all the bases including: the amount of rent and any planned increases or escalations is cost; the length of the lease; terms for renewing the lease, who is responsible (landlord or tenant) for utilities, maintenance, insurance and tax fees; formal descriptions of the rented space, it’s condition and included amenities or services; a list of improvements the landlord agrees to make before you move in; whether or not subleasing is allowed and under what circumstances; and the steps and conditions required for terminating the agreement.
Opening a new store is an exciting step for a small business owner. Make sure you protect yourself before you sign that rental contract or lease.
Image credit: gerard79
Personal safety should be our first priority especially in situations where contract is involved. As much as possible, we should seek for legal advice before we sign in any contract.