As you start reading the lease, you will see that the terms of the lease are written with the best interests of your landlord in mind.  However, you can negotiate almost anything that is written on the lease, making the terms of the lease more favorable for you.  The following are three critical issues to keep in mind when you are negotiating your lease.

Lease Terms

First, consider what the length of the lease, also known as the lease term.  Short term leases are almost always better for businesses, giving you more flexibility in case your business needs change.  For example, if you decide that you need a bigger space or want to move to a different location in town, a long lease can keep you tied to your current space and prevent you from expanding.  Also, if the physical location of your business isn’t particularly important, a short term lease can also allow you the ability to move when a less expensive space becomes available or you want to move for any other reason. 

However, there are also reasons that a longer term lease is better in some situations.  For businesses that are already established and who want to stay in the current space, a long term lease prevents you from worrying about moving earlier than you want to.  Additionally, landlords are often willing to negotiate a substantially lower price for tenants who are willing to sign long-term leases.  If your current location is very important to your business, you may want to consider a long term lease to prevent losing the space.  Some examples are great retail locations in busy shopping centers or restaurant spaces that are highly customized to your business. 

The best bet is to find some kind of happy medium.  You may want to start with a short-term lease to determine if the space will work for you, then negotiate for a longer term, lower cost lease later.  However, be prepared for the fact that you landlord may want to charge you extra or raise the lease rate if you stay past the short-term lease period.  If your space turns out to be perfect for your business, the extra cost may well be worth it.

Lease Payment and Increases

The most obvious factor to consider is the monthly fee you will pay for the location, your rent.  You will want to do your homework by finding out how much comparable spaces cost, that way you know whether the rate you are being offered is unreasonably high or a great bargain.  If you absolutely love the space, but the rent seems far too high, begin negotiating with your landlord for a lower rate.  You will also want to find out how long the space has been unoccupied, since a landlord who has gone without rent for a while may be more amenable to reductions in rent.  You may also want to ask about receiving a lower initial rate to compensate for the cost of moving your business, which some landlords will agree to in order to get you into a space.  In most cases, your landlord will want to include a clause that allows them to raise your rent each year.  You may be able to negotiate a removal of this clause, or a “cap” on the amount to prevent your rent from suddenly jumping up.  You will also want to check the lease carefully to find out what is included.  Your lease may or may not include utilities, repairs to the facility, tax payments, and insurance for the building.  If your lease does not include these costs, you may want to try and negotiate for a higher lease price that does include all costs.  This could save you a significant amount over the term of your lease.  You may also want to ask the landlord to include the right to sublease the property- that way, if you decide to move or close your business, you can rent it to someone else without issue.

Improvements

For business owners who will need many improvements to the space, you may want to use your negotiating skills to have your landlord make those improvements for you.  You will also want to ensure that your lease includes the ability to make the improvements you need without a penalty.  Other things to consider are the cost of any required signage- some retail locations require that you purchase a specific type of store front sign.  This can be a significant cost that you may be able to negotiate with your landlord for. 

Leasing the perfect space for your business can be exciting and fun, and by using your negotiation skills, you can find the space you want for a price you can afford.  Remember to read all lease contracts carefully, and know what you are getting into.  Keep this phrase in mind- don’t ask, don’t get.  If you don’t ask your future landlord for reductions or considerations in the lease, you won’t get them.  Don’t be afraid to do what is best for your business!