Whether you are already in the retail industry and are looking to move to a different location or bigger shop or are about to set up in business for the first time there are certain things that need to be taken into account. There are a number of challenges facing retailers that probably don’t apply to other types of business. I mean let’s face it office space is office space, and it can generally function perfectly well wherever it is located. However, the success of any retail business can be determined by something as simple as being on the right street. To help you make an informed choice we have put together a list of a few things that should hopefully make your search easier.
Lease or Licence
Retail tenants are permitted to occupy commercial properties without signing a lease, instead they would sign a licence. Now while there are several advantages to this method you need to be aware that it does have some downsides.
One of the main advantages of a licence agreement is that it is provides retailers with a low commitment option that is perfect for say a pop-up shop. However, a licence does not offer you security of tenure that you get with a lease, and which protects the rights of the tenant. If there is a change of ownership, a licence can be revoked, which means that there is no guarantee that you will property will be able to stay on in the property after the original licence is terminated.
Finding the Perfect Location
As we touched on before location plays a greater part in the success of a retail enterprise than probably any other type of business. If you choose the correct location it can lead to a big increase in trade, conversely choosing the wrong location can lead to a downturn in profits. Generally when a property is on the market at what seems like a bargain rental price, If you see a property with a low rental cost more often than not it is a reflection of the fact that it suffers from issues such as low footfall, lack of parking and poor transport links.
So, while low rental may appear attractive it could actually turn out to be counterproductive. Another factor to consider is who is nearby, are there any direct competitors or other businesses in the area that may negatively or positively impact trade.
Negotiating Lease Terms
It is important to note that base rental prices for commercial properties are not set in stone. When it comes to commercial properties landlords are often willing to negotiate on the cost of the rent. Some landlords like to offer incentives like rent-free periods in order to fill a retail space. Try to take a tough stance when negotiating and remember that you can discuss any part of a lease particularly if you have taken good advice. You have the right to walk away if you cannot reach an agreement that meets your exact needs. Even after the initial details of the deal have been written down, you can still do this.
Maintenance
You need to ensure you understand upfront who has responsibility for the upkeep of the property? Is it all the responsibility of the landlord or do some issues require your attention. For example if you find yourself with blocked drains in London who is responsible for clearing the obstruction you or the landlord. Drains are just one area of maintenance you need to clarify there are many others so be as thorough as possible when going through the lease. The last thing you require is to be paying for repairs as a result of not reading the small print. It is also important to familiarise yourself with what sort of alterations you are allowed to make to the building.
Make Sure You are Fully Informed
It is significant that you arm yourself with as much information as possible not only about the property concerned, but the surrounding area as well. Especially if it is an area of the city you don’t know that well. Try and visit at different times of day to get a feel for the neighbourhood and the people. There is a lot more at stake when you are trying to establish a retail business than if you are looking for somewhere to live. So, remember being as well-informed as possible is the best way to make your business a success.
To Conclude
In conclusion, we have outlined some key things you need to consider when buying a business. It’s vital to have a thorough understanding of what you’re buying. Without this, it’s difficult to determine whether the business is the right fit for you. Make sure to do thorough research into its history and inspect the property before you settle on a business. Work with experienced legal representation and make sure to conduct a background check on any employees you hire. And finally, don’t forget to have a good grasp on the numbers: there will be times when you need to know how well the business is doing to ensure financial stability. Good luck!
