One of the things that you need to consider as a business owner is where you will sell your products or services. There are generally three things that you’re looking for in any space where you want to put your retail displays: visibility, accessibility, and traffic flow. You want to put your display somewhere where there is a lot of foot traffic, where people can see, and is easily accessible should people decide to purchase what you are selling.
Once you have found a potential space, the next question you need to ask yourself is whether you will purchase the space or simply rent it. Here are five tips that you can keep in mind to help you decide whether renting a retail display space is the right move for you.
1. Consider your Budget
When you’re just starting out with your business, you need to find ways to cut down on costs as much as possible. Purchasing retail space outright can be a huge expense, especially if you’re looking to buy space in prime areas with high foot traffic.
Renting space can be a low-cost option, especially if you’re only starting out and building your client base. However, even finding rental space can be difficult, and it’s not uncommon to find unscrupulous shop owners trying to charge you exorbitant amounts to rent a small space in their store. You should have a base idea of how much space you would need to properly display all your products so that you can roughly calculate how much you should pay in terms of rent.
2. Consult a Tenant Broker
If you don’t have any experience when it comes to renting display spaces, you need the help of a tenant broker. A tenant broker will work in a similar way as a traditional broker: they will be there to help you connect with local store owners who have space to rent, work as a facilitator as you and the store owner negotiate, and finally help with all the administrative and legal paperwork that comes with the rental agreement. A tenant broker will also help you look for spaces that fit your budget and business needs.
3. Look for Spaces Slightly Smaller than You Actually Need
There’s a technique in cooking where, if you are unsure with the level of seasoning you need with a particular dish, you underseason the dish. The idea is that you can always add more seasoning as you continue cooking, but it will be very difficult to remove the seasoning if you add too much too early.
This is the same idea that you should use when you are considering a rental space: look for a space that’s slightly smaller than what you think you might need. If your business grows enough over time that you would need more space, you can always renegotiate with the shop owner. However, it’s difficult to keep paying for space that you can’t utilize or afford.
4.Don’t Get Pressured into a Long-term Lease
Shop owners and landlords might try to convince you to sign a multi-year lease, on the premise that you will be saving more money in the long-run if you sign a longer lease. However, signing a long lease will back you into a corner and leave you with limited options when it comes to making business decisions.
Being able to make critical business decisions is essential to your business, whether it succeeds or not. If your business is booming, you can again renegotiate for a bigger space when your lease is up. If the business is not working out well, you will have the option to find another space. Either way, it is important that you have the power to decide.
5. Renting Space Often Means You Also Rent Equipment and Furniture
One of the things that many people overlook when it comes to considering the cost of a retail display space is the cost of the equipment and furniture. When you rent a space, you can negotiate with the landlord so that they will also provide all the equipment and furniture that you might need. While this might increase the rental fees a little, this should be considered a long-term investment, because you won’t get stuck with old or obsolete equipment over time. However, you can also look to include an option to purchase all the rental equipment in your rental agreement, should your business call for it.