You've outgrown your Cincinnati facility and need a new place to conduct your business. There's a lot to consider beyond size and location, though. Think about your lease.
Commercial leases aren't one size fits all. They just can't be downloaded from the internet. And while the building landlord might have the terms written on paper, are they really right for your business?
That's where negotiation enters the picture.
You and your team need to do some research before sitting down to negotiate. Is the space you want to lease surrounded by empty warehouses? Or is the shop you have your eyes on in a high-traffic center? Knowing the answer will let you know how much leverage you have to get concessions from the landlord.
In addition, you'll need to consider the following when negotiating a commercial lease.
- Rent cost. A landlord typically charges by square foot and could include maintenance, utilities, insurance and such for an additional fee. Make sure you know exactly what is included beyond the rent so that you can budget appropriately.
- Rent increase. A clause spelling out the rent you'll pay during the second year of the lease typically is included, often in terms of a percentage. It won't hurt to ask the landlord to cap the increase percentage or to seek a longer grace period before the rent goes up.
- Length of lease. The longer the lease you agree to, the more likely the landlord is to make discounts or give concessions. That's because the landlord won't have to go to the expense of leasing the property again next year and it guarantees a steady income. A long-term lease isn't right for every business, though.
- Will the property owner pay for improvements that you need made?
- Can you sublet your lease?
The lease you sign will have a huge impact on the way you conduct your business, and it also will affect your bottom line. Before you sign on the dotted line, it would benefit you to speak with a Cincinnati small-business attorney to have the contract reviewed.