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Avoiding the potential pitfalls of a commercial lease

Like many entrepreneurs, you may look at a new year as a chance to raise your standards. This may mean finally taking a dream or an idea and making it into a business. Along with plans for your product or service, you may be enlisting the help of friends or family members, or you may be considering seeking employees through ads or temp agencies.

Whatever the progress you have made in your business plan, you are likely wondering how to go about leasing property for your business. Leasing commercial property is a business transaction all its own, and there are many ways in which you can jeopardize you own success by making crucial mistakes at this early step.

Make the most of your commercial property

The first thing to consider is whether you truly need commercial space at this time. Rent and payroll are typically the elements that account for most of your business spending, and the longer you can postpone paying rent, the more time you will have to stabilize your business's finances. In fact, some business advisors recommend that you don't take out a lease on commercial property until you can pay one full year in advance. This will allow your business time to begin turning a profit.

Other factors recommended by business advocates include the following:

  • Lease only as much space as you really need.
  • Make sure your rent fits your budget.
  • Focus on the service you will offer instead of the glitz of the building.
  • Obtain a shorter lease.

You want your business to succeed. Taking a shorter lease will allow you some freedom if things go well and you are able to afford a larger commercial space. If you are trapped in a long lease, you may not have the opportunity to expand when your business is ready.

Advisors also recommend seeking the advice of an attorney for your commercial lease transaction. Having legal advice will allow you to negotiate the terms of your lease. Commercial leases are typically slanted to favor the landlords, so you want to ensure yours is not taking advantage of you. An attorney will understand California real estate laws and those details that are often included in the fine print. You may be comforted knowing someone will protect your interests throughout the transaction so you can concentrate on your business.

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