How to Find and Negotiate Retail Stores for Rent
Finding the perfect location for your business establishment is more challenging than it may seem. As an entrepreneur, you must consider many factors that may ultimately lead to your store’s success or eventual doom.
Indeed, the hunt for the right retail space can be downright frustrating. However, once you’ve found the best spot, your business has more chances to flourish and thrive for the years to come.
To help you make a smart decision, here’s everything you need to know when searching for a retail store and negotiating for its lease:
How to Find a Retail Store for Rent
You don’t have to spend hours driving around the town or city to look for the best location for your retail store. In fact, there are many hassle-free ways to find a place that will tick everything off your must-have list.
Use Different Online Resources
Unlike the olden days, information is easy to come by these days, thanks to the Internet. Take advantage of all the helpful resources you can find online to help you make the right decision. Scrolling through reliable websites, for instance, can help you compare your options.
It’s important, however, that you lay down important concepts for your brand, including value proposition, prospective clientele, and competition. Once you have identified all the important aspects of your business, it will be easier for you to figure out where your retail store should be.
Using websites that offer a complete list of the leasable properties around your target area can also be a game-changer. Crexi, for instance, provides a national database for retail, industrial, and office space for lease. Google Maps and Google Earth are also a helpful tool when looking for a small retail store.
Visit the Locations
Before doing site visits, you’ve probably spent hours doing some research over the Internet for all the available retail stores for rent. Once you’ve already made a partial list of all the possible locations, it’s now time to do some actual legwork.
While it’s easy to get swayed by what you see online, it’s always a smart move to visit the sites personally. Doing so will help you determine the perks and perils of setting up your retail store in a particular location.
Get in Touch with a Retail Broker
Deciding by yourself can sometimes be nerve-racking, especially when you’re dealing with a retail store for rent. Although you have spent so much time on the Internet looking for the right location, you may still miss some important aspects that only the pros can identify.
Thus, working with retail brokers may not be such a bad idea, considering how much they know about leasable properties. Plus, they may be able to provide useful insights that can steer you in the right direction.
Understand the Full Financial Commitment
Before making the big decision, it’s also necessary to know whether you are capable of committing to a long-term financial responsibility. Leasing a property requires the financial stability of the business.
Business owners should then determine their current financial standing and whether their company can thrive and sustain the payment for the lease. Surely, you wouldn’t want to commit to a long-term contract that you can’t really afford.
Learn the Different Real Estate Terms
To make the most of your investment, you need to be familiar with the various real estate terminologies that are used in the contract of lease. Doing so will help you better understand what is written in the fine print.
For instance, there is a stark difference between “rentable” and “usable” space. The latter refers to space you may occupy or use but additional charges may be involved.
Factors to Consider When Searching for a Leasable Retail Shop
Finding the perfect leasable shop can be overwhelming; most especially if this is your first time searching for one. With this list, you will be in a better position to choose your prospective leasable retail shop.
Convenience
While a retail store located near other shops, parking spaces, and other establishments seem like a good deal, you may be surprised to know that it may cost a little over the usual. Since many entrepreneurs will flock to lease such properties, owners may be compelled to increase the lease cost.
Therefore, if convenience matters to you, then you may need to dig dipper into your pockets. If you’re on a tight budget, choosing a convenient site may be a little burdensome to your purse.
High-Foot Traffic
Apart from convenient store locations, high-foot traffic is another important factor to consider when on the lookout for the best retail store for rent. Most business owners pick sites that are nearby crowded streets. The demand for these business sites is also the primary reason you may need to shell out more money for a lease.
Term of Lease
The longer you plan to stay in a specific shop location, the better you can negotiate about the lease price. Entering a lease contract for over a year, for instance, may be more advantageous compared to renting a property for less than 12 months.
Competition
If you aren’t the only one vying for a particular retail store for rent, it’s possible that whoever offers the most money for the lease will secure the spot. Outbidding your competition may be a problem, especially when you’re following a stringent financial management plan.
How to Negotiate a Favorable Small Retail Store Lease
Asking the right questions can make a huge difference when it comes to negotiating the price of a small retail shop for rent.
Generally, leasing agents or landlords will only tell you the terms and conditions that have been previously determined. As a prospective tenant, it’s your job to understand everything that is written in the fine print. You also have the power to change some parts of the contract through a counteroffer.
Here are tips for negotiating a favorable small retail store lease.
Ask For the Initial Terms in Writing
Leasing agents act only on behalf of landowners. There are some instances, however, when they may not clearly understand their landlord’s instructions, which can lead to problems. On the other hand, some agents may have fraudulent motives that can impair the contract.
Having a physical or digital copy of the initial terms is important to avoid any inconvenience that may arise due to miscommunication. It is also recommendable to seek a lawyer’s advice, regarding the terms and conditions.
Make a Counteroffer
A lessor would often list a property for a price that’s more beneficial to them. A counteroffer, however, allows you to ask for a more reasonable price through a letter or document stating your intent to lease a retail shop for rent at a lower cost.
In other words, counteroffer refers to bargaining. Presenting a counteroffer is a typical scenario when negotiating a lease. Nonetheless, while many properties are negotiable, some are not lenient when it comes to this bargaining agreement.
Prepare a Counteroffer Letter
When writing a counteroffer letter, make sure to use the following information: persons liable for the lease; business model; how long have you been in business; contact information; and the proposed terms. Be clear and concise as much as possible.
How to Run a Successful Retail Store
It’s not possible to foresee the future of your business. However, there are some foolproof ways to ensure its stability and success in the long run.
Limit Your Target Market
Opening a retail store certainly comes with many obstacles. One of the few things you need to get straight before the launch of your business is your specific target market.
While you may think that catering to a bigger market can help your business become more successful, experts suggest narrowing down the list of your prospective customers. Focusing on your niche will also help you create a more reliable brand.
Generate Ideas
One of the many mistakes that entrepreneurs commit when starting their retail business is the lack of creative ideas to market their products. They also often have an unclear idea of what they really want to offer, which can lead to a messy business model.
To avoid falling short of ideas, ask yourself the most important questions involving your target market, products, prices, and competitions. From there on, you’ll have a clearer picture of what your business is going to be like.
Cover Your Legal Basics
When planning to open a retail store, you must be prepared to deal with all the legal matters that it entails.
For instance, a business operation license is one of the many things you’ll need to get the ball rolling with. Without this license, business operations will not be allowed in any city, state, or county. Moreover, you’ll also need to process your employer identification number or EIN and a seller’s license to get started.
Create a Personalized Experience
Many retail stores find success in personalizing the customer experience and by reinventing themselves. Doing so helps boost the trust and confidence of customers in a business, which may translate to better transactions.
How to Calculate Retail Store Rent
More often than not, retail space is leased based on the amount of square footage. For this reason, rent calculation is done by square footage. To get the total annual rent, multiply the price per square foot with your total square footage. You will then divide the amount by 12 to get the monthly charges.
For instance, if you are leasing 3000 square foot at $4 per square foot, your monthly leasing costs would be $12000.
Conclusion
Business success requires a strategic mind. With a perfect store location for your retail business and great negotiating skills, you’ll be able to soar high and reach greater heights. If you are still uncertain about the whole process, do not hesitate to hire a retail broker to help you find and negotiate the best retail stores for rent.
