The thoughts of a small trader.
In my opinion, in the little Retail Bubble which I inhabit, some of the last people to feel the tightening grip of recession are Commercial Landlords. They always seem to get the rent they want because there will always be someone out there with the next big idea. Just don't don't get too carried away when you find the perfect premises.
Do - Ask for the first month rent free.
Do - Try to get it decorated by the landlord for free.
Do - Make sure you have a "break" clause, 12 - 18 months is usual.
Don't sign a lengthy contract, I usually opted for five years.
Don't forget to establish who is responsible for repairs, make sure it is in the contract.
Don't have verbal agreements regarding responsibilities, write it down in the contract.
Don’t get me wrong, more people should consider starting their own business. I love to see small independent shops they make a town interesting and charming. It’s a pleasure to walk around a place with more than just the usual High Street names.
The idea of someone starting their own business rather than working for “The Man” is exactly what I did. Maybe I got lucky but I did a lot of research about what was realistically achievable in my little town.
What about your town?
Is it a dormitory town, do most of its inhabitants sleep there but work and play elsewhere.?
What catchment area surrounds your town, are there many smaller communities who may visit for shopping etc.?
Or my favourite, are you a tourist town, just a nice place to visit with lots to see and do and lots of people visiting?
These are just some of the things to consider before taking your nest-egg or bank loan and, often with little experience but loads of enthusiasm, marching into retail battle with a "Gung-Ho" attitude.
It sometimes seems that with little or no research people plough money, time and effort into their project without looking at footfall or any kind of demographics. There are successes of course, but most seem to disappear within a year which is the normal “break” clause in a commercial contract. Landlords here in the U.K. are not given to reduce rent for a period to help a business get a better foothold they would rather rinse and repeat.
It is the poor little proprietor who has to sink or swim. We have all heard so-called "Business Gurus" trotting out the legend;
"No such thing as failure, it's all experience".
That may be true, but I have experienced losing money in a venture and it felt like a burn to me. Yes you need to pick yourself up and try to learn from it, but I don’t remember nodding sagely and thinking of that 'feel good' motivational blurb!
As I have said, you must do your research and take your time.
It's a shame that in the rush to start a business "Due Diligence" goes out of the window. And another proprietor walks in through the shop door.
