Lease Considerations for Home-Based Businesses

Lease Considerations for Home-Based Businesses
  • Opening Intro -

    Your home-based business is booming. You’ve expanded beyond the den and have taken over the garage and the shed out back.

    You never imagined that your business would grow so big, but now it threatens to consume your entire home.


Unfortunately for you, your local zoning laws won’t allow you to expand any further. You’ll either have to sell your home and find multi-use property elsewhere or you’ll stay where you’re at and lease property elsewhere. If you choose the latter, there are some things you should keep in mind when leasing an office.

Your Current and Future Needs

When finding a place to lease you need to consider both your current and future needs. It is easy to find a space that meets your current needs, but your future needs will require much consideration.

You need to project how much space you’ll need in one, three or five years. Most leases run for at least a year and include renewal options. If you don’t size up your space needs correctly, you may find yourself moving in a year or two. Is that something you can handle?

Your Precise Space

How much space do you really need? A good rule of thumb is 200 square feet for every person. That doesn’t mean that’ll have a 20×10 room all to themselves, rather it takes into account common area including hallways, bathrooms and a break room. If you currently have 50 employees, then 10,000 square feet should be sufficient for today.

In anticipation of growth, you may rent 25,000 square feet to accommodate 125 employees. If your landlord allows it, then sublet the unneeded space for the short term and gradually expand as your needs change. You might also find a landlord who would allow you to relinquish your space for larger space as it becomes available.

Your Location Matters

While working at home, your location may not have mattered all that much. It might still be of low importance, especially if you have the equivalent of a back office business. Even so, you need a place that is accessible for your employees. The further it is away from where your home is, the more commuting time will need to be added on for some employees.

If your business now needs public access, then your location requirements should be changed accordingly. That means easy access for you customers, preferably on a well traveled street with road frontage.

Seek Professional Assistance

It can be frustrating and very time consuming to locate the right space. Choose the wrong space and you’ll regret your decision. That is why many people turn to a commercial real estate broker to do much of the legwork for them.

You should know that residential and commercial real estate agents are a different breed. You’ll want to work with someone who is licensed, has very good experience and references to back them up. Ask your business contacts for referrals.

When visiting properties take your time examining each one. You want space that is flexible with ample parking, updated or new bathrooms and ample break room space. You should also find out if it is tech ready, has good sewer and plumbing connections and electric and gas hookups. Choose space that feels like your business “home” because you’ll be spending many hours on site each week.

Lease Considerations

Once you find the place where your business may call its home for the next several years, you’ll want a business attorney to review your lease. Your attorney will scrutinize the lease to determine if you’re getting a fair deal. He may also negotiate better terms for you.

Only sign a lease when your attorney gives you his okay. Solicit advice from your accountant too as she’ll be the one to make the monthly lease payments as well as payments for utilities, ground maintenance and other expenses.

See AlsoAbout Borrowing Money for Your Small Business



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Categories: Business Management

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