Retail leasing can be a smart choice, especially when you're just starting out in business. However, finding the perfect store can be daunting as there are many factors to consider. Here are three factors to keep in mind when looking for a retail space in the Long Island area.
1. Location
Selecting the right location for your retail space is crucial to the success of your business. If your customers are based in a defined geographical area, choose a location where they can easily find you. Selecting a location outside of this area means you'll have to spend more on marketing. If your business depends on passing traffic, find a location that's visible and easily accessible by public transport. You may also wish to consider choosing a location near to similar retailers. This can be especially invaluable if you don't have an established customer base.
2. Budget
Knowing your budget will help you to narrow down your options and avoid choosing a retail space that's out of your price range. When reviewing your budget, look closely at your anticipated income and expenditure. Predicting sales can be difficult, but customer demographics can help. Once you've established your budget, you'll need to consider the financial commitments beyond your periodical retail leasing payments. These may include fitting-out costs, property taxes and insurance. Factors that can affect these costs include the type, size, condition and location of the retail space.
3. Contract
Understanding the terms of a lease contract is key to avoiding costly disputes. There are three types of leases: percentage leases, where you pay a base rent plus a percentage of your sales; net leases, where you pay a base rent plus expenses such as property taxes, utilities and maintenance; and gross leases, where you pay a base rent inclusive of some or all of your expenses. Make sure you read the lease agreement carefully so that you know which type of lease you're taking out.
Other Retail Leasing Considerations
Leases typically have terms of between one and five years. If your business is new, consider a short-term lease with the option to renew. You may also wish to look for a subletting clause that allows you to lease the store to another retailer if your business fails or relocates, and an exclusivity clause that prevents your lessor from leasing any other spaces on their premises to your competitors. If your business needs it, make sure your lease allows for property modifications and signage installations.
Choosing a retail leasing space can be a difficult task. By taking into account all the relevant factors, you can find a property that meets the needs of your business.
