Monday, 2 April 2012

The finer points of commercial leasing

I can make a pretty coffee, but can I start-up my own business? Hurdle 1 in this process is finding the perfect premises. This is quite possibly the single most important step in the whole cafe process and as a result many would be cafe/restaurant owners bring out the 'too hard basket' and never make it past this stage.

I have seen first hand how the property you choose can make or break your business. Therefore I put some serious time and effort into seeking out my little place, looking on and off for nearly 18 months before committing myself. Luckily for you I have a fair amount of experience in commercial leasing. My family have collectively started 8 various hospitality businesses from scratch. So to save you a lot of blood, sweat and tears I have compiled the following list of points to remember when looking for a business premises:

  • Does the area have the right demographics for your target market?
  • Is there a good amount of foot traffic for passing trade?
  • Are you after an established business or a blank space?
  • What is the current DA (development approval) for? Don't just take their word for it, you have to see the paperwork!
  • If there is not a current DA, is there landlord approval to run the space as a cafe?
  • What is the term of the lease? For example how long will you be tied into the lease for.
  • Check to see if there are any development plans for the property - you don't want to set the place up just for your landlord to turn round 6 months later and re-develop the area upstairs into a 24 hour brothel, (saying that this may attract some new colourful customers).
  • Does the property have a grease trap or mechanical ventilation? If not, can this be installed and at who's expense? Some landlords may pay for this or at least contribute towards the cost.
  • Does the asking rent include outgoings?
  • What toilet facilities are available? There are certain council regulations relating to this depending on the capacity of your property.
  • What incentives are on offer? Remember there is always a deal to be had. This could mean a rent free period or the landlord helping with the fit-out, it doesn't hurt to ask anyway.
  • Is there disabled access? If your site isn't at street level, council will require installation of a ramp.
  • What available parking is there in the area?
  • Are other businesses succeeding or failing in the area?

There may be other issues that come up along the way but the above is a pretty comprehensive list of questions to bring along to any estate agent meeting. A final tip is to ensure you get a good solicitor to look over the details of the lease to ensure there are no hidden gems that the landlord neglected to tell you. The balls in your court until you sign on the dotted line.

I realise this can all seem a bit daunting. However, if you approach it in a logical way and just get stuck in, it really isn't so bad, the lawyers will do most of the ground work for you anyway. If you are feeling overwhelmed or have any questions, thoughts on finding a property don't be shy. I am passionate about small business and will help if I can.

Some of the points made today warrant a whole post to themselves. Tomorrow we will talk about the pros and cons of buying into an established business as compared to starting one yourself from the ground up. Wohoo bet you cant wait, this is edge of your seat stuff!

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