Locating Your Business
Client Traffic
The location of your business can have a huge impact on where your customers
come from, and how many come. If you’re opening a walk-in retail business,
you want to be where people can easily reach you. Your space costs may be
high, but you need a location that will get people walking through buying
your merchandise.
If your business is a business-to-business professional service, you’ll
need to locate near your customers, but you probably don’t need to
worry about walk-in traffic. Because you will need to be near other businesses,
your space costs may be high, but not as high as prime retail space.
If you have a business with very limited contact with clients, such as
an online store or some other specialty business, you can save a lot of money
on space since you can locate anywhere that has the telephone or Internet
connections you need.
Manufacturing and industrial business have entirely different considerations,
including zoning laws, access to transportation and environmental impacts,
among others.
Leasing a Building
A business lease is a major decision for business owners. After you’ve
decided if the location is right for your business, make sure the lease agreement
is also good for your business.
Some specifics in the lease to look for are:
- Does it specify total square footage of the space for lease?
- How are utilities, maintenance and other expenses paid for? It is rare
that they all are included in the monthly payment. If
your business rents less than an entire building, make sure the expenses
are appropriately divided among all the tenants in the building. For example,
if you open a small book shop with limited hours and another tenant is a
large, 24-hour light-fixture shop, you should not pay equal parts of the
electric bill.
- Does the lease specify that the landlord must justify any rental increases
with a list of expenses, prepared by a CPA?
- If the building is deemed unusable for some reason, such as fire or other
event, does the lease define how the situation is remedied?
For example, can the tenant cancel the lease if the building is unusable
for an extended period of time, and is the rent abated for unusable time?
- What are the consequences if the landlord does not meet his or her repair
obligations? Can the tenant make repairs at the landlord’s expense?
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