Take a Look at Your Lease
Many businesses are location-sensitive, whether it is restaurants, retail stores or other operations. In fact, most businesses in Southeast Asia depend on customers finding them or coming upon them in particular parts of the city or suburbs. If your business belongs to such category, the following lines are written especially for you.
Business owners may not give their leases too many thoughts, but for location-sensitive businesses lease is profoundly critical. A first thing to considering when negotiating a new lease is its length. Established companies can be looking to making it as long as possible, whereas starting businesses may consider shorter ones with options to step out if their entrepreneurial efforts fail. Additionally, it is a good idea to enquire about transferring the lease to a new business owner in case you decided to sell your business at some point down the road.
A different approach will be required by businesses located in shopping centres. If possible, it is very advantageous to arrange the lease in a way that protects your position in the mall, for example total exclusivity or being able to have your say in selecting the immediate business neighbours.
Moreover, it is desirable to think about various future scenarios in regard to the store, such as a closure of the anchor store, loss of consumers etc. The lease can also talk about what happens in case of fire, rent and percentage clause, real estate taxes, grounds-keeping costs and other maintenance issues and fees.
If you are a starting business, the lessor may determine you, the owner of the business, as a person who holds the ultimate responsibility for rent. For established companies opening nth branch or location, it should, instead, be your corporation as a tenant.
From the above points, it can be concluded that the actual rent amount may not be the most important part of the lease. Established businesses are advised to seek long leases – the longer the better. On the other hand, new businesses may want to incorporate an escape clause should their business go under. In either way, the right to sell the business and transfer the lease is a necessity.