Has your small business outgrown your garage or home office? Perhaps you are looking for a second site to expand your current operations. As eager as you may be to get things moving, there are some important steps you should not skip before signing a lease on a commercial property.
Signing a lease may commit you to a location that is not ideal for your business. Additionally, without taking the appropriate steps, you may find yourself bound to terms that do not benefit you or your business and may needlessly cost you money. Before beginning any commercial real estate transaction, you would be wise to obtain solid and experienced legal advice.
First things first
Whether you have a location in mind or are scouting out prospects, research will be your friend. You are not merely looking for a building that is the right size and aesthetically pleasing, but you must also consider the following factors and more:
- Is the property situated near your client base or potential clients?
- How financially solvent is the building owner? Is the landlord also the owner?
- Are other tenants of the landlord happy with their experience?
- Is the area zoned for your industry? Do not take your landlord’s word for it.
- Do local ordinances include nuisance laws or environmental statutes that may affect your business?
Be prepared to spend a considerable amount of time on this phase of your venture. Some business advocates say that researching for up to two years before making a decision is not unreasonable.
Reviewing the lease
Once you have found a property and have a lease in hand, there is more work to do. The terms of your lease must benefit you and not just your landlord. For example, does your rent include insurance, taxes and other costs? How does the landlord handle maintenance issues? What about utilities, parking and security? These are only a few matters that will be critical to your business.
It is a good idea to take the time to carefully read and examine the lease document. Many business owners decide not to take a chance on missing some important legal details, so they enlist the aid of a business attorney to review the lease, advise them and assist them in negotiating more favorable terms. By taking these and other important steps, you may improve your chances of opening a successful operation at your new location.