So how exactly do you find the perfect space for your small business?
My first piece of advice is to hire a real estate broker or a tenant rep to help you negotiate the lease. The reason is most of the time it does not cost you as the tenant anything the landlord is going to pay that commission. Now there are certain times that the landlord won’t pay the commission in which case it would fall on your responsibility however, it is money well spent. These commercial real estate brokers know the leasing industry inside and out. They know the lingo that you are not familiar with. They understand negotiation and it will be time and money well spent on your behalf.
Second is to really have a good understanding of your business plan. The landlord is gonna ask you all kinds of questions related to your revenues, your expenses. So you need to have a really good understanding of how much space do you need, what’s your monthly budget for rent things, or you may or may not have thought about at this point in time. So it’s at this time that it is crucial that you really get a solid understanding of that business plan and you know the facts about your business so that when you are asked these very important questions you have a good solid answer and you sound like a business professional that a landlord would want to rent to.
Third, in finding commercial space for your business is to make sure you have some money in the bank. Now that may seem like an obvious thing that you need but so many people I talk to on a daily basis that wants to start a business have no business starting a business because they don’t have the money. There’s a very high percentage of new businesses that don’t make it the first year and it’s largely due to the fact that they run out of money. So how much money do you need to start a business? I would ask you to refer back to point number two that we just talked about and refer back to your business plan. The business plan will guide you and tell you exactly how much expenses you should expect for your first year and honestly, guys, I would not even consider making a diamond revenue for your first year and make sure you have 12 months of expenses in the bank so that you can float your business until you do generate the revenue and that means money for marketing, money for rent money, for insurance, all of those.
Types of things in the bank whether that’s personal investment savings or whether that is a business loan, figure it out now before you waste too much time and more money.
So just to recap, the three most important things you can do when you’re getting ready to shop for commercial real estate for your business is number one talk to a real estate broker. Number two make sure you complete and fine-tune that business plan and know the backward and forwards, and number three make sure you got some money in the bank.
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