Startups, in their incubation period, operate from home, co-work spaces or makeshift spaces. However, the growth spurt in the startup business cannot be overlooked and then there’s additional funding from the investors for expansion. Irrespective of the industry you are functioning in, there will be a need to hire employees and more space to accommodate the expansion. However, is your startup ready for renting a business space yet? If your business is ready for investing in its own space, Forum properties is the ideal for all your commercial needs.
There are a number of considerations like the rent price to revenue ratio. The rental space would mean an added expenditure and you need to figure out whether this will affect your business negatively or positively. For this, consider the cost per square foot, square feet per employee, and also the occupancy cost of each employee. You also need to consider other cost factors like the lease payment amount and other miscellaneous payments.
The rent-to-revenue ratio varies from one industry to another. The lesser the ratio, the better the business is likely to fare. This is to be measured keeping in mind the fluctuations in your business cycle. If the situation is in your favor, then the second step would be to keep the financial documents in place.
A lot of commercial space owners are skeptical about leasing startup businesses and need a lot of financial documents supporting the stability of your startup. Alternatively, they often ask for personal guarantee against the lease. At this stage, make sure that you have the documents ready.
Seeking expert advice is a good idea at this stage. They have intrinsic industry knowledge about the commercial realty industry. These experts or tenant brokers owe loyalty to tenants. It is ideal to hire experts in all fields. For instance, an experienced real estate attorney, who is capable of handling all kinds of financial transactions, can efficiently guide you through the comprehensive procedures of a renting lease.
Make sure you have accounted for the costs of hiring these experts. As an entrepreneur of a startup, you cannot deviate much from conducting regular business. Deviations will only lead to increased costs and potential problems.
A commercial lease is usually for long periods of time as commercial property owners don’t want businesses to move in and out frequently. You need to have a strong financial analysis done to reflect upon the projection of business growth and then go ahead with the rental space.