You’ve got your business plan, funds, and are ready to start your business. The only hurdle in your way is an encyclopedia-sized commercial lease. Deciphering the legal jargon, strange new terms, and endless clauses can be a daunting task. Luckily, understanding a commercial lease isn’t impossible and can be done with a bit of careful thought. Here are three tips that will help you navigate the commercial leasing process.
Tip #1: Do Your Homework
Just like when looking for a place to live, finding the right commercial property requires research. Square footage and location are always important business requirements, but amenities such as parking, security, or other building services all factor into your decision when choosing a commercial space. Plan out what your business needs, then start searching for properties that match those criteria.
Be sure to compare what’s available in your market. Driving by locations can help give you a general feel for the area. After you’ve narrowed down your list to a handful of potential sites, you can now put on your shoes and do a physical walkthrough. Landlords will fight for your business, don’t settle for the first spot that catches your eye!
Tip #2: Read the Fine Print
Do not sign anything until you’ve read the contract and understand it completely. Many commercial property leases are written for the property owners, thus they greatly favor the landlords themselves. There can be many hidden clauses or terms you may not notice until you’re already caught in a disadvantageous contract. More often than not, you’ll need a lawyer to help decipher the legal jargon.
Commercial spaces often have rules regarding what types of construction or building modifications are allowed. You wouldn’t want a competitor to open up right next door, so clauses limiting who can lease nearby locations are common. Make sure to understand the payment rate. Commercial spaces often set rental rates based on the square footage of the space per year, for example, $20 per square foot per year. Based on the size of your space, you’ll need to do the math to find your exact monthly or yearly payments. Some properties even charge a percentage of your business’s profits! Make sure to read the fine print so you’re not hit with unexpected fees months after you’ve already started operations.
Tip #3: Avoid Emotional Attachment
The people at Forbes agree, one common flaw when choosing a commercial space is becoming emotionally attached. Remember this is business. Understand your space requirements, understand the location, and understand your customers, but don’t trap yourself in a single location. After you’ve done your homework, narrowed down your options, and read your contracts you can begin to negotiate terms.
Make sure to ask for everything your business could need. Commercial leases are highly flexible, square footage rates vary, lease lengths can go from months to years! You may be able agree on the perfect terms with your landlord or you may have to start all over again. Worst case scenario you go back to your original list of options, but do not lock yourself into a property because of emotions.
Getting Your Dream Business Location
Commercial leases are more complex than residential leases, but it’s not rocket science. Remember to do your homework to find the best available options. Leases often favor the landlord, so make sure to have a lawyer translate the legal jargon. The team at http://weisblattlaw.com/commercial-lease/ can help. Never forget that everything is negotiable and that the perfect property for your business is out there, you just have to find it.