Options for Flexibility in Your Commercial Lease

BEFORE taking possession of your new office space, here are a few things that you'll want to have negotiated with your landlord. 

In this POST, we'll talk about some of the 'conditions and options' you may be able to build in to your commercial lease.   

With the following Commercial Leasing Tips for Tenants from our friends at The Lease Coach, you'll have some great ideas on options that can put you in a stronger position! This type of flexibility can be most advantageous as it allows you to quickly adjust to changing circumstances around you. We think this is a 'smarter' way to negotiate your lease! And while the business owner always has the final decision on matters related to their business, we've come to appreciate the value of engaging experienced professionals in order to benefit from their many years of experience!

Thank you once again Dale Willerton and Jeff Grandfield for sharing these helpful insights with our "Business Success" audience!  We trust that you'll enjoy these great commercial leasing tips from our friends at The Lease Coach!

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:

Make All Offers Conditional: When negotiating a new lease, make your Offer conditional upon certain things such as financing, partner approval, satisfaction with the formal lease agreement, zoning, construction estimate costs, etc. This will let you legally and ethically rescind your Offer to Lease if outside circumstances hold you back. If you need more time, simply request an extension in writing so you can potentially remove your conditions at a later date.

Month-to-Month Leases: Month-to-month leases have both pros and cons. The pro side is flexibility (as a tenant, you are not obligated to stay longer than you wish) – the con side is lack of security (the landlord could increase your rent or replace you with a more permanent tenant). Frequently, you can lease premises month-to-month on a cheaper basis, especially if the space is already built out to suit you and the property has a few vacancies. I recommend tenants negotiate for a one-year lease term that permits them to terminate with 30 to 60 days notice. This way, the tenant remains in total control.

Negotiate for Free Perks: If your business will require temporary or permanent storage, you can often negotiate to receive it from the landlord for free. Securing extra parking stalls, being allowed more space on the property’s pylon sign, and/or having the caretaker change your lightbulbs or make minor repairs are small perks or privileges that can often be had for the asking. Some property managers will even clean your windows or your carpets for a token charge (or even free …). If you need small favours, ask the caretaker directly and give him a generous gratitude gift when the job gets done.

 
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?  

Feel free to add your comments and thank you in advance 

for sharing this post with those in your circle of contacts!

                                                                                          

QUESTION:  Could you use a COACH and MENTOR?  

IF the ANSWER is YES ...  Take a look at our "NEXT Steps Program!  

If you're looking for flexible and cost-effective Business Coaching & Mentoring, you'll like our “NEXT Steps - Program”. It's been designed with you in mind, and provides 12 months of valuable assistance that designed to fit your busy schedule! 

For more information see:

"Option 3 – “PVS – NEXT Steps - Business Coaching & Mentoring Program” 

It's listed on our Website Registration page: 

CLICK HERE

Building Business Value in Your Organization

Your business may be worth more if you can develop it to the point where you aren't needed there every day!

We've heard it said many times that we should be "Working ON the business, rather than working IN the business!" Building effective systems into your business can help you achieve that objective.

That's one of the key things we try to cultivate as we work with entrepreneurs and business owners. And in this post, our friends from Sunbelt Business Brokers some great insights that we'd encourage our readers to carefully consider.

Building Value In Your Business: Top Organizational Factors

Can a potential buyer of your business see himself in your business or are you blocking the way? When preparing to sell or build value in a business, you need to step back and become dispensable so your business works without you. A good business coach can provide an objective view of your business organization and help you get on track to improve your business’ future value.

Many businesses are dependent on the contribution of the owner for success. If you want to add value, be sure you have systems running the business and a great team running those systems. A business that lacks systems and relies on you has less value.

Working ON the business, not IN the business can be especially hard for those whose business has been their means of self-employment. The greater value comes when the business is making money without the owner’s day-to-day involvement, giving the owner the option of "retiring on the job" with income and flexibility.

Make yourself dispensable

An owner’s role is to focus on the future—expanding operations, improving revenues and profits—while bringing in the money today. If you’re still working IN the business, make yourself unnecessary. Pay for the help you need. Hire someone else for administrative duties. Learn to delegate and empower your employees. Challenge them to improve their skills.

