5 Telltale Signs That You Have Chosen the Wrong Commercial Rental Space
Leasing a commercial property is one of the largest business expenses. Many businesses incur huge losses owing to renting the wrong commercial space. However, your business will never go wrong when renting space from industry leaders like Forum properties. How do you know you have chosen the wrong rental space? Here are a few telltale signs:
The Rent Exceeds Your Budget
Are you overburdened with unexpected hidden costs? The commercial lease agreement must be meticulously read and examined for identifying any uncertain finances, taxes and maintenance costs. These, in the long run, can cost a sizeable portion of the business capital. The lease should specify the responsibility of maintenance cost, plumbing and electrical system. A written document is usually preferred over a verbal contract. Experts in this field, who can negotiate the terms of the contract, are recommended.
This is indeed a trap, a long one at that. If you have a contract that is signed for a long term of 5 years or 10 years, it’s a sign of a bad deal. Business cycles are unpredictable and subject to fluctuations. A rigid agreement could hinder and make your business incur financial loss in the long run. While in situations of losses, it will be difficult to cut down on the costs incurred in renting. It is ideal to have negotiated and clearly mentioned in the agreement regarding the changes in lease period. If these clauses are missing, it is a sure shot sign of a bad agreement, which was made in haste.
Too Much Space or Too Little Space
Your space is inadequate for the requirements of the business expansion. Both overestimation and undermining the space requirement can lead to bad rental decisions. You need to take into account of the number of employees who will work there and aspects like whether you would need cubicles. Take into account the supplies room for inventory storage. Choosing the right commercial space without exceeding the budget is the key to avoiding bad commercial rental decisions.
Not Getting Enough Foot Traffic
The location is very crucial. The place where you set up your business can impact your revenue greatly. If you are not getting enough foot traffic, it either means there are already other competitors in the area who have a loyal customer base or your business does not appeal to the demographic of that area. You may be the sole commercial outlet for ready-made garments, but still make no business if the buyers in that area tend to get garments tailor-made. Often, the commercial spaces that have good parking space are easily accessible and easy to get more foot traffic. You also need to take into consideration the crime rates in that area.
Amenities and Interiors Matter
Your interior designs don’t reflect your business ethics or lack the visual appeal. Is the lighting inadequate? Most businesses often overlook these aspects. Every commercial space should have aesthetics attached to it. If it’s a luxury women’s apparel store, it ought to have good lights, great design and soothing interior that imparts a relaxing shopping experience to the customers. Whether the customization is allowed depends on the commercial space owner, but look out for more flexible spaces in this regard. The cost of customization must be discussed with the property owner and the demographics of your customers must be kept in mind.
Lastly, the lease is the most important document when renting a commercial space. It is a legally binding document that governs the actions of both the owner and the tenant. A lease must be signed. A lengthy 50 page lease may seem like an unnecessary hassle, but in the long run, it is the most critical asset you can have.