Priorities and Penalties that Affect Your Business

One of the quotes I've frequently heard and used when presenting to groups on the topic of Business Planning is:  

"Failing to Plan is Planning to Fail!" 

There's a lot of truth in that little saying. But why is it that we so frequently put our planning off to some undefined time in the future? When you think about what's at stake with the potential launch or expansion of a business ... why wouldn't you take some time, on the front end (as it were) to reduce the potential of things going horribly wrong further down the line? 

Perhaps it's because there are so many things calling for our attention that we fail to give proper attention to the things that really matter - the PRIORITIES. When we miss the important priority items, there is frequently a price to be paid - a PENALTY that's difficult to avoid.

Planning can help, and completing a proper business plan can reduce the chances of missing some of those priority items. And for those looking at signing or renegotiating their Commercial Lease agreement, the following article from our friends, Dale Willerton and Jeff Grandfield with The Lease Coach may also be helpful for your business. Thank you once again Dale and Jeff.

Negotiating Commercial Leases & Renewals FOR DUMMIES

Commercial Leasing Tips for Commercial Tenants

By: Jeff Grandfield and Dale Willerton – 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, 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: 

 Overholding Penalties: Please read this carefully. Most lease agreements contain an Overholding Clause (or a Holding Over Clause). This is the portion of a lease agreement that states the base rental rate and Common Area Maintenance (CAM / Operating Costs) adjustment at the end of the lease term. Should the commercial tenant remain leasing on a month-by-month basis, base rent can increase by 150 – 200%. For new leases, try to negotiate this amount down to 120%.  Be especially aware of this at renewal time to avoid getting penalized. Ask your landlord to waive this increase during protracted renewal negotiations so that you will not be penalized. Check this clause right now!

Focus on Important Issues: We want to stress that certain issues – such as the rental rate – are deal makers or breakers while other conditions are not. We’re not recommending that you ignore the details, but don’t get bogged down with them. Entrepreneurs frequently spend inappropriate amounts of time arguing or negotiating where it counts the least. Focus on the most important issues and revisit them as the leasing process advances.

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

What's been your experience?Feel free to add your comments and we'd very much appreciate if you would share this post with those in your circle of contacts.

 

Could you use some help with your BUSINESS PLAN?

Over the years we’ve found that there is great value for an entrepreneur to put together their own business plan, yet we also recognize that writing one can be a daunting task! Perhaps you’ve experienced some of the challenges faced in writing a business plan. 

We'll work with you and assist in the gathering of information that you'll need to have in your business plan to effectively describe your business opportunity. This service takes a consultative approach to gather information from you and works with you to craft a business plan that's tailored to your needs.

For more information see:Option 4 - “PVS - Business Plan Writing” listed on our Website Registration page: CLICK HERE

 

Differentiating Between Good and Bad Leases

In Business - Sometimes it's really difficult to separate ...'the GOOD' from 'the BAD' ... and the bad, from 'the UGLY'. 

Most of the entrepreneurs we've worked with over the years go into business because they really are good at what they do, and want to now do what they've mastered in a business of their own. 

That makes a lot of sense doesn't it? However, what's frequently overlooked is that just because someone is good or proficient at what they do - doesn't automatically mean they will be successful running a business that does that type of work or provides that type of service. There are many other facets of a business that the former 'employee' turned business owner will now have to appropriately address. There's a long list of functions and responsibilities that need to be considered.

Going through a business planning process as we do with our clients helps entrepreneurs look at the bigger picture, helps to organize the business, and improve your chances of success! Let us know if you'd like to further explore this as you'll see mentioned at the end of this post. 

Now here are some very important considerations with respect to you Commercial Lease agreement. Thanks to our friends, Dale Willerton and Jeff Grandfield with The Lease Coach.  Please enjoy their contribution!

Dale Willerton and Jeff Grandfield

Negotiating Commercial Leases & Renewals FOR DUMMIES

Differentiating Between Good and Bad Leases – For Commercial Tenants

By: Jeff Grandfield and Dale Willerton – The Lease Coach

As we explain in our new book, Negotiating Commercial Leases & Renewals FOR DUMMIES, a bad lease agreement may hold you back from making a good profit or even result in the closure of your business. Great entrepreneurs in poor or mediocre locations will never reach the full potential that a better location may offer. On the other hand, perhaps you’ve picked a great location, but leased too many (or too few) square feet; this can prove to be a problem as well.

