Consider your leasing needs

The first stage is to carefully consider your leasing requirements:

Satisfying your business objectives

Your main objective is to develop a profitable business. While objectives must be commercially sound, it is important that you do not limit yourself to achieving one or two, but seek to accommodate as many as possible.

Some common key objectives are that:

• the premises will allow your business to expand and grow;
• the lease can easily be assigned (transferred to another person);
• the premises have the capacity to provide your desired return on investment over the life of the lease; and
• the premises will allow your business to generate enough income to pay all expenses and meet your target net profit. 

Terms of the lease

There are many issues to consider when negotiating the terms of the lease in order to meet your business objectives and avoid any nasty surprises in the future.

The terms and conditions of the lease are critical to the success of your business so it's worth spending the time and effort to get it right from the beginning.

Generally, conditions of the lease should provide the following:

• security of tenure for the desired time;
• an affordable rent for the duration of the lease;
• non-interference with the day-to-day running of the business;
• non-imposition of additional financial burdens on the business;
• protection from competition from new tenants leasing in the shopping centre or group of shops owned by the same landlord; and
• the ability to conduct a profitable business.

For more information download:
BIZGuide: Commercial leases - main issues to consider

What's next...

• Step 2: Inspect and research premises
• Step 3: Obtain preliminary documentation
• Step 4: Obtain professional advice