Business Leasing for Dummies
The decisions regarding office space may be some of the most complex and unfamiliar decisions that you will have to make when starting an office. Acquire too much office space, and you will be paying too much. Acquire too little office space, and you will have to move after only a short period of time. Determining the right amount of office space is one of the most important decisions that you will need to make in order to right-size your business. The business plan growth projections need to factor into anticipated growth so that scarce capital can be allocated accordingly.
You’ve heard the phrase “location, location, location.” This is another important consideration. Depending on your business, and especially if it is a retail or dining establishment, the location will factor into the success (or failure) of your business.
Before you start looking around at offices, you must first determine how much office space you will need. Also, if your business is a franchise, you need to understand what the mandated space requirements are so that you are in compliance with the franchise agreement.
Take the time to properly understand and calculate how much office space you will need. Since most commercial space will require a broker in order to lease or purchase, a prudent next step is to contact a commercial real estate broker who is local to the area where you are looking and understands the area well.
Selecting the Right Location for Your Business
Choosing the wrong location will have more of a monetary impact on your business than just the cost of the rent (or mortgage payments). Consider all the implied aspects of choosing the right location for your office, and you will minimize your costs while maximizing your value. If your business is a retail shop or a restaurant, be extra careful about the location choice. For shoppers and diners, ease of access and convenience is key to attracting customers and retaining them. It is also always a good idea to study the demographics of the area to ensure that the customer pool is the right size and type for the business.
The only exception to requiring an ideal location for your business is when your business is 100% e-commerce based. In this case, the space will be used for storage of your products that are sold online and shipped to the customer from this location.
If you have already rented or purchased a home to live in with the help of a residential real estate agent, then you are already familiar with the concept of what a commercial broker can do to help you land the right sized, appropriately located space for your business. A commercial broker is licensed to assist you in finding and transacting either the leasing or the purchasing of commercial space – this is space that has been designated as an office, not living space.
Just as you would do your due diligence with a home purchase or rental, it is important to have a solid idea of what you are seeking and to have the broker use your top priorities to search the right office space. If you leave the selection criteria to be too open ended, you will end up spending a lot of time in the field looking at locations that are not useful for your business.
One final note, if your business will rely on traffic for its survival, before heading out with a broker, reach out to a business owner that has a business that is similar to yours in terms of the client base and get insights about what they looked for and how this worked for them. Chances are, these types of discussions will prove fruitful because these business owners have already been through what you are about to embark on and they can help you to develop your broker priority list for the ideal office space quicker.