Ask - Jeff Winters
Ask Jeff
"Jeff Winters answers your Entrepreneurial Questions" For many of us our professional transition may include a decision whether or not to become an entrepreneur and create your own jobs. Jeff Winters (CEO www.OurExperienceCounts.com) partners with the Alameda County (CA) branch of the SBDC (Small Business Development Center), hosting a webinar focused on providing support for the decision and the early stages of a new company. OurExperienceCounts.com will continue developing new webinars that provide support specific to the planning required for different types of enterprises. Whether you are considering a consulting service, exploring purchase of a franchise or actually planning to setup a manufacturing operation, we want to help. To better provide this help on a more-timely basis, Jeff will be hosting a weekly blog that will focus on answering your specific questions and concerns.
Dear Jeff:
I am negotiating the lease for a building that will become the dance studio I want to open. I have never negotiated a commercial lease before and I’m a little confused. What should I know about that can help me better protect my interests and pocket book
Carol, Phoenix
Answer:
Dear Carol:
Carol, that is a great question! Commercial leases are unique and can create some unexpected surprises if you don’t know what questions to ask. Before we start on the lease, however, it’s important that you are certain that the location is good and the size is appropriate. A great lease on a facility that doesn’t work is not a good deal.
Many landlords will require you to personally sign for the lease, especially if your company does not have a long credit history. There is probably no way to get around this, but if the space has been available for quite some time and you don’t require the landlord to make any improvements, you might be able to negotiate this issue. If you do need improvements, you may be able to get the landlord to pay for them and amortize them into the term of the lease. Other issues include, who is responsible for utilities, maintenance and taxes. What are the insurance requirements and will there be adequate parking for your customers. The length of commercial leases vary, but many landlords will ask for 5 years and you might ask for an option for an additional 5 years at an agreed upon increase.
Hope this helps.
Best, Jeff
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