Combine a poor location with a high rental rate and you have a recipe for disaster. Your business will never succeed, let alone sell for a profit. Too many business-owners are shopping for cheap space, but for the most part, get what they pay for location-wise. This isn’t to downplay the need for skillful negotiation; you don’t want to pay too much for a good location – it’s all relative. In many of the larger plazas and enclosed malls, the property may be recognized as an excellent location, but getting stuck in a quiet area of the property may make your business less visible than you would like.

Another factor can be a lack of adequate parking for your customers. One tenant The Lease Coach worked with for a midterm rent reduction came to the unfortunate realization that their newest location was parking starved. Just when people wanted to visit, the parking lot was already full of vehicles. Customers parked briefly outside the front door, came in to complain that they couldn’t find a parking space even close by, returned to their cars and drove away.

A good lease agreement will contain primary business terms (rent, size of location, term length, etc.) that are essential to the completed lease deal but will only make up a small portion of the lease. The rest of the lease agreement contains hundreds of secondary or ancillary clauses that may or may not be financial in nature and are, typically, written in the landlord’s favor. It is a common mistake for entrepreneurs to overlook these terms feeling they are simply “standard”. Many of these terms can be adjusted to reduce potential negative impacts to your business or limitation on future rights.

Making a good lease great means removing, deleting, or negotiating restrictive clauses in the lease agreement that will hold your company back. For some commercial tenants, the renewal-option clause can be the difference between whether you get to stay in your location for the long term allowing your business to grow. A demolition clause can force you to move out of your premises if the landlord wants to knock down the building and put up another type of building. A poorly written relocation clause can force you into a costly move. If a business-owner wants to sell their business and assign their lease agreement to the buyer, the lease must have a comprehensive lease agreement clause. However, commercial landlords often include conditions controlling or potentially prohibiting the lease assignment (unless suitable wording is added for the tenant’s protection). An exclusivity clause prevents your direct competitors or neighboring tenants from offering the same services or products. Review the hours and days of operation required in your lease; you may need to negotiate modified days or hours when it’s unprofitable to stay open. These are just a handful of examples of why it is important to read and negotiate all the terms of your lease before signing. 

Brevity in a lease agreement is the enemy of most commercial tenants. A good lease agreement is longer, not shorter. Never just assume that what the lease doesn’t say will play out to your benefit later – it won’t. As the commercial tenant, you want everything that could possibly be an issue addressed in your lease agreement. Remember, it’s often what is missing from a lease agreement that really comes back to haunt the commercial tenant.

If you plan to sell your business, try to think in terms of whether you’d buy this business based on its current lease agreement. As a prospective buyer, what parts of the lease agreement would you not like? Would the rent seem high? What about the Operating Costs (Common Area Maintenance / CAM costs)? Would a shortage of parking or an undesirable neighboring tenant drive away your potential customers and buyers of your business? Are there renewal options valid to a future buyer? Thinking about these issues beforehand can make all the difference in your decision-making process.

All of these are scary scenarios requiring proper guidance from a professional who is working for you, being paid by you, and serving your needs.

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

Dale Willerton and Jeff Grandfield - The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff 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 visit www.TheLeaseCoach.com.

What's been your experience?

Feel free to add your comments and we'd very much appreciate if you would share this post with those in your circle of contacts.





QUESTION: Are you looking at writing your BUSINESS PLAN, but finding that to be a challenge?


Over the years we’ve found that there is great value for an entrepreneur to put together their own business plan, yet we also recognize that writing one can be a daunting task! Perhaps you’ve experienced some of the challenges faced in writing a business plan. We'll work with you and assist in the gathering of information needed to effectively describe your business opportunity. This service takes a consultative approach and works with you to craft a business plan that's tailored to your needs.

For more information see:

Option 4 - “PVS - Business Plan Writing” listed on our Website Registration page:

CLICK HERE

Pieces of the Pie and Your Commercial Lease

In business, it seems that everyone's looking for "a piece of the pie!" 

