The American dream of starting a business is alive and very real. Having worked with many start-ups, nothing gives me more joy than seeing a venture go from concept to physical location. However, there takes a lot of time and preparation in order to make this happen. Here are a few steps especially for start-ups to get you on track for leasing commercial space.
1. Have a Solid Business Plan
If you are looking for financing, most financial lenders and investors will ask for your business plan. This is a great tool as it highlights the business concept, background of the partners, projections, market feasibility, competition, and goals. Microsoft Word has free templates so you can even create your own without having to spend thousands of dollars. And the business plan looks nice and professional for submitting to Landlords as well.
2. Save Money
This may sound like a no-brainer, but I start-ups have come to me with minimal savings. Opening a location is a huge investment. Costs may include a security deposit (for securing a lease and space), pre-paid rents, work to build-out the store, advertising, merchandise, and more. So it is a good idea to have money saved before signing on the dotted line. And most Landlords will request some form of proof of funds such as bank statements and/or tax returns. A smart commercial real estate broker will also recommend you save money as well.
3. Work on Your Corporate Entity
Connect with a business attorney and accountant to determine what type entity will work best for your venture. Are you forming a LLC (limited liability company), Corporation (Inc. or PC.), or just your personal name and using a fictitious business name (doing business as)? Each have different legal and tax consequences and will also have an impact on your future lease and terms.
4. Hire a Tenant Broker
And of course, hire a real estate professional who specializes in leasing and commercial real estate in your market. He or she will be able to guide you through the leasing process, market comparables, market trends, negotiate terms, and find properties not yet on the market. The professional will also work closely with you and trusted advisors to help make your dream into a reality including attorneys, contractors, insurance agents, signage companies, and more.
Ready to begin? Here are a few items recommended to start gathering so you are well prepared for finding the right space -
Website or marketing materials
Credit Report within the last sixty (60) days
Two (2) recent months of bank statements
Two (2) years of personal tax returns