Your Business Plan & Commercial Lease: Ready for Success

Many successful business owners jump into business and intend to 'figure everything out along the way.' However, whenever a business requires a dedicated space, entering into a commercial lease agreement is not something to be "figured out along the way." The consequences of an unfavorable agreement will stick around for years to come. Therefore, whether prepared in excruciating detail, or scribbled into a succession of notebooks, a business plan is a crucial (and underutilized) tool to focus decision-making, spending priorities, and resource allocation for businesses of any size.

When it comes to leasing a commercial space, a business plan be used to clarify key space requirements, demonstrate seriousness as a prospective tenant, and convince a landlord of a business's likelihood of success.

Promote Integrated Thinking
The process of creating a business plan promotes integrated thinking about the business model, objectives and resources (think: measure twice & cut once). That integrated thinking is also instrumental to clarify key business needs that will drive the unique space requirements for a specific business. Space requirements range from square footage, amenities & features, volume of foot traffic, display options, ceiling height, venting, and much much more.

Demonstrate Seriousness as a Prospective Tenant
In the hyper-competitive real estate market in Manhattan, a business plan can also help to demonstrate seriousness as a tenant during lease negotiations. Why is that important? A tenant that demonstrates the discipline to formalize a plan for their business is more likely to take the obligations of a commercial lease agreement seriously as well.

Convince Landlord of Success
Finally, a business plan can help a landlord to determine whether the business owner is prepared to operate a successful business. What insight can a landlord glean from a business plan? Answers to questions like: do you know your fully loaded costs to acquire a customer? Can you generate enough revenue at this location to cover all operating costs? Does your business rely on a specific neighborhood or building feature to drive revenue? How do you plan to generate revenue and pay expenses during initial month of operations? Are you funded and staffed to undertake necessary renovations and improvements? Do you have a strong team in place to guide you through key decisions?

Resources Around the Web
If you are ready to beef up your business plan, and don't know where to start, below are a few great resources on the web - and connections to organizations that exist to support small businesses in New York City.

• New York City Department of Small Business Services: http://www.nyc.gov/html/sbs/html/home/home.shtml
• New York City Department of Small Business Services: http://www.manhattancc.org
• Workshop in Business Opportunities: http://www.wibo.org
• SCORE: http://scoreny.org
• Entrepreneur Magazine: http://www.entrepreneur.com

One lesson learned early and repeated often: while the wrong location can destroy a fledgling business, no location can save a business from itself - or from the lack of a plan. 

Is it time for you to take another look at your plans and requirements for space?