Set goals and expectations then let them follow through. Hold them accountable for their actions and specific jobs. Ensure you have an organizational chart with defined positions, reporting lines and duties and the right people for the right positions (financial, management, sales). Groom a competent management team. If people are in the wrong jobs, move them now—a buyer won’t know your people like you do. Settle them in their new jobs before the buyer takes over. Document duties, responsibilities and expectations.

Ensure you have:

• a current business plan with reasonable future projections
• an honest analysis of your business’s strengths, weaknesses, opportunities and threats (SWOT).

Show prospective buyers the earning capacity of your business. Keep up your business plan as a living guide. Base it on your existing records, market and technology and document the steps that will take you there. Invite staff to contribute and keep it current.

Lack of full disclosure destroys trust. People must trust you to do business with you. Never try to hide deficiencies. Buyers need to understand what they can do with the business. Profits are being generated with weaknesses present; fixing them will increase the profits.

Retain key employees

Buyers count on taking over a business with experienced and knowledgeable staff. Losing key employees can affect the sale and value of your business. Find ways of retaining your key personnel such as an incentive program with bonuses paid after the seller leaves or a special payment giving "consideration" for signing a non-compete agreement that extends two or three years beyond the planned sale. Some businesses are more prone to staff turnover than others. There is always a concern that key employees will leave to set up their own business in direct competition. 

Sellers are advised to secure non-compete agreements well in advance and structure them so that if there is a change in control, the agreement stays in place. How long a term is reasonable? An agreement that specifies five years is unlikely to be supported by the court. The scope of expertise and defined geographic area in question are factors. What it comes down to is you can’t prevent someone from earning a living. Even with an agreement that’s "enforceable", you’ll want to weigh the cost and impact of litigation to keep your position in the marketplace. You may find it better to "give to get". Negotiated solutions can benefit all. The terms and conditions can be anything that is agreeable to both parties.

In our next installment “Building Value In your Business: Top Operational Factors ” we take a step back to address the operational factors that improve the value of a business for owners looking to sell their business.

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.

* Thank you Michael and Dale at Sunbelt for providing us with this helpful article!

Having a business plan can help ensure that you're heading in the right direction with your business, and that you have the necessary resources to get you safely to your intended destination!

In closing, we invite you to consider Pro-Vision Solutions Inc. as a part of your TEAM of business professionals. We're pleased to assist you with your business planning, through start-up, growth and expansion. Let us know if you would like to have a conversation!  

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

Hidden Value in Your Commercial Lease

TODAY we're going to talk about discovering potentially hidden 'CASH, KEYS, and CREDIT' that could be available for your account! 

(Have I got your attention?)

AND, as enticing as it was for me to try spell the word "KEYS" with a "C" in order to have three "Cs" in my opening line, I resisted that temptation. (smile)

It's also very tempting to 'go with the flow' in negotiating your lease, and the result can be that a significant amount of value is either missed or underutilized. The Commercial Leasing Tips for Tenants in this post offer a number of great suggestions that can improve the cash flow and cash position of your business, regardless of whether you're at start-up, in growth mode, or looking at winding down your business operations.

In working with my clients, I've found that the first two tips have been of particular value as they've been setting up their business locations. It always seems that there are more requirements for cash, than cash available, so these suggestions can really be helpful. At the other end of things, the third tip can put more control into your hands at the end of the term of your lease. We think that's a 'smarter' way to negotiate your lease!

NOW, please enjoy these fine commercial leasing tips from our friends at The Lease Coach!

Dale Willerton and 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:

Negotiate for Cash and Loans: Some landlords will actually pay cash incentives to tenants who lease commercial space in their building. Other tenants can often get quasi landlord loans. Note that this money is often blended into the rent so it’s not necessarily free (the landlord expects a certain net effective return) but it can certainly make your business start-up easier. If you wish to receive a cash incentive or loan, demonstrate why you need the money and explain what you will spend it on (e.g. paint, carpet, etc.).

