Check out our list of 7 important parameters one must consider before leasing a commercial space.
1. Appropriate Location
The absolute first step when you plan to lease a new place for business is to zero down on possible locations. And to achieve that, you will need to connect with all the stakeholders and understand their requirements, compile the same and then proceed.
When looking for a retail space, proximity to areas with good concentration of target customers could be a good marker. Sometimes, it could be a very simple decision to look around and rent out a place in a shopping mall where other brands appealing to your target consumers are located. However, the availability of right spaces and budgetary constraints could complicate the decision.
Similarly, when searching for an office space, convenience of employees and their commute could be the most important considerations. It will be prudent to understand the profile of people you employ or plan to employ and look for a location accordingly. At times, the choice of location will have to conform to the brand perception. For example, it could be just fine for a start up to be located anywhere, but a top-notch consulting firm has to set up an office in a corporate building in the business district only.
Whatever be your preference, it is always recommended to ensure that the place is a safe and welcoming environment. This is important for the security and wellbeing of employees and customers, and warms them up even before they interact with the brand directly.
2. Buy or Lease Decision
While it may look so, deciding to buy or lease is not a straight-forward decision. One needs to understand the true cost of owning vis-a-vis leasing including all the related costs before this decision can be taken. It will also be based on your business projections and the cash-flows available in the business.
Generally a business that is stable and is following a consistent pattern, is more certain about its future needs and can therefore find it cheaper and worthwhile to invest in owning its premises. However, for a young organization or the one in an emerging industry, it may be expedient to lease.
This is one area where ImpactR adds significant value to its customers. With an understanding of various costs involved in both the options, our data driven platform makes the decision perspicuous and effortless.
3. Size and Space Layout
Before you set out to get a commercial property to lease, it is important to understand the required layout and total size of the plate required. There are some simple rules available to help you determine the space requirement for each desk or cabin making it easy to consolidate the requirements. There may be some other specific requirements to be taken care of, for example, to meet particular business requirements, teams from two related functions need to be certainly sitting together. It is advisable to keep such information readily available to help make the right decision.
There are circumstances where certain types of equipment and furniture that are essential for a business may require a very precise arrangement in your commercial space to perform effectively. The importance of different spaces may also depend on the nature of a business. For example, an office may need a large conference room and a small reception area, while a doctor’s clinic will require a large reception area and probably no conference room.
4. Amenities Required
As offices are getting back to normal post-covid, focus on amenities has increased multifold. Large enterprises are looking at separate space for quarantine or precautionary health facilities to handle any emergency situation quickly. Easy access and provision of more wash rooms and hand-wash facilities are expected by customers and employees in a commercial space much more than earlier.
The other infrastructure and facilities of the building or property are also important factors to consider. You can also check for amenities in your immediate surroundings, such as good restaurants, parks, supermarkets, post offices, banks, ATMs, and so on, in addition to the amenities offered within the building. A space with large openable windows, plenty of natural light, and good ventilation, are seen by users positively as compared to completely closed spaces.
5. Expansion opportunities
It’s important to consider the probability of future events while choosing a suitable commercial space for your brand, whether a retail store, an entertainment space or an office. Sometimes, it may not be possible to foresee future opportunities and therefore, you may prefer the premises which offer future expansion. This could be very important for a fast growing retail brand as moving to a new place might confuse customers.
When you are evaluating options for space to use for your business, it's worthwhile to consider the growth potential at that property. How will the property serve your employees and customers today and into the future? Also, how flexible are the policies followed by the managers of premises and how does it align with your future plans?
You don’t want to get locked-in to a long lease with someone who will not offer opportunities for any expansion. Also, you would not like to vacate a place where your brand store has created a niche for itself. These decisions, though look innocuous, could have far reaching implications.
6. Start-up expenses
There are specific needs of every brand that is looking out for leasing commercial properties. While an office is expected to have a defined layout, a restaurant will need a very different set of facilities. Similarly a lot other businesses need spaces that should comply with specific guidelines from local authorities.
There are certain areas in most modern premises which are constructed keeping these requirements in mind and therefore require a minimal cost and time to start operations. However, these start-up costs could be extremely high in many businesses and a building where similar business was run earlier, could help reduce this cost significantly.
7. Diligent Handling of the Paperwork
Once you’ve chosen your site, it’s time to sign all of the important documents. But before you sign your commercial lease deed, there are a few important things that need attention. Understand the lease term, total costs, and if there are any renewal options at the end of the lease. You should try to avoid sinking a lot of costs into a commercial property that you won't stay in for long.
You should be especially watchful about clauses relating to building maintenance, liabilities, and insurance. The experience of the last couple of years have also shown that the scope of future subleasing and cancelling the agreement before the specified time period, have to be handled sagaciously. The account manager assigned to you by ImpactR helps you negotiate and close contract terms that are most suitable to you.
When you are looking to lease a commercial space, consider the nature of your business and the perception of your brand, then shortlist the locations that meet your objective. Finalize from the available properties and inspect all the amenities, and carefully read the lease terms. Be patient and detailed, and make your final decision after taking assistance from commercial leasing experts. Once you take care of the factors mentioned above, you will be able to make a pragmatic choice in commercial leasing.