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  • Writer's pictureJason Huett

How to Navigate Leasing Commercial Property as a New Entrepreneur: Essential Tips

Updated: Mar 29

Tenant Storefront Madison WI

Are you considering leasing commercial property?

This can be a stressful process where you might not feel you have a lot of leverage. But, you may have more than you think.

Having experienced both sides of the negotiation table over the past two decades, I've learned that the outcome largely depends on how you approach it. While there are benefits for landlords and tenants alike, l'll share some insights from the tenant's perspective.

Here are some tips to help you navigate the negotiation process smoothly:

(1) View multiple properties. It's tempting to fall in love with the first property you see, but try and resist the urge. Be mindful of Recency Bias – the tendency to favor recent experiences over past ones. Take photos to keep each property fresh in your mind and make an informed decision.

(2) Plan for growth. Keeping your expenses lean the first couple years of business is critical, but going too lean can actually be more expensive if you're forced to upgrade or re-locate before you originally planned.

Small business growth Madison WI

Your financial proformas play a critical role - they're not just numbers on a page - they're based on your assumptions for growth which tie back to your Marketing Plan and Expense Schedule. Not enough growth is problematic, but so is too much growth.

(3) Be wary of long-term leases if you're a new entrepreneur. It can be difficult to secure shorter terms (e.g. 3 or 5 years), but it's critical to understand the risk if things head south.

Most landlords require a Personal Guarantee - do your best to take on the minimal amount of risk with an initial term that's shorter, but also offers an Option to Renew if all is well.

(4) Sell yourself and your mission. Remember, when meeting with property owners or managers, you're not just negotiating terms – you're also selling yourself and your business idea. Be prepared to articulate your business purpose, value proposition, and competitive advantages concisely.

People, including landlords, are more inclined to engage with individuals they like, know, and trust. Review your social media content to ensure it presents you in a favorable light – property owners will check.

Best wishes to you in your search for the perfect location!

Jason Huett CMO | Licensed CRE Agent & Business Broker

PS: Are you a new entrepreneur considering leasing commercial space? Get in touch with us if you have questions or need advice when negotiating.


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