When you’re opening a business, location is everything. For retail operations you need a place that lends itself well to walk-in traffic. But, even if you’re in a service industry, or a B-to-B field, location can still play a big role in creating the perfect business environment, retaining your employees and supporting the logistics of running your business day-to-day.
There is plenty to consideration before you lease a space, and it’s not just about the money (although, that is part of it too). Let’s start with a practical checklist of what you should look for in a lease:
- Lease duration: It’s important to understand the term of the lease and the mechanics of any renewal options. How long do you want to be in this space? If this is a location you’ll grow out of? Be aware of what you’re signing on for.
- Rent: Make sure it’s clear when rent is due, how much is due, and how it should be paid. Understand if there is any “pass-through” of increased property taxes or maintenance costs.
- Subletting: If you don’t need the space for the duration of the lease, or if you outgrow the space too quickly, do you have rights to sublease? This might be something to clarify up front.
- Physical condition: Do you need certain improvements to happen before you move in, like changing walls, electrical connections, etc.? What will be the general condition of the space when you move in and how should it be when you move out?
- Landlord responsibilities: Will your landlord be able to live up to all of his or her obligations including maintenance and up-keep? Whatever expectations you have, make sure they’re in writing.
- Improvements: If you think you’ll want to make changes to your space during your lease by adding new carpets, more office space or additional counters, make sure your lease allows for improvements. And, clarify with your landlord what they’ll be responsible for covering and what you’ll be responsible for.
More than just the rent
The items above are important to consider, but there are also a number of things to think about that go beyond practical considerations like rent or lease terms.
- Convenience: No one wants to make a long, tedious trek to get to you. Parking or an easy commute are important to both clients and employees.
- Access to services: High-speed internet, phone lines and cable TV, might be necessities for your business. Do your research ahead of time by calling local phone and cable services or talk to existing tenants about any logistical issues that might impact running your business day-to-day.
- Surrounding traffic patterns: If the area is typically congested, you might want to reconsider. Sitting in traffic can be a huge waste of time to you, your employees and customers and can impact deliveries or vendors you’ll be depending on.
- What’s around you? Assess the area surrounding your potential building. Are there other things that will help drive traffic? Are there competitors to what you do nearby? It’s important to look at the larger surrounding area so you know how it will impact you.
There’s a lot to consider when signing a lease. The items above give you a place to start to help you make the right decision. But, above all else, make sure you ask all your questions upfront and have an open conversation with your potential landlord. It will help you both get on the same page about what you’re looking for.
Running a business is a challenge. That’s why Wintrust is proud to offer a variety of tools and services to help support you.