No matter what level you’re at in your journey of being a business owner, at some point you may want to consider renting a space to operate your business out of.
Whether you’ve started your business yet or not, or if you’re thinking about expanding beyond the current space that you’re in… here are 5 things to consider when you start perusing the interwebs for a commercial lease space.
1). Safety
First and foremost, the majority of your clientele are going to be women. Doesn’t mean we can’t get some men in our businesses-but majority of the clientele that you’re going to have is going to be women. So there are some safety concerns that we want to have top of mind that I find that most people don’t really consider when looking at locations.
You don’t think about it until your client is actually leaving in the evening or you’re locking up at night. It’s nine o’clock at night, and the hallways are really dark-and the parking lot isn’t well lit.
As a woman walking alone at night in a dark area- it can be a bit of a concern. So something to think about is the safety of the area. Are there other businesses there that are going to be open after hours in the evening? How well lit are the hallways and the parking lot? Is there security? Are there cameras, is it a safe neighborhood at night that a woman leaving her treatment can feel safe. Is it a high transient population area?
Would your clientele feel comfortable walking into your space at night or leaving your salon at night? Or would you feel comfortable with you or a team member leaving alone at night?
2). Terms Of The Lease
Now, your standard commercial leases aren’t looking for one year or less leases. Most of them will want 3 to even 5 or 10 year leases. For most of you, that’s a big commitment and I don’t recommend signing up for that lease right off the bat. Work up to that, get proof in your own business that you can be open for a year or two or three years rather than biting off that big chunk.
So looking at the lease terms ideally, when you’re first starting out look for spaces available for month to month, six months or even one year leases. Now, you may be paying more per month because you’re not doing the long term leases-but I want you to organically grow in a way that makes sense. Rather than you bit off so much that you can’t chew it all at once, and you don’t have the clientele to sustain that. So you’re operating at a LOSS from the get go.
You’re going to be learning what you do and do not like about a location in your first time having a commercial lease. So start small, even if that means that you’re room renting, or that you are in a salon suite where you’re renting out the room part time to just get started- that’s much better than you getting locked in a contract. Because what usually ends up happening is you are locked into that contract, and you have no ability to get out of it. Unless you cancel, in which case, it’s a huge amount of money to cancel-either you have to pay out the end of the lease all upfront to cancel it, or there’s a huge penalty for breaking your lease early. It’s also a breach of contract, so there could be lawsuits involved with it.
So just keep in mind, you want to have lower lease terms-especially when you’re starting out. You can commit to a three or five year lease once you’re at the point where you’re expanding, building out a team and you have the data and financials and profitability to look at the numbers to make sure it makes sense.
Bonus tip: The other thing to look at in your lease, is the clause of terminating the lease. What is the process for breaking your lease? So if you get into it, and you find it’s actually an unsafe area, and you can’t grow your business, or you can’t control the AC, or the heat and that’s tanking your retention-so you just can’t build a clientele. What are the consequences of breaking your lease just so that you’re aware of it? It’s not saying that you’re signing up with the intention of breaking the lease, you just need to be aware of the process. Make sure that it’s laid out in the lease, so that you and the landlord and/or the leasing agency are all on the same page.
3). Can You Control The AC and Heat?
The number one thing that I hear is-”oh, I’ll just rent a room in a salon or a bed in the back of a hairstyling salon”…and they have no control over the AC and the heat and it TANKS THEIR RETENTION. Of course you won’t know that until you start taking clients and can’t figure out why the clients’ lashes aren’t lasting.
Also consider that hair salons use blow dryers which heats up the air, so the AC may be blasting in your room because the hair salons temperature has gone up because six stylists are using hair dryers. So while it may be 75 in the salon space, your room is on the same AC system and it’s now 66 in there because the gauge is not in your room, it’s out in the main salon area. So something to consider just to even ask, is there a way to control the temperature?
That way you can have complete and total control over the air conditioning and heat, which is going to get you the most PREDICTABLE results for your clients.
If you are not in control of it, you are not in control of the results that you can get your clients, therefore you’re not in control of the GROWTH of your business.
I would highly, highly, highly recommend not doing anything in a hair salon if you can avoid it. Why? There’s too many variables with hair styling services that really tank your ability to control your adhesive. The ammonia that is used in the hair products and coloring and perming and all that is floating in the air. So if you’re sharing any sort of air or air ducting with a salon, it’s going to impact your glue in some way. It’s a chemical reaction that happens and sometimes it’s completely out of your control if you’re sharing air with ammonia based products. So just be mindful of that if you’re considering a hair salon.
4).Cost Per Square Foot
This is where salon suites actually suck, because they are highly priced per square foot. They offer a lot more amenities, and they are targeted towards the beauty industry service providers, so they tend to jack up the price per square foot. So while you may think that, a $1,200 a month lease is just crazy expensive, you’re gonna want to look at the price per square foot to get an even understanding of what is comparable in the area.
So it’s similar to housing-houses are priced per square foot. Housing costs, right now, per square foot are $100 to a couple $100 per square foot, whereas leasing is usually priced at like $1 and change per square foot. So like $1.25 per square foot, or $2.50 per square foot. You’ll want to go and just do some data research and look at the prices per square foot so that you can know what is reasonable for your area.
Keep in mind that if a retail space is anchored-as what they call it-by a target, or Kroger or some big box store, that is the main draw to that retail space. So all of the other businesses in that area get a lot of walk-by traffic because of the anchor store. So they jack up the prices because the anchor store is drawing a bunch of people in and the other businesses in that center tend to benefit from the walking traffic.
Once you’ve done your research, then you can look at what your budget is. So if you know the average is $2, a square foot and you’re looking at a 200 square foot space, you’re looking at about a budget of $400 a month. Your salon suites are going to be a lot higher, but also look at the amenities that they have-that you get your own space, you get to customize the paint in the area, you have a break room, you have water to your salon suite. So there’s all those other amenities that are built into the lease that you want to consider when it comes to cost per square foot.
5). Proximity To The Freeway And Traffic
The final tip that I want you to consider is proximity to the freeway and traffic. I want you to go to that space that you’re considering during RUSH HOUR and see how long it takes you to get there. Some people sign up for a great location and a great space and then come five o’clock, it takes an extra hour for a client to go another five miles. So that is something to consider of your client experience and also even what hours you are going to be available.
So consider the traffic during certain rush hour times, and also maybe even at lunch hour if there’s a restaurant nearby. Even if it’s just so you can communicate to clients-”hey, during rush hour, it may take you another 30 minutes.” That way you’re not running into clients constantly being stressed out and late due to traffic because of the location you chose.
Now, I actually have a more in depth list of 23 THINGS THAT YOU SHOULD CONSIDER WHEN LOOKING FOR A COMMERCIAL LEASE SPACE that you can go download for FREE. This is the checklist I used when I was on a hunt for my first location!
To download this Free Commercial Lease Checklist Go to www.thelashpreneur.com/leasequestions
Episode Highlights:
Why you should AVOID renting a room in a hair salon at all costs.
What is an “anchor” store and how does it affect the price you pay for a nearby lease.
Bonus Tip: One detail in signing a lease that you do NOT want to MISS!
