First and foremost, lets acknowledge the elephant in the room, do you actually NEED a commercial space to start-up?

One of the reasons most of start-up businesses fail is because they go to fast too soon, they pile on lots of expense and risk before even opening the doors... before they know how the market will react to their product or  service, and most often, before people even know that their business exists. So, the first question should always be, can I begin operating on a smaller scale, utilising resources which I already have?

There is absolutely no shame in running a business from home or a shared space, in fact lots of business owners run very successful and profitable businesses from their home or a shared space. In fact chances are that most of the businesses that you want to compete with got started this way, and then moved into commercial space because their business demanded it, not their ego.

Effectively by trialling the business from a low or zero overhead setting you are doing several things; you’re building awareness of your brand, starting to gain a customer base and most importantly starting to generate revenue, significantly reducing the amount of risk you take and  and significantly increasing your businesses chances of long term success.

Most likely You’re not going to be there forever; you are just dipping a toe in the water before you dive in…

OK, so you have decided that you can’t start a business without a commercial premise, here are some tips to help you find the right space for your start-up

Effective business planning – Basic, but often forgotten, its essential that before you commit to a huge and long terms financial outlay like a premises, that you model your business cashflow for the first 12 months:

·      How many products will you sell?

·      What exactly are your profit margins?

·      Detail every single expense that you will have.

Simply put, only by doing the above will you know exactly how much you can afford to spend on rent and after that how much money the business is going to put in your bank account, again this may seem basic, but its fundamental, and its often missed. 

How much space do you need?

Only you will know this, how much space will your business need to effectively operate inline with your forecast in your business cashflow? how much spare room may you need for storage? Do you need extra room for your business to grow into? All of these questions you will need to answer before beginning your search.

Location

Who is your target market? where do they live? how far will people travel for your products and services? Finding the perfect location is key for a  business within its first year, keep in mind that marketing takes time, potential customers won’t come out to find you overnight, so be aware that chances are that in the initial stage of your business location will be one of the primary factors of getting customers through the doors, if you need them to do so.

Don’t rush in and end up with a bad landlord.

Bad landlords, they can make your life miserable. Make sure that you choose a landlord who is professional and plays fair. Talk to other businesses in the building that you are considering renting and judge their reaction. The last thing that you need in the NT is the air-conditioning breaking and a landlord unwilling to repair it straight away.

Negotiate on everything, and make sure you have the option to get out

When signing a commercial lease, almost every aspect can be negotiated on, from rent to terms to how much the business may be willing to contribute to develop the space. Go into negotiations already knowing what terms are acceptable to you, how much you are willing to pay and what you expect from the landlord. If you are unhappy don’t be afraid to walk away, there will be other premises.

And when you are negotiating on terms, I cannot express how important it is for start up businesses to be able to get out of the contract if the worst happens, build this into the terms and potentially look at a rolling contract with a short minimum term.