Renting new premises can be both a daunting and exciting experience, as you are starting a new venture, however, you are also making a financial commitment which means there are rules you need to follow. Here are some tips and tricks to avoid any pitfalls before signing on that dotted line.
Make it legal
Signing your first or a new lease can be exhilarating and you just want to get started as soon as possible, however, before you sign any agreements make sure you obtain legal, financial and business advice. This is a must as you could land into a whole lot of trouble if you don’t know what you’re getting yourself into. If it looks too good to be true it probably is, so always read the fine print!
I want to stay
Make your lease part of your business plan. This means that if you are starting a new business, for example, you need to know how long you want to stay in these premises, so you can include these terms when negotiating your lease.
You don’t want to be in the position where your store is doing really well and products are flying off the shelves, only to be told you need to move out next month because your lease is up and you can’t extend the lease!
Location, location, location
Don’t limit yourself when it comes to looking for the right space for your business. Take your time and visit several locations that could be suitable. Make a list of the pros and cons of each before you decide on the right space for you. Know who your target audience is i.e. demographics, age and buying behaviour.
Also, if the premises is on a busy shopping strip or centre, take into consideration your competition, foot traffic, parking, public transport and visibility of the space for your customers. It is much better to take a bit longer and make the right decision than rush the process only to end up looking for a new space six months later!
Your new best friend
Don’t overcommit! Know your finances and what you can afford before you sign a lease. This is where your accountant becomes the most important person in your life as he or she will help you determine what you can realistically afford in terms of rent and other costs associated with leasing, such as fitout and operating expenses.
Follow the rules
There are different rules that apply to different areas so do your homework and check out your local government’s planning and zoning regulations before deciding on a location for your business. You might need approval for certain things or there may be restrictions put on the premises that you weren’t aware of.
Also, get everything in writing! This includes any agreements you have made with the landlord in relation to the lease, so you don’t get any nasty surprises down the track.
No thank you
You can say no. As long as no papers have been signed, if negotiations hit a snag for whatever reason, it is ok to walk away. Entering a new lease for your business is a big deal, particularly financially, so if you are not 100 per cent comfortable with all the terms and conditions of the contract, just walk away and find something that is more suited to your needs.