Wednesday, December 30, 2015

Space lease or rent

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     Every small business needs space. No matter what you do, you will need a place to do it.  

     Artists rent studios, therapists lease space, chiropractors need a place to see and treat clients, and so it goes. Retailers need stores, accountants and attorneys need offices. Even if you have a home office, you are renting from yourself.

     Leasing or renting space usually involves a document to be signed. It will spell out the terms and conditions--you need to pay attention.

     Example: Ellen ran into trouble when her lease came up for renewal. She opened and operated a small ice cream shop under a 3-year lease. The shop was very successful. She used Facebook to promote and she hosted events at her place--birthday parties, open houses, fund raisers, and the like. In her third year, she approached the landlord about renewing the lease. He wanted another 3-year lease at a much higher rate. Ellen wanted a 5-year lease at the same rate. Negotiations went nowhere, so Ellen looked around town for another location. She had considered adding to the ice cream she offered--she had toyed with expanding into coffees, including espresso, a smoothie bar, and fancy chocolates. She found a much bigger space at the same rate she had been paying and for a 5-year lease. It also had a patio that could be used. So, Ellen told the present landlord goodbye, moved, expanded, and never looked back. 

     Example: Roberto was a consulting therapist who needed space where he could meet clients. Two rooms would suffice--a private office and a reception room. He found an appropriate space in a building full of other professionals. Roberto knew that the landlord had trouble renting such a small space, so he negotiated a 5-year lease at a relatively low rent. As part of the negotiating, Robert insisted that the landlord include heat and electric. The landlord agreed--such a small space would not use much heat or electric. But it meant a lot to Roberto.

     Some leases have lots of small print that can include all sorts of add-ons. In addition to heat and electric, the lease might ask you to pay for snow removal, garbage pick-up, signage, parking spaces, even taking care of plants and yards.

     Before signing a lease, read it carefully. You might want to pass it by a trusted friend or business person or even an attorney.

     Leases and rental agreements are legal documents. Once signed by you and the landlord, the terms and conditions apply. 

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