"Found Money" in Your Lease

When you enter into a lease the usual expectation is that you'll be making a steady stream of payments to your landlord and that it's a one-way street! 

What if you could negotiate some creative ways to channel some cash flow back to you?

Since your lease payment is likely to be one the largest expenditures your business will have, it makes sense to carefully negotiate your lease before entering into that financial commitment.


We also recognize that this is an area where most entrepreneurs have limited experience. Because of that, we've always encouraged our business clients to engage the services of experienced professionals to assist them in those areas where they can add a tremendous amount of value.

In this post, we're pleased to share the following tips and suggestions from our friends at The Lease Coach. Please enjoy the following as Dale Willerton and Jeff Grandfield share their helpful insights with our audience!

Dale Willerton

Jeff Grandfield

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:

Ask for More Than You Want: We remember a tenant coming to us hoping we could negotiate a $500 per month rent reduction for her business. During the ensuing months, we met with the tenant’s landlord and insisted on a $1000 per month reduction. Eventually, our efforts paid off with an $800 per month reduction (or approximately 25% less). Ask for more than what you want or need when negotiating other items as well such as free rent, signage, and leasehold improvement money. The worst the landlord can do is say no!

Need Vacancy Protection? If proper tenant mix and traffic flow is important to you, then you may need vacancy protection. Look around the property and ask – would it adversely affect my business if any one of these tenants moved out of this building, or if the property was 30% (or more) vacant? For retailers, this can be especially important if one of the anchor tenants relocates. Therefore, negotiate in advance for an automatic rent reduction or even the right to terminate your lease should the tenant mix or occupancy rate be compromised to your company’s detriment. This can be especially relevant if a grocery or department store anchor leaves the property.

Tenant Allowance Advice: Receiving a Tenant Allowance will assist you with doing leasehold improvements. Sometimes you can negotiate to receive some of the money up-front so you won’t have to finance 100% of it. Occasionally, a landlord can’t or won’t pay the money they agreed to pay. You can try to include a clause that says if the landlord doesn’t pay the allowance, you will receive 150% of the allowance in free rent. Either way, this provides your landlord with an incentive to pay, or you receive reasonable compensation.

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.

What's been your experience? 

Please add your comments and helpful suggestions for our audience, and share this post with those in your circle of contacts!

* In Closing:  Has your BUSINESS PLAN taken your location and business growth requirements into consideration? 

Pro-Vision Solutions Inc. has a number of helpful ways to add this into your BUSINESS PLAN! 

Simply CLICK HERE for more information and details from our Website!

Keys to Success in Selling or Buying a Business

Little details ... these are frequently the things that get missed as people rush into either starting, purchasing or selling a business.  

The KEY to SUCCESS is found in attending to the details while maintaining your focus on the big picture!  That's why it's so important to have a Business Plan - even a simply business plan, and then building a great team of business professionals to help guide you on your entrepreneurial journey!  


Having a business plan and reviewing it on a regular basis gives you an opportunity to make sure you're heading in the right direction and have access to the necessary resources. 

With so many things 'screaming' for your attention, it can be very easy to overlook important aspects of your planning, simply because something else (something of lesser importance) grabbed your attention. At Pro-Vision Solutions Inc. we work with you and other members of your "team" of professionals to help you build your business and maximize it's potential!

Planning is important regardless of the stage you're at with your business. Planning was important at the start, it's important as you grow, and it's even more important as you plan to exit from the business and move into the next phase of your entrepreneurial career. That may be another business venture, or it could be those long dreamt of retirement plans!

In this post, we've invited our friends from Sunbelt Business Brokers to share a few more of their thoughts and expertise with some helpful tips for those looking at selling, or purchasing a business.

Thank you in advance for your comments and helpful suggestions that you can add for others for those in our circle of contacts. We also appreciate your passing this post on to those you feel could benefit from this information. And now, please enjoy our guest blog post.

20 Ways Business Owners Mess Up

When Selling Their Business

by Dale Alton  
Part 2 of a 3 part series 

Though it may seem daunting at times, there are many things that can stand in the way of the successful sale of your business. Preparation is the key! A Sunbelt Business Broker can assist you in what can often be an unfamiliar process for a business owner.

As with all things, where a generalization is used, there can be exceptions - and number 11 on our list is a good example. As stated in our first installment, a team of professionals (i.e. business broker, accountant, tax lawyer, wealth planner, and a business coach) can help you build a road map for increasing the value of your business, transitioning successfully into the next phase of your life. You will want a good team to take advantage of tax strategies to maximize the proceeds of your business sale.

 

What Not to Do When Selling Your Business 

11. Discount the advice of your business broker, assuming your lawyer or accountant know best
Choose the right professionals— experts who have actual experience in buying and selling businesses and who understand their role in the process can be a great asset. Most lawyers and accountants are not entrepreneurs or business experts. Because their job is to protect your interests against all conceivable risks, the safest recommendation they can make in every situation is to not take a risk. Business brokers are trained to sell businesses! Rely on their expertise to negotiate well, and create win-win terms that work for both parties. 
 
12. Disrespect cultural differences
Emotions can run high during negotiations. Give and take, and the need to listen to, understand and respect the other party’s position, is needed on both sides. Be sensitive to cultural differences—acceptable protocol varies by culture, so the potential for misunderstandings and strained relations increases. Let your broker do the negotiating. He or she understands the cultural differences. And you need to maintain good relations, as you’ll have to work together after the deal is done to provide for smooth training and transition.

