Great Ideas for your Small Business: Use a Savvy Real Estate Broker
If it’s time to move out of the back bedroom or garage, it means your business is doing well enough to pay rent. But moving into commercial space is a serious financial commitment. In many cases, rent is the second-highest expense after payroll.
It’s also something that takes time and energy away from managing your business. So if you’re feeling cramped now, get going, because depending on the market, a relocation can take six months or more to execute.
If you and a couple of staffers are looking to rent basic office space, you can probably do it on your own. But if you have more than five employees and need more than 1,500 square feet, working with a savvy broker is a good idea. Plus, in many cases, landlords pay the broker’s com- mission.
Leasing space is a complicated business deal, so relying on professional help is smart. “You as a small business owner are not in the real estate market day in and day out,” said Steven Swerdlow, executive vice president at CB Richard Ellis in Manhattan. “It’s very important for you to organize a team that’s expert and that you can trust.”
Swerdlow recommends working with both a broker and a real estate attorney because few business owners are familiar with real estate law or jargon. “A lease is a specialized document,” he said. “There are people who work with leases and know how the game is played.”
Being able to get out of your lease by subletting the space is very important, he said. “Keep your flexibility,” advises Swerdlow. “I can’t tell you how many lease trans- actions we’ve been involved in where we did all kinds of planning for long-term leases and, invariably, the world changes, and you’re either too small or too big for the space.”
Sit down with your employees and decide exactly how much space you need. Brokers say figure on renting about 250 square feet of rentable space per employee as a rule of thumb. Write down what you need in terms of private offices, conference rooms, a reception area, storage space, kitchen, parking, and security.
Be sure to factor in growth. The worst thing is moving in and realizing that you will soon outgrow your new digs. If you end up with an extra office or two, you might consider subleasing to another small business owner. But be sure your lease allows you to sublease.
Feeling good about where you work is essential. It’s well worth your effort to find the right broker to help you locate space and sign a lease that suits your needs.