Key retail and commercial lease tips for your business
A commercial or retail lease is a major commitment for business owners, especially when you consider the lengthy term of the legal agreements and the unknown issues that might arise along the way.
Having owned and run the award-winning Ampersand Café, Realise Business Advisor Katherine Blizard has the practical insight and experience to help businesses navigate this complex environment, either before the lease negotiation phase or when and if business difficulties arise.
Some key words of advice include:
- Before signing a lease, do your due diligence in terms of projected foot traffic. This might involve counting the foot traffic yourself to be certain.
- Review your food choice and determine whether that choice has been successful in the area. Research the types of businesses that have closed down prior to you starting up, to understand the cuisines that may not do well in that area.
- Inspect the premises and any equipment to identify leaks, structural damage, faults or issues.
- Negotiate a rent-free period and do not accept excessive rent increases within the contract.
- Engage a solicitor with leasing experience, listen to their advice and be weary of leases that are heavy with clauses.
- Don’t be rushed by real estate agents. Sites become available every day so if you miss out on one, a new one will come along.
- Work on your relationship with your landlord. Investing in the relationship early will help you negotiate prior to signing the lease and throughout the rental period.
- Many rental agreements are based on the ‘foot traffic’ model. While this is important, use various ways to attract clients, such as social media among other digital channels, to minimise your risk if foot traffic is disrupted.
Realise Business can help in the following ways:
- For those thinking about leasing a site, we can help prepare for negotiation with your agent for the best outcome from the lease, explaining key components and reducing risk.
- Along with a solicitor, we can assist with the due diligence in terms of property and equipment inspections.
- We can assist with business plans and financial forecasting, including a competitive analysis that will help the business survive.
If you’re unsure of the flexibility in your current lease, Realise Business advisors can help you review the contract and analyse your numbers. We guide businesses to take steps to fix their problems, whether it is making cashflow improvements or in changing marketing tactics.
Katherine recently worked with Ya-Malalysia to successfully negotiate a 22% rent reduction at their Parramatta’s Eat Street location. Her key advice to Parramatta businesses that may be impacted by light rail construction is to start having conversations with landlords now. There are a number of ways that rent reduction can be achieved, but the sooner those conversations occur, the better the outcome.
To book a session or know more about Katherine Blizard please click here.