Choosing the right commercial space is critical to the success of your business. But before leasing commercial space, you need to ensure you can afford it. To point you in the right direction, we’ve created a guide on how to budget when leasing a commercial space.
1. Analyze your Budget
When beginning your search for a commercial space, look closely at your budget to determine how much you can afford. Consider your current leasing expenses and how much more you can manage to spend. Take into account your current revenue, but also make forecasts about how the new commercial space might improve your ability to attract more revenue.
2. Consider Additional Costs
Once you have a sense of how much you can afford, you can start looking at commercial spaces. When assessing different spaces, you’ll look at the advertised rent, but it’s also important to talk with the property manager about incidentals. Make sure that you understand what’s included in the lease and which incidentals you need to pay for separately, such as hydro, heat, or gas.
3. Inquire About Rent Increases
Periodic rent increases are a standard feature of most commercial leases. Make sure that you understand how much the rent is likely to increase every year and then budget accordingly. At this point, you should also make projections based on your forecasted future income.
4. Consider Design Expenses
As you look at prospective commercial spaces, think about how much work you’ll need to do to optimize the space for your needs. Then, of course, make sure you budget for those expenses as well. These upfront costs of renovations and decorating can often determine the ideal choice between several different properties.
5. Consider Moving Costs
Finally, when considering renting out a commercial property, it’s important to look at your moving costs. You can get a feel for costs of moving into the space by contacting commercial movers to get quotes on movers and trucks. Then, also consider the indirect costs associated with downtime. Depending on the type of business you have, you may not be able to welcome customers through your doors during the move. If you run an office, your employees may have reduced productivity as they pack and prepare for the move. Alternatively, you may need to pay extra for the movers to handle the move on the weekend or other off hours.
Prepare for Your Commercial Lease with Summit Properties
To talk more about projected costs for a commercial lease or to learn more about commercial leasing in London, contact us at Summit Properties today. We provide in-house design-and-build teams and on-site property managers. We have properties for large enterprises, small businesses, and everything in between.