How much are you giving away? 

What could you still pick up from the table?

Every day you're working hard to make the most of your business, and there wouldn't be much that would be left if you let everyone take advantage of you, right? So it's only natural that you want to keep your input costs and overhead expenses as reasonably low as possible. Yet there's usually a couple of areas that inevitably get overlooked and missed. It's important to look at all aspects of the business in a methodical way in order to minimize the potential for letting valuable resources slip through your fingers. "Don't let that piece of pie get away from you!"

That's another reason why having a "business plan" is so important for your business. And for the same reason, it's why there's value in continuing to review and refresh your "business plan" on a regular basis. When we work with our clients, believe me, there's more to it than simply updating a few "pie charts!"

  


Now for those looking to sign or renegotiate a Commercial Lease agreement, here are a couple of helpful tips and suggestions from our friends, Dale Willerton and Jeff Grandfield with The Lease Coach. Thank you once again Dale and Jeff.

Dale Willerton and Jeff Grandfield

Negotiating Commercial Leases & Renewals FOR DUMMIES

Commercial Leasing Tips for Commercial Tenants

By: Jeff Grandfield and Dale Willerton – 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: 

Merchant & Promo Funds: No matter what landlords and agents tell you, they do negotiate on merchant and promo funds. The key words here are “negotiate on” and not “toss out”. If you don’t want to participate in the property’s promotion fun, justify why, and offer to pay a lesser amount. It is more important to the landlord that everybody pays something – even if it is a lesser amount. Don’t be too soft on this issue. 

Subletting Your Space: Almost every commercial space has potential for subletting. If you must move, close out, or wish to downsize, subletting is a practical solution. Don’t necessarily expect to get 100% of what you are paying for rent but if a subtenant paid 75% of the monthly rent, you may have a deal worth making. Remember, you will need the landlord’s permission to sublet. If the Use for the commercial space changes (e.g. from a family restaurant to a nightclub/bar), you will have to do some negotiating. 

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

What's been your experience?

Feel free to add your comments and we'd very much appreciate if you would share this post with those in your circle of contacts.





QUESTION: 

Are you looking at writing your BUSINESS PLAN 
but finding that to be a challenge?


Over the years we’ve found that there's great value for an entrepreneur to put together their own business plan, yet we also recognize that writing one can be a daunting task! Perhaps you’ve experienced some of the challenges faced in writing a business plan. We'll work with you and assist in the gathering of information that you'll need for your business plan to effectively describe your business opportunity. This service takes a consultative approach and works with you to craft a business plan that's tailored to your needs.

For more information see:

Option 4 - “PVS - Business Plan Writing” listed on our Website Registration page:

CLICK HERE

Plan the Details including Your Commercial Lease

There can be a lot of excitement whenever a business is in the early stages of development, getting ready to launch, or planning to expand their operation into new areas of opportunity. 

Don't let that excitement turn into panic!

It's very easy to get swept up in the flow of things and miss important details. 

That's another compelling reason in favour of going through the steps of developing a business plan. Really, it just makes such good sense. It helps you organize what you want to do, reduces the chances of missing important details, and improves the odds of your achieving those objectives!

Let us know if you'd like to further explore this as you'll see mentioned at the end of this post. And for those looking at signing or renegotiating their Commercial Lease agreement, we're very pleased to provide the following helpful tips and suggestions from our friends, Dale Willerton and Jeff Grandfield with The Lease Coach.  Thank you Dale and Jeff.

Dale Willerton and Jeff Grandfield

Negotiating Commercial Leases & Renewals FOR DUMMIES

Commercial Leasing Tips for Commercial Tenants

By: Jeff Grandfield and Dale Willerton – 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: 

Put Your Meeting in Writing:  Sometimes you will develop an understanding or a handshake agreement with the leasing agent, property manager, and/or landlord. They may be reluctant to put that agreement in writing – so you can. As soon as possible after making the verbal agreement, send a simple e-mail or letter stating Further to our meeting (of such date) it is my understanding that … and list the agreement. Ask for a reply so that you will have something in writing. While this is not legally binding, it shows intent. 