Turnkey Construction Advice: If the landlord does your leasehold improvements, they are supposed to turnkey the space. It’s up to the tenant to create a comprehensive wish list of the necessary improvements required. In the Offer to Lease, stipulate that the landlord does the space design; secures permits; and completes the job on, or before, a certain deadline. Extras or add-ons will be the tenant’s responsibility; make sure that your Offer to Lease is conditional upon your satisfaction with the final budgeted cost.

Apply the Deposit to the Last Month: Before you put down a deposit of any size for the entire term of the lease agreement, read the fine print. You do not want your deposit held for the term of the lease then refunded since sometimes getting your money back is difficult (especially if you are relocating or property ownership has changed). Try to have your deposit applied to a specific month, or the last month of a lease term to avoid potential problems. 

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?  

Feel free to add your comments and thank you in advance 

for sharing this post with those in your circle of contacts!

                                                                                          

QUESTION:  Could you use a COACH and MENTOR?  

IF the ANSWER is YES ...  Take a look at our "NEXT Steps Program!  

If you're looking for flexible and cost-effective Business Coaching & Mentoring, you'll like our “NEXT Steps - Program”. It's been designed with you in mind, and provides 12 months of valuable assistance that designed to fit your busy schedule! 

For more information see: 

"Option 3 – “PVS – NEXT Steps - Business Coaching & Mentoring Program” 

It's listed on our Website Registration page: 

CLICK HERE

Building Value In your Business

One of the signs of a strong and healthy business is one that has controlled growth. 

The owners of the business have a 'solid handle' on where they want the business to go, a plan is in place, and they are using that plan to guide them to that destination!

In this post, our friends from Sunbelt Business Brokers some great tips for business owners to carefully consider. 

Doing so will not only help you increase the potential value of your business in the future, but it can help you better organize and manage your business now!  We trust you'll enjoy this post and benefit from the comments provided below.

Building Value In your Business: Top Financial Factors

Does your accountant dread your visit? Bad record keeping is, in fact, the biggest road-block to selling a business. Buyers want a business with a proven track record of consistent financial performance with solid, growing revenue and earnings. Yet, many businesses are rather flabby when it comes to fiscal fitness. Spending some time with a trainer/coach can boost your strength and health.

Let’s start with some top financial drivers of business value. Focusing on these will make it easier to sell your business and get you more money— then as well as now. Assess your own business, determine which factors affect your business the most and prioritize what you want to work on.

Keeping (in the) Good Books

A correct set of books prepared with proper accounting software is a necessity. Documents need to be current and correct, demonstrating timely remittances and filings.

Compliance is essential: issues with the Canadian Revenue Agency (CRA) or others can freeze your accounts and destroy your business. Continuity is also important. Are you dependent on a single employee who could leave?

Outsourced bookkeeping provides efficiencies that can benefit small businesses as you pay for work that’s being done, not standby hours. Clean and compliant books will contribute to a good relationship with your accountant and save you dollars there, too.

A good bookkeeper will also help you understand your numbers, providing forecasting, financial analysis and identifying cash flow risks.

Keeping good records and communicating any changes is a necessity. Owners often dispose of assets or sign a new lease and forget to advise the person doing their books.

Financial Value Drivers

Clean up the Balance Sheet. A Balance Sheet provides a snapshot of the business’s health. Use it to pinpoint and remove obsolete and slow-moving inventory or excess cash. Resolve potential liabilities and lawsuits, ensure that assets are properly recorded and that expensed R&D investments are noted.

The top reason businesses fail is not poor profit but dry cash flow held hostage in accounts receivable or inventory.

Increase revenues and profits. All else being equal, a better bottom line leads to a higher business valuation: a) sell more to existing customers, b) sell to new customers or c) a combination of the above.

How efficient are you at turning revenue (sales) into profit, i.e. controlling expenses?

Keep in mind that it takes six times as much money to attract new customers to businesses than up-selling, on-selling and generally over-servicing existing customers. You’ll want to keep your customers coming back and bringing their friends with them.

