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This is going to be a series of articles covering some of my experiences and techniques I have used to successfully negotiate Lease Terms. This article is simply an introduction to negotiating a lease and will serve as an outline to the articles to come.

These articles are not going to cater to those of you who own businesses working from home. However, I believe that the tips shared here could be valuable for you in other aspects of your life that concern negotiations. So, you might want to check it out anyway. For those of you who already lease commercial property or are thinking about leasing commercial property I hope these tips help.

This is one area that I did not do a very good job at when I started my first brick and mortar retail store. I really didn’t know how much I could negotiate and I was not very patient during the process. I was amped up to start my business and wanted to get started as soon as possible so I failed to negotiate my terms very well. However, because of that experience I have since learned to better negotiate lease terms upon obtaining a new lease and when renewing my lease.

Now, keep in mind as you are reading this article that a lot of your negotiating power depends on how hot the rental market is or how high the demand is for a particular location. The more demand for a location the less negotiating power you are going to have.

Location

First, I want to talk about the location of your business. The location of your business is definitely crucial to how successful you can be (Location will be discussed in another article in detail). However, you do not want to lease an amazing location that you are not going to be able to afford. It’s not a good idea to think that just because you are in an amazing location that you will be able to afford that huge $10,000 or whatever a month lease payment. Even if you are in a great location it still takes time to build up your customer base and generate any substantial cash flow.

So, as a starting point for negotiating a lease I suggest, especially if this is your only store to open and you are just getting started, to find a location with the following criteria

• A lease payment that you think you will be able to afford per month based on your projected sales even before negotiations begin.
• A location that is visible and easily accessible
• A location that has an “anchor” store nearby and plenty of complementary businesses

Those are just a few criteria to get you started. As mentioned before location will be discussed in depth in another article. Now, let’s get to actually negotiating your lease.

You can negotiate just about any area of your lease but from my experience I have been most successful and I think most beneficial from negotiating the following areas:

• Length of the Lease
• Rent and Rent Increases
• Common Area Maintenance Fees or CAMS
• Tenant Improvements

When I was doing home parties, I kept my catalogs out of sight until the shopping portion at the end of the evening. It increased my sales and made it easier to hold the attention of my guests during my parties. When I train this concept now, often times I’ll get the protest that guests need the catalogs because they need to be able to see the items that the representative doesn’t have with them as a part of their display. That’s when I counter with this question:

“Have you ever read to a group of 1st graders?”

You know how, after you read the words, you turn the book around and slowly move it from right to left so everyone of their sweet little faces can see the pictures? If so, you know how to use your catalog during your presentation. Not by handing them out and having your guest’s noses in them all night, but by talking about the items on the page and then showing them the pictures and having them write down the page number on their wish list for closer inspection later on when you do give them a catalog.

Why should it matter if they have a catalog during your presentation (besides the aforementioned lack of attention on you)? Well, consider this: if your guests have a catalog in their lap throughout your presentation, they feel confident that they’ll remember what they like when it’s time to order. Chances are, there are dozens of pages and hundreds of items in your catalog, so remembering what they specifically like at the end of your party isn’t as easy as it might seem.

Consider giving your guests a wish list instead of a catalog at the beginning of your parties. This idea might seem strange, but let me explain. A wish list is simply a place for them to write down anything they like. They’re not committed to buy anything they write down, they’re just keeping track. If all they have is a wish list, which is simply a list with spaces to write down the names, catalog page numbers and prices of what they like, they’ll be keeping track, as you go through your party, of the items they like most (because without a catalog, they’re afraid they’ll forget what they like, so they are more likely to write it down).

More importantly, this tool is like having a window into their brains, because as you sit down to support them with placing their order, you can look and see exactly what they liked. Can you see how this might support you in getting not only bigger orders, but bookings as well? (“Wow, Brenda, you have ten items on your wish list. I don’t want you to have to pay for all these items! Let’s do a party so you can earn some of this for free!”)

There’s no way you can have this conversation if all they’re using is a catalog. Get it? So wait until the end of your party (when you know they’re ready to shop) and then hand out the catalogs. And use your catalogs just like a copy of “Green Eggs and Ham” in front of a room of 1st graders.