The process of leasing a commercial space can be complicated and confusing, especially if it’s your first time. That’s why it’s important that you take your time to fully review the agreement. It’s also recommended that you exercise some flexibility and consult an expert for better decision-making. There are a lot of benefits that come with a commercial retail space. One of the benefits is that the overhead costs are typically lower compared to owning a property. This option also offers more space and lease length flexibility as it can lead to business growth or downsizing it.
Some of the things that you must consider when looking for a shop space for rent are the needs of your business. You must also consider the area’s demographic and ensure that you find your target market in the area. It’s also crucial that you find a space that’s the right size for your business. You wouldn’t want to pay for more space than you need.
Why Renting Out Office Space is a Better Option
An office space is a reflection of your business and it displays professionalism if it’s organized and conducive to your employees. It helps you to enjoy an unimpeded ability to grow your organization. Getting a proper office, however, can be time-consuming and costly. That’s why rentals are the best option if you’re looking to expand your business. Real estate is expensive and the intense competition that’s currently on display means that you can get priced out of the best business location. Geography is very key for any business. That’s because it affects how easily clients can find you.
Shop spaces for rent are more plentiful and affordable options that can get your business set up in an affordable locale. It enables you to get access to key downtown amenities and prime business locations, which helps you to attract and appeal to clients. The other benefit of renting out is flexibility. Office sizes are based on the needs of your business. If it enjoys more success, you’ll need to accommodate extra employees to handle the demand. But if your business is not successful, you’ll have no need for more staff and space. If you own an office property, you might be constrained on what your options are regarding scale and size. Commercial retail spaces on the other hand are flexible. They can also be renewed for smaller or larger properties based on the needs of your business and the duration.
The other benefit of finding a shop space for rent is that it alleviates you of all financial responsibility. This is when it comes to paying for the routine maintenance of the building. Unless you and your employees are guilty of misusing the equipment provided or have destroyed the property, technically you’ll not be liable for covering the costs. Routine maintenance includes repairing broken-down equipment and repairing walls. Usually, the landlord is responsible for ensuring that all the office equipment they supply is in good condition. They are also responsible for keeping the premises clean and secure.
A Guide To Renting Out Shop Space For Businesses
Although physical retail stores are an important tool in growing your business, finding a shop space for rent can be daunting. That’s because the leasing process can be arduous and overwhelming. This leasing guide will, however, give you an overview of the leasing process. You’ll find strategies for selecting the right location to help your business grow.
1. Understand What Your Business Needs In a Space
Looking for a shop space for rent can be simultaneously exciting and overwhelming, just like it is when shopping for an apartment. Being prepared, however, helps to reduce the stress of your search. You must be careful not to dive into the process without a clear idea of what your business wants and what you can afford. It’s important that you prepare in advance for a seamless and successful process. You need to know how you will use the space, your desired amenities, and set price guardrails. This will help to ensure that you go over the budget. Remember that every shop space will have a different feature. You must, therefore, understand your priorities. It’s also important that you consider the business’ trajectory and objectives for the near future. It helps to ensure that a potential space grows within your company. So, before you start touring shop spaces, ask yourself where you see the business in one, three, or five years.
2. Develop a Business Plan and Budget
Preparedness whenever you have a business project is very vital. A business plan in this case, helps you to determine your goals and understand the expenses. It also helps you to know the aspects of the project that will need additional expertise. A business plan may also come in handy when contacting landlords. Keep in mind that an experienced leasing manager will research to ensure that the new tenant can pay the rent. Also, be ready by understanding your numbers and telling your business’s story. You must also be ready and confident in your pitch. Ask the following question when developing your business plan:
- Who is your target market?
- What are the projected sales?
- What would you like your store to look like?
- What are your business expenses in terms of the number of employees, merchandise, and point-of-sale?
3. Take Your Time
When looking for a new workspace for your growing team, it’s easy to go for the first shop space for rent that seems to meet your needs. But, it’s better that you take your time. Preserve optionality for as long as possible, which can mean embracing short-term leases as you look for the perfect retail space for lease. Note that locking in a multilayer lease when your business is growing can inhibit growth. There are also chances that you will stand up two different shops at the same time. The problem with this is that it can cause logistical challenges and cost inefficiencies.
4. Develop a Location Strategy
Choosing the right location is important once you understand your goals and budget. You can do this by thinking of your target market and where they shop. If you’ve been operating online, find the right data to help you understand your customers’ shopping habits. This will help you think of how you’ll drive potential customers into your store. Will you do this by depending on high-volume foot traffic or would you rather rely on the internal marketing efforts to create awareness? You need to determine the kind of environment that’s conducive for your kind of business. Should it be in a traditional mall, an open-air center, or will a street location be ideal? This is important as it will help you to narrow down your search.
5. Source The Location
You can now start looking for your shop space for rent and there are various ways of finding an ideal one. You can use online services such as Hi-Reit to find storefronts in your target market. Networking is also important at this stage. It will help you to reach out to other businesses and share your search on social media channels. It helps to attract leads. You can also source locations by driving around your target market area and looking at the shopping centers that meet your location strategies. Some landlords usually have lease signs on the available buildings. Other shopping center landlords prefer having a lease page with the contact information on their websites. Using a commercial real estate broker is also effective when sourcing locations.
6. Tour The Location
It’s important that you schedule a tour to the locations after reaching out to the landlord. We also recommend that you bring one of the stakeholders to the meeting. Touring with your contractor, for instance, will help to save time and costs during the construction process. You can also spend time outside your possible retail location and observe the traffic. It’s crucial that you monitor the area on different occasions. Once you’ve decided on your preferred location, your would-be landlord will give you a letter of intent. The LOI outlines the basic terms of the lease such as rent and the length of term.
7. Review The Lease Agreement Before Signing
When reviewing your lease agreement, chances are that you’ll run up against some confusing phrases. That’s unless of course, you’re well versed in real estate. A lot of information concerning the search of the shop space for rent is communicated in industry terms. It’s not done in the everyday language that tenants can understand. A tenant may, for instance, understand “total rent costs” but you may not know what “triple net lease” is, something that a broker can say. You must avoid ignoring such unfamiliar terms or brushing them off. So go over the lease with a fine-toothed comb as ambiguity can be common when it comes to the terminologies in leases. It may, for instance, be unclear on who is responsible for payments.
Such details may not be uncovered until down the line when it’s too late. Thus, you must feel free enough to ask questions. In any case, no one cares about your business more than you do. It’s also vital that you consult with an expert. That’s because no matter how much research you conduct, there can never be any replacement to talking to an expert. Remember that there will always be elements in the process that you do not understand. This can leave you vulnerable, hence leading you to make expensive mistakes. By regularly consulting an expert, for instance, you can minimize such risks.
Another important factor to remember would be flexibility in the process. Considering that there’s no way to predict the outcome with accuracy, flexibility is important in helping you make adjustments and alterations when necessary. If you have a solid outcome looming in your mind, chances are that you may fail to live up to it in real life. And lack of flexibility could mean missing out on great opportunities because they appear to require a lot of work. After reviewing the lease, you must keep in mind that you can walk away from the lease negotiations if the agreement does not set your business up for success. If it does, however, you can go on and sign it.
Final Take Away
There’s no doubt that the leasing process can be overwhelming. However, physical stores can be an effective way of acquiring new customers and growing your business. Preparation is also important if you’re to succeed. Understanding your target market, for instance, and setting a realistic budget will set your store up for success.