For start up small business owners, leasing a commercial space is the major milestone that often turns the whole concept into reality. Once a business has a location, there is a new level of commitment and exposure. This is exciting, but it can also be intimidating. Commercial real estate is nothing like residential real estate, so many business owners quickly find themselves in unfamiliar territory.
The good news is that commercial leasing transactions happen every day in America. Business owners have no shortage of resources available to secure the space that will house their operations.
Retain a Commercial Real Estate Agent to Find Your Perfect Business Location
During the start up phase of a business, owners typically have to contend with the large amount of money going out before establishing consistent income. Hiring a commercial real estate agent may seem like yet another big expense in their growing investment. In most cases, however, commercial agents are paid by the landlord. That means small business owners can receive expert advice while they explore their location options without adding to their expenses.
Jim Wrigley, President of KPG Commercial Management, encourages business owners to take advantage of the advice and guidance offered by firms like his. “There are a lot of nuances in the commercial world, and having an expert to guide you through the process can be invaluable.”
KPG helps business owners evaluate their real estate needs in several ways they may not have considered. They will review the short-term and long-term operations and goals of the business to help owners find the ideal location for successful growth.
What to Consider in Commercial Business Leasing
Every business is unique, but they will all fall into certain categories that determine their commercial space needs. For example, service providers are usually looking for office space, while food and clothing retailers typically want a high visibility and high traffic location. Manufacturers require light industrial property, and some companies need a mixed-use space to cover different aspects of their operations.
Jim at KPG said that reviewing the property criteria and zoning of potential locations is a vital exercise, but zoning codes can be confusing to people who aren’t used to working with those regulations. “We have unfortunately come into the process many times to help a client who committed to a lease that wasn’t zoned for their business operations. Now they have to start over with that disappointment and financial loss hanging over their heads.”
As a commercial brokerage and property management firm, KPG can help clients confirm that potential locations are appropriately zoned in order to avoid potential obstacles.
Speaking of financial losses, it’s important to determine all the costs associated with a leased space before signing on the dotted line. Rent is never the total cost, and the other details of the lease can represent a large percentage of the financial obligation.
Lease structures can vary quite a bit regarding tenant responsibilities. The tenant may have to pay for all the maintenance and repairs in their space, or they might have to pay a general maintenance fee that covers common use areas. How are utilities paid, especially in a building that houses multiple businesses? Do the numbers make sense relative to other properties in the area? If the monthly rent seems very low as compared to similar alternatives, you might be looking at a short-term introductory rate.
Local real estate professionals usually have a very good sense of what is happening in the markets they serve and can help business owners negotiate the best lease agreement. Not every business owner needs to become an expert on commercial leases, but they do need to understand enough to make informed decisions and sign fair contracts. When they rely on commercial agents for their expertise, they can move their business forward with a great professional space.
Commercial Insurance and Property Insurance for Leased Space
Businesses need commercial insurance to protect their assets and finances. Standard policies cover property, people, and business practices. When you decide to lease a commercial space, the contract might require additional insurance policies. These policies protect the property owner from liability for a claim that might be made against your business. It also covers the property itself from any damages that are caused by something related to your business. Essentially, your insurance policy protects your landlord and their property from the risks of hosting your business.
If insurance requirements are spelled out in your lease, make sure your insurance agent reviews them. Your agent will help you obtain a policy that covers the landlord’s expectations along with a cost estimate for your budget, and they will advise you if the expectation is inappropriate. Your agent will also go over your standard commercial policy options to confirm that your whole business is properly insured for operations in your new space.
Congratulations on this exciting move in your small business! Opening your doors to operations, clients, or the public is a huge deal, and we are celebrating with you. If you haven’t yet obtained a commercial policy, contact our office right away. We will go over all of your business information and present policy options that protect your hard work. Smyrl Insurance has been assisting small business owners in Montgomery and Bucks Counties for over 65 years. We have strong relationships with commercial realtors like KPG, and professionals in other industries who come alongside business owners through every phase of growth and development. We educate, nurture, and empower businesses through insurance to help them grow and protect their investment now and for the future. We serve clients for commercial liability, commercial property, and other insurance needs in Hatfield, Lansdale, Souderton, Harleysville, and throughout the region in Montgomery County and Bucks County, Pennsylvania.
