How much space do you presently have and what is your monthly rent? Do you own your business solely or do you have partners? If you have partners, are they aware that you are looking for assistance? If they are not, make them aware.
- Are you in a strip, multi-tenant, or a stand-alone location? What are your neighbors paying in rent? Are they having any problems with ownership? What are the growth trends in the neighborhood? Is the building for sale?
- Do you feel that you are getting your money’s worth? Are you sure that you did not leave any money on the table when you first negotiated your lease? Do you have any regrets about the terms of your current lease? Did you accept responsibility for capital items in the building that rightly should have resided with ownership?
- Do you believe that your rent should go up or down with an upcoming renewal? Depending on the circumstances, increases in your market could be hard to justify. Engage a competent tenant representative to help you determine your local market trends. What is the financial status of your landlord? Is he/she strong or weak?
- If you have more than one location, how did you select them? Did you use any particular method or just guess? There are now sophisticated, web-based, and modestly priced site selection data products that will help you confirm your instincts. They are not foolproof but they will help you better understand your psychographic and demographic target markets. You can delineate these market areas by drive times which are now more significant than distance.
- Does your landlord know that you are thinking of renewing? When does your lease expire? Do you believe that you have any influence over the renewal process and terms? Do you have time to exercise it? Do you have a mailing list of your customers? If you do, relocation is much less painful since you can let your customers know where you are going.
- What are your holdover provisions? What is the relationship that you have with your present landlord and/or his/her agent? Is it reliable? Are they reliable? Accept no assurances unless they are in writing.
- If you are thinking of expanding to a second location, what is your cash position? With adequate cash on hand, you are able to financially and emotionally sustain the planned expansion. If you are light on cash and if your credit is impaired in any way, a second location could kill you. You are in a brutal and fickle business.
- If you are seeking to grow, is a second location your best and lowest risk option? If it is, how? Are you sure? What about building on what you have at the single location?
- Have you considered a percentage rent arrangement as an alternative to a straight rent deal? Sometimes these work if you are running clean books. This will depend on terms and conditions both for renewals and new leases.
