Renting a Business Location Checklist

Choosing and leasing a location for your business can be a critical decision. If your business is dependent on walk-in traffic—such as with a retail business—the importance of location is obvious. Service businesses are usually less location-dependent, but location can play a critical role in creating the right business environment and in determining your ability to attract and retain the employees you want. Be sure to consider all the factors when leasing space, not just the level of monthly rent.

Location Issues

Here are some factors to consider in choosing a location.

Location Issues

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Is there adequate space for current and future levels of business?

 

Is the space appropriate for your business? Does it have enough private offices, work areas and storage space?

 

Is there adequate parking available for customers and employees?

 

Is traffic congestion a problem?

 

Does the location suit the commuting needs of employees?

 

What types of communication services are available? If your business uses the Internet, are high speed services (T-1 lines, DSL or cable modem) available? Ask other tenants what they are using.

 

Is the space conducive to your type of business?

 

Are there local restaurants or other facilities that can be used for meetings or luncheons?

 

Lease Issues

The checklist below addresses some of the most common issues that arise when a lease is being negotiated. Understanding all of the lease terms can make the negotiation process easier for both you and the landlord. Depending on your level of comfort, you may want to have a qualified attorney help you work through the leasing process.

Lease Provision

Issues

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Nature and duration of the lease

Be sure to understand the terms of the lease and the mechanics of any renewal options. Also be sure to completely understand when you are entitled to possession and use of the property.  

Rent

In the lease contract, make sure it is clear when the rent is due and how it is to be paid, along with the actual amount to be paid. You should also be sure to understand if there is any "pass-through" of increased property taxes or maintenance costs.  

Competition

If the space is being used for retail purposes, such as in a mall or strip shopping center, are there any restrictions on the landlord's ability to lease to your competitors? What are your strategies in the event that a competitor moves in nearby?  

Subletting

Do you have the right to sublet space if you find that you don't need it within the duration of the lease?  

Physical condition

You may want the landlord to make certain improvements before you move in. This may include changing walls or electrical connections. What will be the general condition of the space when you move in, and what condition must you leave it in when you move out?  

Improvements

You may wish to make improvements to your space during your lease. You may need additional offices or just want new carpet. Be sure your lease allows you to make the improvements, and try to get compensated for these improvements at the termination of your lease.  

Landlord’s financial condition

Will the landlord be able to deliver on all obligations for maintenance and upkeep? The real estate market is usually cyclical, and some protections in the lease for your rights may be attractive.  

This checklist is not all-inclusive. You may want to use checklists found in reference books or on online to make sure all of your issues are covered. Your lease is important, but so is your relationship with the landlord. A good working relationship will make that call about the leaking roof or broken air conditioning a little easier to make.