Different types of leases
Consider the future of your business when choosing your business premises and investigating the lease. Does your business need the flexibility of a month-to-month lease or the stability of a long-term lease?
Short-term renting gives you flexibility - if you expect your business to grow significantly you can rent small premises initially and move into a bigger location as you expand. However, your landlord can ask you to leave at short notice; having to find new premises could slow the momentum of your business as you try to find new premises quickly.
Long-term leasing is ideal if you have found a location that captures your target market. A long-term lease gives you the stability to establish your business over time. If the success of your business depends considerably on its location, begin negotiations to extend or renew your lease long before it expires.
Seek advice from your solicitor or financial adviser before signing a long-term lease because you may face serious financial and legal penalties if your business is not successful and you want to break the lease early.
Leasing in a shopping centre
A retail shopping centre can be defined as 5 or more shops grouped together. The rents are often higher in shopping centres, and there are often more restrictions on leasing terms (e.g. rules for opening hours, products that can and cannot be sold).
Learn more about retail shop leases forms.
Alternatives to leasing
Buying business premises
Buying premises has long-term benefits - the property becomes a business asset, and you may be able to customise the premises. However, it can significantly increase your up-front and maintenance costs. Your financial adviser can help you decide if this option is right for you.
Running a home business
Setting up a home business lowers your overheads and can be ideal if you do not require a shopfront. However, if you need production or warehouse facilities, operating your business from home may not be suitable.
Learn more about starting and running a home business.
Co-working spaces are shared office spaces where sole operators, micro or small businesses can operate from an allocated desk space or small office. Working in these environments can assist in increasing productivity, driving innovation and expanding networks for small businesses.
Learn more about co-working spaces.