Review and reduce or eliminate discretionary expenses. A $25,000 increase in your bottom line might add $100,000 to your selling price. Phone bills, office supplies and insurance expenditures are areas that should be reviewed by outside agencies annually. Be careful with insurances, though. Your coverage needs to be adequate and the right kind. Having a proper insurance policy with up-to-date coverage assures a purchaser that what they’re buying is protected.

Maintain steady revenue or aim for growth. Steady sustainable revenue beats one that’s erratic.

The greater the market share, the better. Market share can be more important than revenue. A business with a 50% share in a defensible position is attractive to buyers.

Resolve and diversity customer concentration. It’s risky to have any one customer representing any more than 10% of your business. Resolve and diversify supplier concentration. A dependency on any given supplier is also a risk. Line up alternatives.

Prepare reasonable future business projections. Set goals with detailed steps to meet them. Show the earning capacity of your business. Base your plan on existing records, the market and technology; document the steps that will take you there.

Get a business valuation. A valuation tells you where you are now versus where you want to be “X” years from now. A valuation also helps pinpoint changes that can boost the business value.

Research tax implications upon selling the business, including "vendor take back" and earn outs. Who doesn’t want to minimize the tax consequences when selling? Some of the options: share sale, family trusts and deferred payments.

In our next installment, “Building Value In your Business: Top Organizational Factors”, we take a step back to address the operational factors that improve the value of a business for owners looking to sell their business.

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.

* Thank you Michael and Dale at Sunbelt for providing us with this helpful article!

Having a business plan can help ensure that you're heading in the right direction with your business, and that you have the necessary resources to get you safely to your intended destination!

In closing, we invite you to consider Pro-Vision Solutions Inc. as a part of your TEAM of business professionals. We're pleased to assist you with your business planning, through start-up, growth and expansion. Let us know if you would like to have a conversation!  

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

Who's the Customer in a Commercial Lease?

It's funny how we can easily lose sight of the big picture when it comes to such an important consideration as leasing a business location. It really requires us to do a 'role-reversal' as we shift our thinking from 'doing everything to please our customers', to realizing that in this instance, 'we are the customer!'


To help us refocus, here are some valuable tips and suggestions from our friends at The Lease Coach! At a time when business owners in many markets are experiencing significant challenges, as well as new opportunities, it can be very helpful to engage the expertise of experienced professionals in those areas where they can add great value.

Thank you Dale Willerton and Jeff Grandfield for once again offering some very helpful insights for our "Business Success" 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:

You are the Customer: Far too often, tenants act as if they are applying for a lease. If you want to be in the driver’s seat for the lease negotiations, you must remember who is serving whom. The tenant sets the meeting time. The landlord’s agent picks up or drops off documents to you. Shrewd tenants never pick up the restaurant bill if dining over lunch with the landlord or the landlord’s agent. You must always appear to be the buyer … and the customer never pays for lunch. 

Focus on Important Issues: We want to stress that certain issues (such as the rental rate) are deal makers or breakers while other conditions (like providing post-dated cheques) are not. You should never ignore the details but don’t get bogged down over them. Tenants frequently spend inappropriate amounts of time arguing or negotiating where it counts the least. Focus on the most important issues first and foremost and revisit them as the leasing process progresses. 

What’s In a Name? All too often, business owners are tempted to name their company after the building they occupy. While this does create instant location recognition, it also puts them at a disadvantage for initial leases and lease renewals. For example, instead of using the name, Kingsway Mall Jewellers, just call your business Kingsway Jewellers. Try to also avoid street names such as 2nd Avenue Cleaners. Leasing agents often leverage these captive tenants into paying higher rent than necessary because of the likelihood they will not choose or move away from their namesake location.
 

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?  

Feel free to add your comments and thank you in advance 

for sharing this post with those in your circle of contacts!

                                                                                          

* NEW PROGRAM: If you're looking for flexible and cost-effective Business Coaching & Mentoring, you'll like our “NEXT Steps - Program”. It's been designed with you in mind and provides 12 months of assistance that fits into your busy schedule! 

For more details see: 

"Option 3 – “PVS – NEXT Steps - Business Coaching & Mentoring Program” 

It's listed on our Website Registration page: 

CLICK HERE