This post is written by Bill Reagan, Executive Director of the SBDC and first appeared in the Alexandria Times on September 6, 2018.
Some of the chief disrupters to businesses momentum involve real estate.
First there’s the challenge of finding the ideal location – appealing and convenient for customers and where your business activity is permitted. Too often businesspeople make these decisions emotionally and rush to sign a lease without due diligence. Real estate matters are complex, and it behooves us to get expert guidance.
The first stop should be the Alexandria Economic Development Partnership. Nobody is more conversant with the city’s real estate than the staff of the city’s economic development program. Describe to them your ideal space needs and target market, and they will share their expertise on what types of businesses work best in which neighborhoods and have synergy with other types businesses. They will also discuss how those neighborhoods and businesses – and others you might not have considered – are likely to evolve over time.
The next essential is a well-connected commercial broker, and the economic development staff can make those referrals. Tenant brokers go beyond just being “space finders” but, even in that capacity, they are likely to produce more options for you because they have access to many more properties than you’d find through a Google search. And they cost you nothing – their commission is folded into the transaction costs that the landlord pays.
A knowledgeable broker will do a careful needs assessment, drilling down to the characteristics of the property most essential to your business while considering your budget constraints. They will then begin a targeted search, freeing you to stay focused on your business. Another area where business owners sometimes get tripped up are the actual costs of occupying space. The utilities, insurance, taxes, sewer, and trash, for example, vary from building to building and can be complicated. A qualified broker can break those down so you can compare one property with another.
Property owners usually hold most of the market knowledge, but when it’s time to negotiate, the broker knows market rates and has the expertise to get the best deal for you. They also pay attention to things you might not otherwise consider – the landlord delivering the property in good order; rent concessions if you need to manage construction costs or your occupancy is procedurally delayed; and provisions to better position you for lease renewals or changes to market conditions.
Some of the costliest business heartaches could have been avoided had business owners used a commercial broker in the search and negotiation process, an attorney to review their lease and possibly help them through permitting hurdles, and an architect for planning purposes. Small business owners are typically short of cash, but these expenses are sound investments that save money down the road.
One final suggestion is to consider consulting with the Alexandria Small Business Development Center. We can provide objective feedback; connect you to commercial brokers, attorneys, accountants, insurance agents, city facilitators, and qualified architects and contractors; as well as put together a solid financing plan for your business. And our services are without cost!