SMALL BIZ TIP: IS IT TIME TO EXPAND?
Here we "grow" ! Congratulations! You've grown your business including your team now it's time to move into an office space! Prior to moving into an office space or opening a storefront, consider these options: When thinking about expansion, think long term. First, research your desired area. Sounds like a "no brainer" right? Not really. Some business owners will opt to lease or purchase a retail space just because its "cheap".
Now I'm all about being frugal however, being cheap may cost you later on down the line. For example, purchasing an inexpensive office space that's inconveniently located several miles away from your clients may not be the best option if you have a business that requires consistent face to face interaction with your customers. A centrally located area may be beneficial so that your clients aren't traveling longer than they'd like.
Redeveloped Areas Another thing to consider is Redevelopment. Redevelopment is vital to any city, particularly, local businesses . Look for growth opportunities in your area. Contact your city and regional planners to find out which areas of the city will be developed, the time frame from start to finish of the projects, and the number of businesses, shops and restaurants expected to move into the area.
Meet with a local Realtor You may even want to talk to your local Realtor about any neighborhoods that are undergoing transitions as well. Realtors are great resources because they understand market trends and can best assist you with purchasing or leasing retail/commercial space.
Rent
For small businesses every dollar counts, especially spending dollars! Prior to signing a lease with your landlord read the terms of the lease agreement carefully. If you can afford an attorney to overlook the terms of the lease do it! You want to ensure that you understand what is outlined in the lease, what you're landlord obligations are, whether or not you need insurance, what your legal rights are as a tenant, what type of business you're allowed to conduct. Be sure to understand fully, the operating costs. What will your landlord cover? What costs will be passed onto you as an occupant. You may need to set aside additional savings for the anticipated expenses.
Security Deposits
Unlike residential properties, commercial landlords may ask for a security deposit that covers up to 12 months. In most states, there isn't a "legal maximum allowed limit" to what your landlord can request upfront.
Space needs Improvements
If the space you're renting is in need of improvements, this information needs to be CLEARLY outlined in your lease. What should be included is what expenses will you cover for the improvements and what the landlord is willing to contribute towards the improvements. If possible, negotiate your lease based on the improvements needed. One thing to be aware of is, some landlords will offer to make the improvements on the space, then charge the "upgrades" or "improvement fees" to the tenant. Don't fall for it! Get it in writing who will be responsible for what, so you're not stuck paying a bill you never agreed upon.
Maintenance & Utilities
Your lease agreement will have a section outlining who will be responsible for paying for ongoing maintenance, utilities and building code inspections. First, understand what you're rights are as a tenant and what you're legally responsible for paying as well as your landlord. From there, negotiate the expenses expected to be paid and the date they're due.
Insurance
You'll want to purchase insurance to protect your business and equipment however, your landlord may request that you purchase additional insurance based on the terms of your lease agreement and the type of business you're operating.
Consider these options as a way to protect yourself as a tenant. Know your rights before making the decision to lease any office or retail space.
Have you recently moved into an office space? Are you thinking of opening a retail space?
