The perfect rental space for your small business must be accommodating, convenient, and most importantly, affordable. Easier said than done, right? It’s easier to score an affordable small business space if you keep an open mind, go into negotiations prepared, and understand the rental market for your industry.
The competition is fierce when it comes to scoring a quality building for small businesses, that’s why it’s important to keep an open mind. Sometimes the best deals and opportunities are not what you expect at first. For instance, you might have your eyes set on a large space, when a smaller space could prove just as effective, albeit more affordable to renovate and rent.
We work with a lot of small businesses on interior office build-outs, granting us unique insight as to what makes a property pop with success. Here are some of our favorite tips for renting an affordable small business space that’ll help contribute to your success.
#1. Smaller Business Spaces are Becoming Increasingly Popular
Bigger is not always better. Property landlords used to focus on renting out massive offices and buildings, but the push for smaller office and retail space has caused a shift in the market. More tenants are offering smaller sub-divided portions of one property or building, thus giving small businesses a more affordable opportunity to jump in.
Just because a space is small doesn’t mean it’s not functional. In fact, some of the tinniest spaces can be turned into the most functional spaces, so long as you work with the right teams of people on your interior office build-out. Less square footage is often cheaper to rent and cheaper to outfit, a win-win for your bottom line.
#2. Look at the Whole Picture
Landlords typically adjust rental prices based on tenant improvement allowances, or subsidized renovations. You can negotiate freely during this process, so there’s no reason to settle for the first set of terms the landlord drafts up. Carefully look over the terms and crunch some numbers to ensure you’re getting a good deal.
#3. Get the Lease Duration You Want
Perhaps you want a 10-year lease, but the landlord is set on 5-years. Unless you know for an absolute fact that there’s no better building in town, look around for other options. It might be easiest to suck it up and agree to the landlord’s terms in the now, but what will you do 5-years down the road when your lease is up and your landlord decides to increase your rent considerably?
If you’re a start-up, experts recommend negotiating the shortest lease term possible, just in case things don’t go as planned or you need to rapidly expand. On the other hand, if your business is well-established, aim to secure the longest lease terms possible at today’s lower rates because inflation is real.
#4. Research Your Potential Landlord
Before signing any dotted lines, make sure you’re getting into a happy arrangement with a trustworthy landlord. A simple Google search of the landlord’s name could produce interesting results. You could also reach out to previous tenants or people in the industry to see if anyone has heard of or worked with the landlord. Just a little bit of research could help you dodge a serious bullet.
#5. Know the Going Rate for Your Market
How much are your competitors paying for their locations? What’s the going rate per square footage for commercial properties in the area? How much can you feasibly spend on rent and still turn a healthy profit each month? You should know the answers to all these questions and more before you even begin looking at potential commercial rental space. After all, it’s the only way to avoid getting ripped off or trapped in a bad deal.
Furthermore, the security deposit is an important aspect of the deal, providing the landlord with some protection. The last thing a building owner wants to do is invest in office renovations only for the business to back out of the lease 6-months later. Find out what the security deposit is up front so that you are prepared to cover the costs.
Interior Office Build Outs
After you find the perfect space for your commercial location, PCI is here to provide unmatched General Contracting services for your interior office build out. Contact us today to learn how we can help you save money while outfitting your business for success.