When you want to start a brick-and-mortar business, choosing the right building to lease is crucial. You need to be sure that it’s large enough to support your needs, that you will be able to afford the lease each month
Knowing what to take into consideration in order to choose the right building to lease can be difficult if you don’t know what factors need to be considered prior to agreeing to lease a space. The guide below provides a few factors you need to consider ensuring that the brick-and-mortar location you lease will be right for your small business.
Choose the Right Location
The location of your business is vital. You want to be sure that the building is located in a safe area and that potential clients can easily access the building when shopping at your business. You need to have ample parking readily available as well. Choosing a building that isn’t located near similar businesses is essential too because you want to limit the amount of competition you have in the area.
Choose a Building That Can Be Remodeled
Some business leases do not allow for the space to be dramatically remodeled. If you know that you need to completely transform the space in order to make it useful to your business, be sure that there is a contingency in the contract that dictates what changes can and cannot be made to the space. You also need to know if the space needs to be transformed back to its original condition when your lease ends so you can take those costs into account as well.
Determine How Long of a Lease You Want
Most commercial spaces require you to agree to lease them for two to five years. You need to consider how long it will take for your business to get off the ground and if you can afford to pay the lease for the space until business starts to pick up. There are many business owners who don’t realize that they won’t be making a profit for the first few months that their business is open, and they need to account for the costs out of their own pocket or through business loans.
Determine If You Can Sublease If Needed
Starting a business can be risky. There are many small businesses that don’t succeed, but once you sign a legally binding contract to lease a space it can be very costly to get out of the lease if your business doesn’t succeed. Many business owners choose to sublease their leased space if they cannot afford to continue to pay for it themselves. If the contract states that subleasing isn’t allowed, you cannot sublease the space and will be responsible for the rest of the term on your own. If subleasing is allowed, you can sublease the property, but you need to know that you will be the one held accountable for the payments if the new business owner cannot make ends meet.
Determine If You Can Afford the Business Insurance on the Property
When you own a business, you must insure it. The size and location of the building and the safety measures that are implemented to prevent break-ins and robberies will affect how much you have to pay for your business insurance. You can get an estimate for business insurance before you agree to lease the space to help you determine if the cost of the insurance policy is affordable for you. If it’s too costly, you may need to consider another location.
Determine If You Can Afford the Electrical Costs
Having a business with high ceilings and big windows can create a grandiose look, but it can also create very high power bills. You need to make sure that you can afford to the electrical costs for the business before leasing it. Many electric companies will give you an estimate for what it costs to power a building if you provide them with the location. You will need to know the address of the building when getting your estimate, and keep in mind that the cost may increase based on your hours of operation.
On that note, make sure to research different electricity companies beforehand to see which one will offer your the most affordable rates for your business.
Have an Attorney Look Over the Contract
Before you lease any property, you need to have an attorney who specializes in commercial Orange County real estate law look over the contract for you. You need to be sure that everything is legally binding and that there are no areas of concern to you. Since you have never leased a space before, the likelihood that you will be able to identify errors in the contract may be slim. The attorney will know all of the laws for commercial real estate and will let you know if something in the agreement is illegal or if anything needs to be added to provide you with the utmost protection.
After you lease the building, you need to abide by the information listed in the contract. This allows you to rest assured that you don’t incur extra fees and that you are able to stay in the space for as long as possible. Be sure to get a copy of the contract after you sign it so that you can refer back to it later if needed. Once you sign the contract, you are legally bound to it and cannot make any amendments to it, so think long and hard before agreeing to the stipulations in the agreement to ensure that it suits your business’s needs both now and in the future.