When to secure Real Estate for your Business?

**vmbanner** · 11-06-2007 01:37 PM

I'm looking for some advice on how to get around a problem I've found. I am starting up a small manufacturing company and intended to lease the building it'll operate in. The facility will need to be permitted so I need to have a location. However, once the location is established it'll be nearly 8 months until the manufacturing equipment is built, delivered, installed and proven. So, does anyone have any advice on how to avoid paying 8 months of rent while not using the building?

**jasaunders** · 11-06-2007 02:27 PM

What most people do is negotiate the terms of the lease with the landlord. Especially if it has been sitting vacant for a while, you will have a lot of leverage. Ask for several months free upfront.

From one of my favorite books, "Losing My Virginity", Richard Branson negotiated with his landlords when starting his first record store, so he wouldn't have to pay rent right away. This is still a common practice. I doubt you could get 8 months free, but probably at least a few months.

**ltressel** · 11-07-2007 11:06 AM

He's right. Most restaurant owners are in the same dilemma. Hence why they are already in the hole way before they open their doors to the public.

Your only way around would be negotiating the lease terms. Don't rush in to signing a lease. Since you will be in a manufacturing business, you're not really location sensitive. Shop around for landlords who might give you this break.

As we are opening a restaurant in the next year-we are considering buying our own property than be at the mercy of a landlord, that could also be an option. Now I only say this because the restaurant will be in Texas. We can buy dirt cheap commercial properties there unlike here in California.

LT

**ltressel** · 11-07-2007 11:10 AM

In addition, make sure that your equipment, floor plans, operational plans, contractors are ready to go before securing the lease. This way you are not fumbling through the process and wasting construction time. Organize that part and you can minimize the gap of being non-operational and the ticking lease.

LT