Leasing…..get good advice !
Unless you own your premises, you would have a lease with a landlord so the value of your retail business is very much dependant on the quality of your lease.
If you purchased an existing business, it’s likely that you would have assigned (transferred) a lease from the original business owner to yourself. Before deciding on whether or not you should go forward with the purchase of the business, you would have undertaken some Due Diligence to determine if the business was viable and had potential – if you didn’t purchase an existing business, but started a new enterprise, you would have followed a very similar process, however in the absence of any historical data, you would have undertaken a financial viability instead.
Irrespective of whether you purchased an existing retail business or opened a brand new business, you would need to consider a myriad of issues such as;
- Trade Area
- Adjacent Retailers/Competition
- Car Parking
- Location of Premises
- Premises Size/Layout
- Authority Approvals
- Shop Design/Fit-Out
- Projected Turnover
- Projected Profitability
- Gross Annual Rent
- Lease and other Legals
- Human Resources
Of course the above list is only a small sample of the many issues to consider when establishing or purchasing a retail business. Needless to say though, they all require a specialised knowledge, so unless you have a lot of experience in these areas, I highly recommend that you engage with professionals who can help you.
Regardless of whether or not you already own a retail business or are about to open a new business, I recommend that you seek the services of the following professionals as a minimum;
- Lease Negotiator – if you are experienced and feel confident to negotiate a lease yourself, then you won’t need a Lease Negotiator. However if you don’t have the experience, time, inclination or just feel uncomfortable dealing with a landlord, then I recommend you engage a good Lease Negotiator. A negotiator will work with you and all your professional partners (ie. Accountant, Solicitor, Designer/Shopfitter etc…) to achieve optimal commercial lease terms.
- Accountant – a good accountant is worth their weight in gold, so it’s important that you seek sound financial advice in terms setting up and operating your business. I am not just talking about someone who simply puts together your BAS and handles your tax returns, I am talking about partnering with a commercial business person who is able to provide prudent financial advice and help you with all manner of financial matters including dealing with financiers, minimising costs, driving efficiencies, improving profit margins etc…
- Solicitor – after you or your Lease Negotiator have agreed on commercial lease terms, it’s of paramount importance that your solicitor review the lease in detail before you execute it. Likewise if you are buying or selling a retail business, your solicitor should handle the entire purchase process including the lease assignment (or new lease if applicable) together with any other issues such as authority approvals, industrial relations issues etc.
- Designer and Shopfitter – store design is very important, irrespective of whether you are just doing a cosmetic upgrade or brand new fit-out, you need to keep your business looking fresh and vibrant. I thoroughly recommend that you engage a good shop-fitter and designer, however some shop-fitters have designers within their team which makes the process a little easier – they should be able to deliver a fit-out that meets with your landlord’s design requirements and at the same time is functional, robust and stylish. Even after your fit-out is complete, having an ongoing relationship with your shop-fitter is a good idea, as there are often maintenance issues that need attention from time to time.
When it comes to running a retail business, it’s important to surround yourself with professionals who know what they are doing and do it well. You know the old adage “You are only as good as the company you keep”!