Where would you like to locate your business? There are many factors you may wish to consider. Are you just starting a business or are you relocating your existing business? How much traffic will there be near your business? Is your business the destination or a stop along the way to someone’s destination? Are you interested in purchasing property as an owner/user, or would you rather become a tenant in someone else’s property?
For new business owners, let’s assume that you’ve decided the type of business you want to operate and you choose to lease rather than buy. You’ve arranged for bookkeeping services, talked to an attorney about conducting business in your locality, and have presented your business plan to your friendly neighborhood banker who believes in you and is ready to back your dream. What’s next? You need a place to locate your business!
Current business owners have already taken care of most of the preliminaries facing the new business owner. However, you still have to contact your banker, printer, suppliers, and, most importantly, your customers about your relocation.
How do you decide where to locate? The success or failure of your business could hinge on the location you choose. You will need to find out several things, such as the number of cars passing by and what time of day they pass by your business as well as the demographics of the surrounding area. Of a more immediate concern are things such as zoning ordinances and terms of the lease.
If the current zoning of the location you’re considering permits the use you intend, then you will have the opportunity to negotiate your lease. Depending on the area and type of property, there are different types of leases available. Many commercial lease rates are expressed as a dollar amount per square foot triple net (i.e. $18 SF NNN). To help you figure out your cost per month, simply multiply the price by the square feet and divide by 12. Then you’ll need to add the triple net costs (usually maintenance, taxes, and insurance) that are passed on to the tenant by the owner. There are things that you can do to get the landlord to give you more favorable terms, but I’ll address those in a later blog.
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