Every business owner is looking for a space to call their own. Whether it’s retail, office space, or warehouse storage, commercial real estate is one of the most important aspects of running a successful business. But before you head to Associates Home Loan, get a loan, or commit to long-term leasing arrangements, there are five questions that every business owner should ask themselves first:
1) What type of lease do I want?
Do you want a fixed-term lease or month to month? Do you need the option of subletting space, should your business outgrow its location? What are your financial requirements for this property, and how will it impact my budget over time? These are all questions that every commercial leasing agent can help answer. You’ll want to make sure you know the answers to these questions before you start your search.
2) How much square footage will my company need?
This is a question that every business owner should know the answer to before starting their search for commercial real estate anywhere. Why? Because leases vary in terms of square footage, and each additional foot will cost you more money when it comes time to renew your lease or move out. Sometimes, businesses that outgrow their space will need to buy or build a new building on unoccupied land.
How many people work for my business? How many customers and clients do I see per day? Do we have any storage or inventory that needs to be kept? What are the dimensions of our product(s)? This will help you get a better idea of exactly how much commercial real estate your business requires.
Your best bet is to work with an agent who can give you all of these answers and provide accurate estimates on what kind of lease rates and costs they can expect for your specific business needs.
3) Is this area zoned for industrial use?
If you’re looking for retail or office space, then this question doesn’t apply to your search. However, if are considering leasing any kind of warehouse storage property, it definitely does!
There are certain areas that have been zoned only for industrial use. If the area isn’t zoned correctly, you may be forced to move shortly—or pay a hefty fine per day.
To avoid this situation altogether, only consider properties that are zoned correctly for your business needs. This will help you find commercial real estate that is both affordable and long-term viable for your company’s growth plans.
4) Will this location help me achieve my goals as an entrepreneur?
Don’t just choose a commercial property that is close to your home or office. You need to be strategic with the location of each piece of real estate you lease—especially if it’s going to have an impact on your company’s bottom line. Many business owners forget about this crucial step, and as a result, they end up wasting money on leases that aren’t the correct fit for their businesses.
If you’re unsure of how to determine what kind of location will help your business, there are a few simple tests that can be done in order to find out:
Is this property located in an area with lots of foot traffic? Is it close enough to my competitors that I can gain their customers as well? Is this an area where my employees will want to live and work (i.e., near public transportation)?
5) What other costs will I incur by securing this property (i.e., utilities)?
There are so many hidden costs associated with commercial real estate leases. To avoid mistakes, it’s important to know what all of your monthly expenses will be—including utilities! If you don’t ask this question up front, then the leasing agent may not tell you about additional costs until after you sign on the dotted line and get hit with a ridiculously high utility bill months down the line.
As your business continues to grow, you may need more or less square footage than what was initially estimated. That’s why it’s important that commercial real estate leases are flexible enough for small businesses—and have a long-term view in mind so that they can accommodate any changes made along the way.
Don’t forget to ask these questions before you lease any commercial real estate. Asking the right questions upfront will save your company time, money—and headaches down the line!
