Your business lease – should you stay or go?
As we get into 2024, it’s a good time to consider whether you want to stay and renew your current lease, or if it’s time to look for a new place to operate. With Your Leasing Co, we weigh up everything you need to consider.
There are a few key elements to think about when you’re deciding whether to keep your current lease, or negotiate a new one in a new location.
1. Assess your current space
Does your current space meet the needs of your salon? Is it fit for any business growth in the near future? Would a new location be better for your clients and your employees?
Working out what’s working for your business and what isn’t will help you to reframe what you want your next space to look like.
2. Landlords expectations
What does your landlord expect in relation to a new lease? Find out whether they have plans for the property and if renewing your lease is part of that plan. If it is, find out the terms of renewal for the lease, what impact would it have on the cash flow of your business?
3. Make good on your responsibilities
What are your responsibilities under the lease if you decide to leave? What do you need to do and how much will it cost to return the premises to the landlord? Your lease will outline the landlord’s expectations so make sure you understand them – and ask for clarification if you need. Once you know the answers, get an estimate to complete the work.
4. What’s on the market?
Find out what else is available that suits the needs of your business now – and in the future. Take a look at what’s available and understand the terms of a new lease. In particular, find out: will the new landlords help pay for a new fit out? What is the rent compared to what you pay now and what the landlord is expecting at renewal? Will they offer free rent while you’re changing over your space?
5. The cost of a fit out
Once you’ve found a new premises you like, consider the cost to get it fitted out. Work with a shopfitter and a designer to understand the level of capital investment needed to fit out a new premises, and get an understanding of possible time frames. What can you bring with you from the old premises? What will need to be changed for you?
6. Drill into the numbers
Once you’ve gathered all this information, you can start to get an idea together of whether it makes more sense to stay where you are or relocate to a new space. Are the capital costs associated with moving worth it? Dig into the details and weigh up the pros and cons.
Once you’ve been through this process you should have an idea of a clear pathway, at least for the time being.
Your Leasing Go’s ‘stay vs go’ analysis gives you the tools you need to help save time and money, and add value to your salon. As a Timely customer, you can get a free lease review consultation (worth $2,500 AUD) with Your Leasing Co, specialists in tenant representation and lease renewals. Simply visit Your Leasing Co to get in touch.