Once you find a leased location that you think is perfect for your business, you have to contact the property owner and discuss the lease. You mustn’t let your desire to put your business in a specific place cloud your judgement. Instead, look at it line by line to determine if it is an arrangement that you will be able to live with.
You might be surprised by how many points can have an impact on your business. This is because commercial leases are very different from residential leases. Here are some points that you must consider.
Full financial cost
Some commercial leases include clauses that require you to hand over a certain percentage of your profits to the person who leased the property to you. This can have a big impact on your company’s bottom line. You also need to review the lease to determine who is responsible for paying maintenance and repair costs, as well as other expenses related to the rental.
You have to think about what external properties the location has and how those might work for you. Considerations like parking can have a big impact on your business since your customers need to be able to park if they are going to frequent your business. Outdoor signage and other attributes are also important since these factors might play a role in how you convey messages, such as specials, to your potential customers.
Renewal and termination points
Leases are only valid for a specific amount of time. You must read the lease to determine your rights for renewing the lease when it is coming to an end. You also need to find out what happens if the lease is terminated. Some leases will have special criteria for terminations that are due to factors like foreclosure or condemnation of the building. Even if you don’t think that these will occur, you should find out what will happen in these cases.
Use of the premises
If there are limitations or other points related to how you use the premises in the commercial lease, check those carefully. The scope of your business might change as your business grows. Ensuring that you aren’t limiting your business because of the lease is crucial.
Even though you take the time to read the lease, it is usually a good idea to have someone else review it as well. A second set of eyes may discover points you may have missed.