Top things to consider when renting your first business space
In this 10-minute read:
- What space do you need?
- What do you want?
- Budget, size, and other necessities
A large part of starting a new business, or expanding your current business, is finding the perfect location. As you are looking for a new business space, several factors come into play and will affect what may or may not work for your company.
Take some time to do your research and learn more about what you need for your business and what kind of commercial rental will work best. This article will go over several things that you should consider when renting your first business space.
Do you really need a rental space?
First, determine if a rental space is even a necessity. You may think that you need to have a separate space for your business, but if you only meet customers off-site and don’t have any additional employees, do you actually need to pay for a commercial lease?
Ask yourself these questions to help determine if a rental space is necessary for your business:
- Is running your business from a home office an option?
- Do customers need to visit you at your place of business?
- Do you have employees who need an office to work from or can they work remotely?
- How much of your business is handled off-site versus on-location?
If you’ve determined that you do need a rental space, then continue down this list to learn what you should be thinking about as you engage in this endeavor.
What features and space does your business need? What do you want?
Make a list of the things that you need for your business and a list of things that you want. The necessities might include things like:
- Parking for employees
- Good security
- Size specifications
- Easy access for customers
- Break room
These are the features that you are not willing to compromise on, so you should make sure each space you look at has these if you are considering them.
Things that you want for your rental space might include:
- Open floor plan
- Ground-level entrance
- Lots of windows
- Individual offices for employees
- Other unique features
These are the things that you may need to compromise on when looking for the perfect space to rent. Make a list of both and keep these in mind as you begin your search.
Location is critical. A good business location can help you acquire new customers and make it easier for your current customers to find you.
Let’s say for example you have a retail business. You’d want that to be in a central location that gets a lot of foot traffic and will catch drivers’ attention as they are passing by. This will help you get more walk-in traffic and will help with marketing.
But if you choose a location that is out of the way where people rarely visit, you may have a hard time drumming up new business without a really solid marketing plan and a truly unique set of products and services that will motivate people to go out of their way.
Think about your ideal customers, where they spend their time, and what their needs might be for finding your business. Use that information as you look for the right location.
Your business space should be accessible in every sense of the word. If you have customers that come to your space, it needs to be easily accessible from the street, including a place to park and an entrance that is easy to locate.
On the other side of that, if you have a lot of walk-in traffic or employees with disabilities, your space should be accessible in that sense too. Is it easy for wheelchairs to access? Can people who are less mobile access your location?
Check your local ordinances to ensure you are compliant with any accessibility requirements, and if not, be sure to work with your landlord to bring things up to code before you sign your lease.
Space is a definite necessity. You should already be thinking about the size of the space that you need for your business. How many employees do you have? What is the customer capacity that you want? Do you have large equipment or inventory that needs to be stored on-site?
Along with these things, you also need to think about the growth of your business. How quickly do you plan to grow? Are you going to be in this space for a while and will you need to bring in more employees? The answers to these questions will largely impact the size of the space that you should consider.
Consider the amenities that the building itself has and that the general location offers. What features of the rental space are going to benefit your business, your customers, and your employee?
What amenities are located near your business? Is there a mall, a movie theater, a park, medical offices, playgrounds, or other customer-friendly venues?
Think about your target customers and how they spend their day and whether or not these nearby amenities make your location more appealing and convenient to access.
Obviously, you need to determine what your budget is for a rental space. You can’t rent a space that isn’t going to make sense for your business financially.
Go over the numbers carefully before you begin your search and then strictly stick to your budget allowance for a rental space. Don’t rent anything that is outside of your budget, no matter how appealing it may seem.
But, that doesn’t mean not to look outside of your budget (within reason). Landlords may be willing to negotiate on prices, especially if they have a lot of vacancies in their building. So don’t be afraid to reach out and see if you can negotiation a lease that fits your business plan and finances.
Think about any additional expenses that may arise related to your office space. These should be included in your total rental budget as well.
Common regular expenses include:
- Internet and phones
- Parking permits
- Security deposit
- Security features (cameras, new locks, etc.)
- Furniture to fill the space
NOTE: many landlords will also charge you for common area maintenance (CAM), your portion of the insurance on your space, and possibly a percentage of your profits, depending on location and your revenue. Be sure to get it all in black and white and discuss it with your broker or realtor.
Think about the duration of your lease
You don’t want to get locked into something for a longer period of time than you plan on being there.
Think about your five-year plan and how to plan to grow and expand your business. How long can you realistically remain in this first rental space?
