Do you have a Business Plan?

As a real estate representative, I often find that new retailers, business owners and restaurateurs look first for the location before really nailing down a good business plan. For whatever reason, maybe they’ve seen a relative do it or they are just so anxious to jump right in, they think that all they need to do is find a location, move in and be up and operating their new business.

For me, this is a wonderful opportunity to really make someone’s dream come true. I can help them build a team of professionals, create a business plan, find a location and ultimately make the business a success. On the other hand, however, this is a very scary notion because if you are trying to open a business without a plan, I am really worried about you and so the Landlords will be too. It’s great when I get someone who is open to some advice, but when you get that one person who just wants you to push through, find them a location and negotiate a lease, there is almost no hope for them.

A business plan is more than a proposal to investors (if you have them) and is necessary in every case (even if you don’t have investors). In it’s simplest form, a business plan is an outline of the goals for the new business and how the owner/operator will reach those goals. As in life, it is important to not just have goals, but have them, and how you plan to get there, written down. As an owner or operator, you must have an idea of where you are and where you’re going. In my world, I want you to have a business plan because I want to know that you are real and that you have seriously thought this business idea through. In today’s economy, businesses, even well known national brands, are failing. I do not have any interest in helping someone open a store only to see it fail. But, more than that, I CANNOT even help you open a store without a business plan.

Think about it. You want to open a restaurant, but you don’t have a business plan. You have no idea what your budget for the first year is, you have no guess as to how much you might profit in the first year and you don’t even have a business account; all of the funds are coming from your personal checking. Still, you come to me and you ask me to find you a location. I find it and then you want me to negotiate an under market deal with a minimum security deposit. Now, it’s time to wake up. Landlords aren’t idiots. They negotiate leases almost every day of the year. They watch businesses come and go every day and in some cases they even bare the brunt of that when a business leaves their space and they pay the rent on a vacant space for months. In any market, and especially today’s market, Landlords are even more cautious when leasing space to Tenants. The deal you will receive is directly related to your risk as a Tenant. And the only way a Landlord can evaluate your risk is to look at your financial information and yes, you guessed it, your business plan. He needs to believe in you and know that you are going to be able to pay his rent.

What would you do if you were a Landlord any someone came to you wanting to Lease your space but didn’t have a business plan? What would you say to them?