13. Battle over trivia
Delays kill deals. Don’t sweat the small stuff and don’t get into a contest of wills, where one side (i.e. you) “wins’ and the other “loses.” If the deal does not work for both sides it will not work at all. Know the deal breakers that must be addressed for the sale to go through. Aim for a win-win conclusion by offsetting each of your necessary demands with a compensating buyer advantage, and by working together to address the issues necessary to meet both of your objectives. Again, rely on the professional expertise of your broker to negotiate well, and create terms that work for both parties. 

14. Balk at seller financing, nervous about risk
Most buyers will need the seller to finance part of the purchase price. Seller financing can add as much as 30% to the price of your business and you get interest on top of that. Sellers can be nervous about the ability of the buyer to run the business successfully. A training program to equip the new owner to operate the business successfully and ensure a smooth transition can make the difference. You are safest lending 50% of the purchase price to the buyer and being in first position on everything, rather than lending 30% and being in second position behind a bank. Other issues affecting the business and loan i.e. illness or death of the buyer can be mitigated with insurance.

15. Leave telling the landlord to the last
Never assume that the landlord will approve the transfer or assignment of a lease to the buyer. Sunbelt Business Brokers will speak to the landlord as early as possible, but only with a signed Non-Disclosure Agreement in hand. Deals can fall apart because of landlords’ refusal or slow processing of lease assignments.

One of the keys here is to try and ensure that there is a provision for a clear method of the assignment of the lease, should you decide or need to sell, when you initially structure your lease contract. 

I believe that a great resource in this area is the “Lease Coach”. They provide a great service and have good success in helping owners understand and negotiate leases prior to making these substantial commitments. 

 

 

Sunbelt Business Brokers Edmonton

Sunbelt’s team of brokers, operating at local and regional levels, have experience selling small to medium sized businesses. 

Michael McCulloch

Dale Alton

Sunbelt is the world’s largest business brokerage firm with approximately 300 licensed offices located throughout the world, and 33 offices across Canada alone. 

More than 1,400 Sunbelt brokers annually coordinate an estimated 4,000 Main Street and Middle Market business transactions.

A variety of strategies are required to sell businesses from different industries, of different sizes, and in different economic climates. Many Sunbelt brokers have specific industry experience and cooperate with their counterparts to identify the buyer and create the right framework for the sale.

Your Local Sunbelt Business brokers sell a diverse mix of main street businesses valued under $3 Million. Mergers and Acquisitions of larger and more complex business transactions of up to $30 Million are managed out of the Ottawa Head Office. We would like to help you plan and look forward to retirement, expansion or an exciting new business opportunity. 

Have you ever thought about selling your Business?

Sunbelt represents clients who may be interested in buying a business like yours. If you are thinking of selling a business now or in the next 3 years, discover what your next steps should be. Feel free to contact our Sunbelt Business Brokers Edmonton office if you have any questions or would like a free confidential consultation. Give me a call. Dale Alton – 780-878-8787

Sunbelt - The Place to Buy or Sell a Business.

* We appreciate this article (and others) from our friends at Sunbelt ... Thank you Michael and Dale!  If you missed the first article in the 3-part series, simply check the index on the right side of this BLOG. We'll be posting part 3 for this series next month.

In closing, we invite you to consider Pro-Vision Solutions Inc. to be a part of your TEAM of business professionals. We'd be pleased to assist you as you work on your business plan, whether that's at the start-up, growth or expansion phase. Please let us know if that's something you may require, and let's have a conversation! 

Together, we can help you Build your Business Dream, starting with your Business PLAN.

NOTE: For more information on the services provided by Pro-Vision Solutions Inc. and how we can assist ... please visit our Website: www.pvs4u.ca

Recommended Books and Resources for Entrepreneurs

Hi Friends and Entrepreneurial Contacts:

… I’m in the process of compiling a list of recommended books and resources for entrepreneurs and could really use your help!

* If you’ve got one (or perhaps a few) that you’d recommend, I’d be pleased to consider including it in the list that will be soon shared. (Title, Author / Website name, URL / etc) 

Also, if you’d care to – it would be great to have a brief comment on what you found particularly helpful from that source.

PLEASE add your information as a comment to this post!

Much thanks 
– Jim Ewing

Pro-Vision Solutions Inc.
Edmonton, Alberta (Canada)
W: www.pvs4u.ca

Business Success BLOG:  http://BusinessSuccessBlog.blogspot.com/
Mentorship BLOG:  http://ProVision-Mentorship.blogspot.com/
YouTube Channel:  http://www.youtube.com/user/ProvisionMentorship
Linkedin Profile: http://www.linkedin.com/in/JimEwingProVision

Facebook:  www.facebook.com/JimEwingPVS
Twitter:  @JimEwing_PVS

To start, and in no particular order, I’ve personally found the following to be helpful:

BOOKS:

Good to Great: Why Some Companies Make the Leap... and Others Don't

by James C. Collins (I found the stories to be inspiring, but also found the insights on how these results were achieved to be very helpful for entrepreneurs.)

The Tipping Point: How Little Things Can Make a Big Difference

by Malcolm Gladwell (Many entrepreneurs are looking for 'the next big thing'. Gladwell helps you look for the signals that can point you in the right direction.)

RESOURCES:

Futurpreneur Canada

http://www.futurpreneur.ca/

(For young entrepreneurs in Canada, this has been one very helpful resources ... Read about the interview I had with Norm Grey regarding their Mentorship Program http://ow.ly/Qm8Q3 )

ATB Financial (in particular, their business resources and templates section)

http://www.atb.com/business/resources/Pages/default.aspx (For those located in Alberta, Canada - I know that ATB Financial has been providing great support for many of the business clients and contacts that I've been working with over the years.)