Hi Everyone

I have been running a business for about 5 years now and with the help of many different business people and advice the business is starting to run quite well with very little daily input from me. Leaving me more time to work ON the business and not IN it.

The problem I’m having is that our lease on our current property is about to expire and because property prices in our area have gone though the roof they want to increase the rent by a large amount. (They now want to charge $48,000 a year and we use to pay $29,000 so a increase of $19,000)

As you can see this is a very big increase and would end up coming straight out of my income which is made from working on the business. As the business has only just started to see some positive returns in the past year it would take a large amount of income which I receive from working on the business.

I would like to know if anybody has any good advice on either:

A)Negotiating with our current real estate agent to get a better deal then what we are currently paying. (I believe that it many be over priced for our old price as the tenant mix has changed over time) (I don’t think for the better)

Or

B)Looking for a new space (Any tips or tricks)


So if people could recommend and information or have an advice on the matter that would be great.

Thanks

P.S I would also be interested in reading any book with a author who is an expert on the matter.

How much time do you have before the lease expires? I would definately look around at other space. Moving the location of a retail business can be tricky. If you do move be sure to do lots of advertising so your existing customers can find you. You don't want them to think you've gone out of business.

First, check your lease. Many have a maximum percentage they can go up from one lease period to the next.

And if your's doesn't and you do decide to move, make sure you negotiate such a feature into your next lease.

I'm interested in opening a business in the next year and I wanted to know some info about leasing. I had seen many building for lease and they usually require a 5 to 10 year contract. I know leasing is similar to renting but do you have to pay from month to month or you are required to pay the whole amount for the whole year up front?? What happpens if your business fails and you have to break the leasing contract??

Like an apartment lease, or car lease, you will probably need to pay a deposit or maybe 2 months rent up front. Then it is just month to month.

If you should go out of business, you are still responsible for the remainder of the lease. Make sure you have the right to sub-lease, in case your business fails. If you can sub-lease, then you can find someone with any approved type business to take over your remaining lease period. Generally, you are still responsible, should they default. The leassor has the right to screen the sub-leasee, but cannot withhold approval of a legitimate business that would normally be appropriate for the space.

Sometimes, being incorporated will save you if you go out of business, but most leases for first-time business owners will require a personal guarantee, as well as a corporate signature. Only desperation on the part of the lessor, or stellar negotiating skills on the part of the leasee will avoid a personal guarantee.

Pete answered your questions pretty much. As far as the length of the lease, yes most landlords want a long term lease but that doesn't mean you can't negotiate a shorter term. Just remember that there is no such thing as a "standard lease agreement". Everything is negotiable. Read every word in the lease and if you have any questions see an attorney.

[quote=Aaron Hats]How much time do you have before the lease expires? QUOTE]


We have 3 months!

Try to negotiate with the owner a long term lease and possibly the owner of the building will agree with better rental conditions. If that does not work then I would assume that finding a new location is a better option.