Tuesday, October 27, 2015

Now, About that Deposit for Your Lease ...

Why does it seem that there's always a need for more cash than dollars available to cover business related expenses?

Knowing that, WHY lock-up limited cash reserves in your landlord's bank account for the duration of your lease?

Dale Willerton and Jeff Grandfield

Your business needs to have cash available, not only to cover operating expenses, but to also take advantage of emerging opportunities where they are consistent with your vision. 

When working on your financial forecasts, it's common to use estimates in the absence of actual numbers. The more accurate you can be with these inputs, the greater your confidence in your overall projections, not to mention the confidence of those who will read your plan. It will provide a huge boost to the quality of the proforma statements in your business plan!

To further discuss aspects related to your lease deposits and other leasing considerations, here are our friends at The Lease Coach. 

Negotiating Commercial Leases & Renewals For Dummies Commercial Leasing Tips for Commercial Tenants
By: Jeff Grandfield – The Lease Coach 

For many business-owners, negotiating a good lease or lease renewal against an experienced agent or landlord can be a challenge. While an entrepreneur focuses on marketing and managing, savvy real estate agents and brokers are specialized sales people. Their job is to sell tenants on leasing their location at the highest possible rental rate. 

As explained in our new book, Negotiating Commercial Leases & Renewals For Dummies (co-written with my colleague, Dale Willerton), tenants may go through the leasing process only two or three times in their entire lifetime – yet they have to negotiate against seasoned professionals who negotiate leases every day for a living. Negotiating appropriate leasing terms is vital for an entrepreneur as the amount of rent he pays will directly affect the business’ financial bottom line.

Whether you are leasing a new location for the first time or negotiating a lease renewal for your business, these are some money-saving tips for tenants:

Leasing with no Deposit: Most tenants believe that deposits are mandatory. Not true! Approximately fifty percent of our lease deals we complete for tenants involve either a favourable-modified deposit or no deposit at all. Most lease agreements state that a security deposit is required. Are you a security risk? Maybe so, but if you’re a more seasoned business owner, you may not be a risk at all. Negotiate this condition for all you’re worth.

Renewing with No Deposit: If your lease agreement requires you to make a deposit for the initial lease term it is not acceptable for that deposit to continue indefinitely. Have your rental payments been on time? If so, resist further security deposits and make sure that you state this amendment in the renewal document. Otherwise, your deposit, which was to be applied to the last month’s rent, needs to be replaced for the renewal term.

When Should the Lease End? Most tenants try to start their businesses going into the busy season which makes sense. However, most lease terms should generally expire at the end of a peak season (or just before a company’s slower sales period). It’s usually better to negotiate a shopping centre tenant’s renewal in February rather than October. Therefore, rather than taking a five-year (or 60-month) term, opt for 56 or 64 months instead. Start and end your lease term when it’s best for you – not just the landlord.

For a copy of our free CD, Leasing Do’s & Don’ts for Commercial Tenants, please e-mail your request to DaleWillerton@TheLeaseCoach.com.

Jeff Grandfield and Dale Willerton - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Jeff and Dale are professional speakers and co-authors of Negotiating Commercial Leases & Renewals For Dummies (Wiley, 2013). Got a leasing question? Need help with your new lease or renewal? Call 1-800-738-9202, e-mail DaleWillerton@TheLeaseCoach.com or JeffGrandfield@TheLeaseCoach.com or visit www.TheLeaseCoach.com.

* Have you included your lease and business location costs into your Business PLAN? 
NOTE: This is an area where Pro-Vision Solutions Inc. can assist ... Visit our Website for more details on how we can help. CLICK HERE

What are your comments or additional helpful suggestions for entrepreneurs? 

Let us know your thoughts and thanks for sharing this post with those in your circle of contacts!

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