It doesn’t matter if you are a new business owner or already adept in the field. One certain thing is that throughout your business career, you will constantly be faced with making tough decisions. Not to cause any alarm with this, but some of your decisions will either make or break your business.
For example, starting your business career, you will obviously need a professional location to conduct your business. The issue now is that the type of deal you land yourself while looking for a place to conduct your business will either ruin it or give it a solid start.
The importance of getting a favorable commercial lease deal can never be overstated. Some business experts even consider that the biggest step in a business owner’s entrepreneurial journey. This is because the new location will be your business home for many years.
One uncomfortable truth, however, is that commercial lease agreements are always made to favor the tenant. And if proper care is taken, you can avoid walking yourself into an unfavorable contract. But the good news is that in anything that deals with binding contracts between two parties, as long as you don’t rush into signing the deal without understanding the terms first, you won’t run into problems now or in the future.
Therefore, in this article, we will highlight some helpful tips you need before you sign that commercial lease.
What Should be Included in a Typical Commercial Lease?
We always advise people that before they commit to any commercial lease, they should seek professional help first. But if, for one reason or another, they couldn’t, here are some things they need to look out for before they commit to a commercial lease deal.
- Authorized usage
- The amount of the rent
- Insurance
- Exterior appearances
- Provision for modification
- Termination Clause
- People with Disabilities Act compliance
- Subleasing clause
- Terms of the lease
- Option for exclusive use
Tips for Your Next Commercial Lease
If you are new to the business world and have never negotiated a commercial lease, this section is just for you. The commercial lease process can sometimes be intimidating and overwhelming, particularly for first-timers. Therefore, in this section, we will give you some tips you need before you sign that lease agreement.
· Understand the Full Financial Commitment
Before you commit to any lease agreement, you need to assess your company’s current financial health. As people often say, money makes things happen. Therefore, you need to clearly understand what the lease will cost you now and when it is time to renew. If you are not financially buoyant to acquire your dream business location, you may consider obtaining a commercial real estate loan. Some commercial banks are readily available to help you secure your lease.
You should note that starting your company in debt is only sometimes wise. But if situations demand it for whatever reason, you need to weigh the pros and cons of securing the loan before making any decision.
However, not only should you check your company’s finances or budget to know if you can afford the commitment, but you should also assess your company’s cash flow, the possible risks, and how much you intend to generalize annually.
· Familiarise Yourself With all the Real Estate Terminology
Another thing aside from your financial status, you must consider another thing before you lease a commercial space: getting yourself familiar with some real estate terminology. You, as a newbie in the business, need to be able to differentiate between terms such as “rentable” and “usable” space, the different classes of commercial property, real estate taxes, insurance, operating costs and maintenance costs, etc. Understanding all this will go a long way in helping you navigate the negotiation processes.
· Always Think About the Long Term
Assuming that you have found a perfect location for your business and, most importantly, that you can afford such a place. Then it would help if you had a long discussion with yourself or an expert about your long-term goal before you commit to any deal. We have noticed that quite a number of new start-ups often sign a lease agreement without thinking about the future of that location and the effect it could have on their business in the long run. For one reason, you may only plan to stay in your leasing location for a while. For example, your business venture may exceed all expectations regarding sales and demand, and, therefore, you will likely change to a bigger place.
Your business location will also serve as your company’s footprint. If the location or the space is already associated with a bad reputation, it could negatively impact your business and vice versa.
· Don’t Try to do it All on Your Own
In case you didn’t know, the real estate world can sometimes be very tricky, particularly for new start-ups. Often, at times, new business owners run into avoidable problems because they want to do it all on their own. While it is okay to get involved in the entire leasing process, it is also advisable that you employ the services of professionals to help with your course. Not only will they negotiate a term that will work in your favor, but they will also be there to defend you when there is a breach in the contract.
Conclusion
As we have said earlier, before signing a commercial lease, you need to understand the contents of that contract. This is important because you can even run your company into the ground if you sign an unfavorable agreement. And the best way to get the best deal possible is by hiring a qualified real estate attorney to come and assist you throughout the entire process.
If this all seems a bit overwhelming, never fear – the professionals at Saanichton Lawn Group are here to help every step of the way. From leasing to property maintenance and everything in between, we’ve got you covered. Contact us today for more information on how we can help make your next commercial lease a breeze.
