You’ve launched a business, and it’s official. You’ve got the license to prove it. The next step is leasing a space and getting to work with customers or clients, right? While that might be true, it’s not quite that simple or easy. When you are leasing business space, there are a number of considerations to pay attention to.
First, you should ensure that the expenses associated with the lease are in keeping with your business plan and budget. Obviously that means you have to be able to afford the price per square foot you are being charged, but the monthly rent isn’t the only expense you might have. Lease agreements could require that you pay for a certain type of signage, contribute to the maintenance of common areas or cover expenses such as utilities or pest control within your space. Many of these expenses are negotiable, so don’t be afraid to ask for changes to the lease.
Always make sure you understand your rights and options under the lease. What happens if business doesn’t work out as planned? Are you locked into a lease for five years? What happens if you grow unexpectedly? Do you have a right of option on nearby property owned by the leasing organization? Can you sublet the property? These are some questions to ask.
Finally, don’t be afraid to ask about co-tenants. What type of businesses does the property owner lease to or plan to lease to? Would those businesses have any negative impact on your brand? Some tenants require landlords to have provisions in place to vet new business tenants so that the interests of existing tenants are protected.
If you have any questions about a commercial lease or want to ensure you are getting the best deal possible, consider having a lawyer read over all paperwork. This is especially helpful if the lease contains a lot of fine print.
Source: U.S. Small Business Administration, “Leasing Commercial Space,” accessed April 22, 2016