Location, Location, Location

Many businesses are started from the owner’s home. But for some businesses, such as retail businesses, an outside location is a must and one of the most important factors in business success.

How important is location to the success of your business? If it is important

• Are you expecting foot traffic?
• If customers drive, will they have adequate parking?
• Will the other businesses in the area bring in the kind of customers who will buy at your location?
• Can you afford the rent in the area you want?
• Can you adapt the property to fit the needs of the business? Is there enough square footage? What kind of improvements will you have to pay for so that your needs will be met?

Once you have decided on a location, you must also determine whether your type of business activity is allowed in the location you have selected (even if that location is your home). There are four categories of zoning in any area: agricultural, commercial, residential and industrial. Cities have zoning maps, generally in the City Planning office so you can see the zoning restrictions for the property you have in mind. Zoning laws may necessitate restrictions on parking, signs, waste management, and noise.

Be careful before signing a lease for your location. Don’t sign any lease until you’ve had it reviewed by an attorney with experience in commercial leases. And don’t sign a lease until you know that your business can comply with the zoning restrictions in that area.

Almost all commercial leases are subject to negotiation, so read the lease very carefully and know what you can live with and what you can’t. Some clauses to consider:

• Tenant Improvements - what modifications do you need to pay for, and what will the landlord pay for in order to entice you to sign the lease.
• Space being rented - does the space you are paying for include common areas and hallways
• Rent - how are increases determine, does it include insurance, taxes and maintenance costs, when is the rent due
• Length of the lease - when it starts, and are there options for renewing it or taking more space as your business grows.
• Security deposit - under what conditions will it be returned at the end of the lease
• Termination - can the lease be terminated, what kind of notice is required, are there penalties for early termination, or can the lease be assigned or the property sublet to another tenant.
• Restrictions - you may want to restrict the landlord’s ability to lease nearby space to a competitor.
• Maintenance of the premises - what are you required to do
• If you have more than 15 employees, or are a business open to the public, your location must be in compliance with the provisions of the Americans with Disabilities Act (ADA). Make sure and work this out with the Landlord.