For most businesses, leasing space is a challenge and can be a positive or truly negative experience. Growing a business to the point where either the home or one-person office is too small is a huge step — mentally, emotionally and financially. The Internet has been a game changer in our society on many levels. This is especially true in the world of real estate, where there is an abundance of information at our fingertips.
So what do you do with this information?
First, make a list of what your needs are versus your wants. How many things such as offices, rooms, storage and IT do you need? Think about where you are today and where you think you will be in the next three to five years. You do not want to move once, finish a space and then outgrow it in the short-term future and have to move again. Figure out what would be the extras you would like but are not a requirement.
Next, identify where your market is and whether your location is critical to your success. For some businesses, location is the only thing that matters. The wrong location can literally make or break a business. For others, the location is not critical, but there may be other factors that are. Figure those out and add them to your list.
Create Your Budget
Determine what your business can afford for rent, utilities, payroll, etc. It is important to be realistic. You should do this at the beginning of your search, not at the end.
The best thing you can do is locate a commercial real estate agent to help you with your search. Whether it is from a referral or an Internet search, there will be a company that can help you. Interview them just as you would an employee — there will be a right fit and you should be able to find the right person to help you find that new home for your business. One of the greatest secrets most people do not know — you probably do not have to pay for their services, as generally the landlord leasing the space will agree to pay your agent their commission. Clarify this up front!
Finding That Perfect Space
While you search, take into account your needs along with the potential needs for construction, finishing, painting and flooring. These items potentially can be negotiated into the deal. Other things to think about: free rent, security deposits and any additional costs up front. Take the time to ask questions about the landlord and property management as well. Remember, you will be dealing with them for the duration of your lease. If it is not a good fit, you need to decide how important that is in your decision.
Your agent should be able to help steer you through the ins and outs of the deal, such as operating expenses, tenant improvement work, personal guaranty and other items specific to commercial lease agreements. The agent does not take the place of an attorney but should be able to help educate you and help you negotiate the total deal that works for you. It is not just about the rent figure.
Closing the Deal
Once you have agreed upon the terms of the deal, usually you will sign a proposal or letter of intent. From that point, a lease will be drafted. Have an attorney review the lease agreement for you. It is money that will be well spent.
You do not have to become a real estate guru to locate the right place for your business. Some preparation, planning and finding the right experts will help you find the perfect place every time. ◆