Business Premises Leasing Checklist

Are you about to sign a lease for premises for your new business?

Leases in Australia are watertight documents that you cannot just walk away from if things don't turn out. Of course, you can sell the business and effectively transfer the lease, but you'd rather not contemplate the alternative of declaring bankruptcy.

Leasing costs - or rent - is going to be a major cost in running your business so it pays to do your homework.

Make sure you can pay the rent if your fit out takes longer than expected (which it always does). A budget is critical to ensure you can meet the expected start up costs. Use FineTunebiz Cashbook to set up your budget.

Leasing Checklist

1. Do you really need premises?

2. If passing customers ('foot flow') traffic is important, for example, a coffee shop, is the location the best possible for the rental? Consider aspects such as availability of parking if relevant and the type of customer you wish to attract. A coffee shop in an amusement arcade for teenagers might not be such a good idea!

3. Make sure you understand what you are signing. Only a solicitor can provide you with this information. At the minimum ask: lease term, yearly rent increases, who pays for any additional fees and charges such as council rates, body corporate and insurance.

4. Have you negotiated the best possible square metre rate? Ask neighboring tenants what they pay or check with local real estate agents. If you are paying too much it will be harder for your product or service to be cost competitive.

5. Ask your solicitor to explain any non-standard or unusual clauses. You need to understand what you are signing.

FineTunebiz