Lease agreements require a long-term commitment and must be scrutinized by small business owners, especially amid the current economic downturn.
Here are some words of advice about structuring a lease agreement:
- Push for a short-term lease agreement if you’re not certain on the stability of your business. You can easily find subleases on Web sites like Craigslist.
- For longer lease terms, negotiate hard with the landlord. Try to bargain two to three months of free rentals with little to no rent escalation at the end of the lease, free renovation and not more than two months of rent required upfront in case of early lease termination.
- Check to see if your business is located in a state enterprise zone. Companies within these areas receive state tax breaks on capital investments and job creation. Use our online tax credit locater tool to find out if your business qualifies for tax rebates.
- Take precautions. Always include a sublease clause in the agreement in case your business must vacate earlier than expected.
Work the recession to your advantage and negotiate the best possible lease agreement. Check out our recent blog post for more information on how to keep your small business afloat during the credit crunch.