Don’t forget the Parking: When negotiating for parking, first establish the availability and preferred locations. It’s harder to negotiate for parking spots after they have all been taken rather that when there is a surplus of parking. If you can’t get the landlord to come down on the monthly rental rate, at least ask for five or six months of free parking as a lease incentive. Trust us, parking is worth negotiating on – so that you, your staff, and your customers all have a place to park. 

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

What's been your experience?

Feel free to add your comments and we'd very much appreciate

if you would share this post with those in your circle of contacts.





QUESTION:

Are you looking at writing your BUSINESS PLAN, but finding that to be a challenge?


Over the years we’ve found that there is great value for an entrepreneur to put together their own business plan, yet we also recognize that writing one can be a daunting task! Perhaps you’ve experienced some of the challenges faced in writing a business plan. We'll work with you and assist in the gathering of information needed to effectively describe your business opportunity. This service takes a consultative approach and works with you to craft a business plan that's tailored to your needs.

For more information see:

Option 4 - “PVS - Business Plan Writing” listed on our Website Registration page:

CLICK HERE

The Secret to Business Success

I don’t think I’ve ever met a true entrepreneur who anticipated that they were NOT going to be a HUGE success.   

I mean – who goes into a business venture anticipating that they are going to fail?  No one does that!  Yet without attention to good planning and a solid business plan, the chances of failure are significantly increased.  And, in case you hadn’t noticed, the odds are stacked against you right from the start!

A recent online search for “small business success rates in Canada” generated a number of statistics including the following statement: “Business failure statistics show that about 96 percent of small businesses (1–99 employees) that enter the marketplace survive for one full year, 85 percent survive for three years and 70 percent survive for five years (Key Small Business Statistics).“

Knowing this, are there some things you could do to improve your chances of business survival? As we work with our clients, particularly at the start-up or growing stages of their business ventures, we’ve seen where the following “Survival Tips” from The Canada Business Network, can help entrepreneurs avoid some of the pitfalls that lead to business failure. Please give these some consideration, and let us know if you’d like to review how these can be enhanced or applied to your business planning!

• Develop a good marketing and business plan that takes into account customer needs, competition, pricing and promotional strategies.
• Have a good working knowledge of business law or hire a lawyer.
• Understand your business finances, such as cash flow and handling credit.
• Keep a good inventory of your products or services and your existing customers.
• Supervise, train and motivate your employees.
• Make sure you have the experience, expertise and talent to run your business.
• Plan every part of your business from start to finish.
• Know your market and define how much of it you will be able to capture.
• Make sure you are offering a product that is unique and competitive or at a lower cost than that of your competitors.
• Don't under-estimate your expenses and over-estimate your revenue.
• Make sure you have some cash reserves or a line of credit to help you get through slow periods.

Source: https://canadabusiness.ca/starting/before-starting-your-business/is-entrepreneurship-for-you/small-business-survival/

So … what’s the secret to business success?

In two simple words: “Avoid Failure!”

Business Success usually takes a good length of time before it’s achieved. Over night successes are very rare indeed. Some may say that success has more to do with good luck, and there may be some luck that’s been involved along the way. However, I’ve also found that the harder someone works at building their business, the luckier they become! Momentum begins to build and things start falling into place. So keep working at your business! Work hard, and also, work SMART! And when that day comes for your success, by all means, celebrate and enjoy the fruits of your labour! We’d also encourage you to remember those who helped you reach your goals, and find meaningful ways to “give back” to those “good causes” that are important to you and those around you.

                                                

What's been your experience?

Feel free to add your comments and we'd very much appreciate

if you would share this post with those in your circle of contacts.

QUESTION:  

Are you looking at writing your BUSINESS PLAN but finding that to be a challenge?

Over the years we’ve found that there is great value for an entrepreneur to put together their own business plan, yet we also recognize that writing one can be a daunting task! Perhaps you’ve experienced some of the challenges faced in writing a business plan. We'll work with you and assist in the gathering of information that you'll need to have in your business plan to effectively describe your business opportunity. This service takes a consultative approach to gather information from you and works with you to craft a business plan that's tailored to your needs.

For more information see:

Option 4 - “PVS - Business Plan Writing”

It's listed on our Website Registration page:

CLICK HERE