Consider how long you want to be in the space and find a lease agreement based upon that. Find a landlord that will work with you on this arrangement. Don’t settle yourself into something long-term if you don’t have a pretty good idea what the future looks like.
Consider your market
It is important to educate yourself about your market. If you’re looking for a rental space for your business, you’ve likely done your market research and are familiar with what the market looks like for your industry in your particular location.
Your market can widely influence what will make a location good for your business. Consider your target customer, where competitors are located, use what you know about your market to find a suitable location for your business space.
Investigate your landlord
Don’t get yourself into an agreement with a company or individual that you know nothing about. Do your research on them to make sure that this is going to be a worthwhile arrangement for your business and that there aren’t going to be any surprises along the way.
Some things to ask about your landlord:
- What do current renters think of them? (Ask for references)
- What’s their BBB rating?
- What is their credit like?
Set up a time to meet with your landlord and ask them your questions to get to know them better and determine if they are someone you could easily work with.
If you plan on being in your rental space long-term, this will be a beneficial relationship to maintain.
Understand your commercial lease
Before ever signing any kind of lease agreement, you need to fully understand what it says. You need to know what your responsibilities as the renter will be and what the landlord will be responsible for.
Pay attention to the lease terms and make sure you know what is required of you. The last thing you need is to get evicted from the building because you neglected something of import in the agreement.
Here are some questions you should ask and understand within your lease agreement:
- How long is the lease?
- How much is rent? Will there be any changes in rent for the duration of the lease?
- How much will rent increase when the lease is up?
- Can you sublease?
- Is there a penalty for vacating the space?
- Can I pay up front and get a discount?
- Is renewing your lease an option?
- Who is responsible for what? (i.e. repairs, insurance, utilities, etc.)
- What building services do you get? (janitorial, utilities, wifi, HVAC, etc.)
- What changes are you allowed to make to the space?
All of these items should be made explicitly clear within the lease agreement so you know exactly what your responsibilities are as a lessee.
Security of your commercial space
What is the building’s security like? Are there security cameras on site? Have the locks to your doors been changed since the last tenant? How often do police patrol the area? Is there any after-hours security? Is there an alarm system?
Find out what kind of security is available so you can cover your bases by ensuring the best security for your assets and employees.
Layout of the office
As you are looking at commercial spaces to rent, consider how you will fill the space. How will you lay out your office?
Some questions to ask as you consider the layout:
- Where will your employees work?
- Will you have your own office?
- Where will customers be allowed?
- Will any space be off-limits to customers?
- Where can employees take their breaks?
- Will you need a conference or meeting room for customers or business partners? Where will that be?
The condition of the building
You should have an agreement about the condition of the building when you move in. If there is a current tenant in that space prior to your arrival, how will the space be left for you? Will it need any renovations or repairs? Will you be responsible for that?
If you want a move-in ready space, be sure that it is detailed within your lease agreement.
Do not neglect the need for parking. Whether you will only have employees working from your rental space or you want customers to come into your space on a regular basis, you need to know what the parking situation will be like.
Is parking included as part of the arrangement for the rental? Does your space have its own parking lot? Do you get an allocated number of parking spots or an entire lot? Is there public parking? Will there be enough space for your employees and customers? Are you responsible for maintenance costs, snow plowing if applicable, etc?
Know what your needs will be for parking and be sure that the rental you get can fill those needs.
Outside perception and appearance of your rental space
This is your place of business, and if you plan on inviting customers in for meetings or are providing a service or product in this space, it needs to be presentable. How will your customers perceive this rental space?
Is the building well-kept and comfortable? Are there potentially strong/weird smells from nearby restaurants?
Your space will send a message about your business to all who come into contact with it. Whether they are just looking at it from the outside or have the opportunity to visit with you inside, people will form opinions about your business based on your location.
The right rental space can enhance your small business marketing
Think about how your rental space will enhance your marketing capabilities. Is it in a location where it gets a lot of walk-in traffic and can market for you in that way?
What features of your location can you use to help market it to customers? Are there nearby amenities that compliment your services or products? How close are you to other regular shopping venues?
Marketing is a huge part of growing your business so be sure to consider this as you are looking for your rental.
Another aspect of marketing your business location will be adding your business information (address included) to online directories and social media. How easy will it be to add that information and help customers find directions to your business online?
No matter where you decide to locate (or relocate) your business, Womply’s reputation management software can help you get on top of your online business profiles by ensuring their completeness and accuracy. Learn more by filling out the form below for a free demo.
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